NPD: Tech Demand ‘Infinite,’ Rising 20% Monthly Since Pandemic Began, E-Commerce Staying Up
NPD forecasts Q4 consumer tech sales will rise 18% from the 2019 quarter, about twice the level of increase of NPD predictions made at the beginning of the COVID-19 pandemic, Stephen Baker, vice president-technology, told an NPD webinar Wednesday. NPD…
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projects tech sales in first-half 2021 will increase 10% over the comparable 2019, disavowing 2020 as a comparative “baseline” due to the year’s volatility, he said. “While we don’t expect lines of people waiting on Black Friday,” it’s reasonable to expect “lines of cars,” said Baker. About 36% of online sales in Q2 were buy online, pick up in store (BOPIS) transactions, he said. Baker expects “incremental growth” in BOPIS over Thanksgiving weekend, he said. Baker isn't worried that the extraordinary volume of tech sales occurring during the pandemic is “pull-in” demand that will diminish holiday spending later in the year, he said. “In an environment where demand is infinite, pull-in doesn’t really make any difference,” he said. “We keep worrying about this, but the demand remains there. We’re seeing 20% revenue growth every single month for the last five months. Even if that demand is being pulled in, there’s demand behind it.” That’s one of the reasons “we are increasingly bullish” about the holiday outlook, said Baker. “Anybody who knows me knows I was pretty bearish in the early part of this. Our thought process has evolved over time.” The 18% increase NPD expects for Q4 tech revenue growth is an “historic-type number,” he said. “There remains a huge amount of unmet demand that obviates the challenges around pull-in and gives an enormous base to work against.” E-commerce was 70% of consumer tech revenue at the end of Q2, said Baker. That’s about 20 percentage points higher than it was at the beginning of 2020, he said. “Certainly we’re not going to stay there,” but it’s likely that online as a percentage of tech sales will “permanently” stay above 60%, he said.