How Consumer Technology and Durable Leadership Can Win in a Volatile World

GfK is a Business Reporter client.

The pandemic’s severity may have receded for now in some parts of the world, but business leaders in consumer technology and durables still face a rocky road ahead. But it’s not all doom and gloom. Brands and retail teams that arm themselves with timely, data-informed intelligence and cultivate the ability to evolve can still achieve sustainable growth and cater to changing consumer needs. GfK, a business intelligence provider for the global consumer products industry, unpacks the macro trends and challenges of 2022 and shows business leaders what they can do to optimize their offerings.

Macro trends for 2022

Since seeing significant growth in 2021 following the emergence of new living, working and consuming trends on the back of the Covid-19 pandemic, the consumer technology and durables industry faces hurdles in 2022 and beyond. A confluence of challenges, including inflationary pressures, supply chain disruptions, declining consumer confidence, environmental concerns and, of course, Russia’s war on Ukraine, will continue to put business leaders through their paces this year, and beyond.

Deceleration: Against a backdrop of restricted travel, remote working and social distancing, the value of the consumer technology and durables market grew by a record high of 12.2% in 2021. Home coffee machines, juicers, tablets and wearable technology—previously seen as luxuries—suddenly became more essential. While the market looks set to continue its upward trajectory this year, there will be an inevitable slowdown, with a forecast value growth rate of just 2%, representing a drop of approximately $110 billion.

Inflation: Although the global economic recovery has so far been fairly stable, GfK predicts that the rebound will lose momentum as a result of inflationary pressure that’s pushing up costs for both brands and consumers.

Inflation is being driven by:

• Ongoing disruptions in energy, food and commodity markets
• High fuel prices pushing up manufacturing costs
• Supply chain disruptions causing bottlenecks and shortages of goods

Declining consumer confidence: The picture of global consumer confidence remains fragmented and unpredictable. While an easing of the most acute pandemic restrictions in most regions has appeared to temporarily alleviate some consumer uncertainties, inflation, rises in food and energy prices, new Covid variants and Russia’s invasion of Ukraine have dented confidence once again. According to GfK, only 34% of consumers believe their economic situation will improve 12 months from now, compared with 41% in 2019.

Solutions and strategies

However, all is not lost. During its Decode the Future virtual event in May, GfK offered strategies to help brands and retailers weather the storm. Whether revamping lines to include premium and sustainable products or using data to guide direction, leaders who listen and respond to the market can still win big.

Premiumization: Despite lukewarm consumer sentiment, GfK notes that consumers are willing to pay more for products with perceived quality or added value. Premium lines and stronger, bolder brand identities that connect emotionally with consumers could help businesses elevate price points and alleviate the decline in demand.

Invest in the new normal: A new hybrid work culture has emerged since the start of the pandemic. While many consumers satisfied their need for personal electronics and home appliances in 2020, smart brands should create products that tap into today’s more connected consumers. Appliances with multiple functions and electronics that provide convenience via the Internet of Things will stand out from the crowd.

Seamless omnichannel: Covid-19 has accelerated consumer migration online, along with demand for brands and retailers to provide offerings across multiple channels. GfK advises using AI-powered data, industry expertise and cross-functional collaboration to guide a holistic omnichannel approach for a seamless user experience.

Go early on ethical: Opportunities abound in social and environmental sustainability for consumer technology and durables. Business leaders can put themselves in a leading position by acting first on sustainability, demonstrating added value for consumers and avoiding the potential risks of not acting quickly enough.

Be data-driven and agile: With the war in Ukraine and the pandemic just two of several unpredictable global factors, C-suites should try to anticipate pressures on the cost of goods, supply chains and consumer finances. Use data and analytics to closely monitor consumer sentiment and priorities, and be ready to switch strategy when the market demands it.

For more insights on 2022 trends, opportunities and recommendations, download our latest State of Consumer Technology & Durables report and explore regional breakdowns and practical strategies to help you navigate the uncertainty and stay ahead of the market.

This article originally appeared in Business Reporter. Image: Courtesy of GfK