One of the keys to surviving in retail is adaptation. The modern version of retail shopping, where people go to stores with pre-set prices, is only about a 150 years old and has changed greatly in that time period. Computers and the internet are some of the most transformative elements in modern retail and it has even left some tech retailers wondering what’s the best way to adapt. As the falls of Circuit City and Radioshack demonstrate, selling technology in the technology age isn’t a guarantee for continued success. The Consumer Electronics Association recently released a report on selling accessories with data that can help tech retailers build more profitable business in the age of technology.
The CEA’s 2nd Annual Accessories at Retail study focused on the growing market for technology accessories. As consumers buy more smartphone, tablets, computers and gaming consoles, there’s a growing market for headsets, microphones, covers and the like. According to the report, revenues for the accessory category (excluding headphones) will reach roughly $9.6 billion in 2015, a 4 percent increase from last year. A key finding from the report is that physical stores are still the main channel consumers use to buy tech accessories. More than 63 percent of tech accessory sales happen on offline channels.
Brick-and-mortar stores have several advantages that make them more appealing to consumers searching for tech products. The main benefit is the ability to get a hands-on trial with the product and to talk to knowledgeable staff about the item. The report found that more than 40 percent of consumers making unplanned tech purchases would use information sources within the store to guide their decision. Specifically, unplanned tech accessory shoppers consumers say store displays (31%), recommendations by friends or family (29%), and a helpful salesperson (10%) are the top drivers for in-store tech accessories purchases.
Consumers have matured a little in their understanding of electronics. Few consumers would buy a product like a tablet or smartphone accessory without doing some research into the quality of their potential purchase. And while many of the purchases happen in-store, a lot of the research happens online. According to the CEA report, about three out of five (62%) U.S. consumers and more than three-quarters of millennials (77%) now go online via computer or mobile device to learn about tech accessories before deciding which product to buy.
“Consumers want to ask questions and get demonstrations during the purchasing process,” said Steve Koenig, senior director of market research at CEA in a press release. “Online and physical retailers, along with manufacturers, need to look for innovative ways to accommodate this dynamic. As more and more consumers use their mobile devices to find and purchase accessories, features like live chats, short video demos or online tutorials can help retailers increase the likelihood of winning the sale.”
Ironically, the report also shows a reverse of the “showrooming” trend that had many brick-and-mortar retailers worried a decade ago. Rather than looking in stores and then shopping online, many consumers are doing research online for items they want to buy in store. The researchers noted that consumers’ top reasons for shopping online are price, convenience and ease of browsing. But only a paltry 7 percent actually buy via mobile device and under a third (30%) use computers.
There is a disconnect between the number of people researching online and the number of people shopping online. Online retailers can work to improve this by removing barriers to online commerce such as creating easier payment methods, improving shipping times, and having more responsive customer service. As consumers grow more comfortable with online and mobile shopping, there will be a significant opportunity for the online retailers who offer a shopping experience that meets the needs of the customer.
For brick-and-mortar retailers, the report offers some hints on how to keep their store relevant even as people turn to internet for information. For example, store displays play a huge role in letting people know what to search for. Consumers see a sign advertising a special on a product and then they go see if that product is good by checking online reviews. Similarly, ensuring that the store’s employees know how to answer common questions about the products helps to deliver an in-store shopping experience that customers will return for. The importance of customer service for driving in-store sales is echoed in a recent report from Mastercard.
The retail market for tech accessories is changing, but by paying attention to the market and making adjustments to their strategy, online and offline business owners can carve out a place for their tech store.
For more news on the retail shopping market, read this article on a projected increase in 2015 holiday sales.