For Tech & Durables companies looking to make the most of their innovation investments, it’s essential to look at the current market environment and how it’s influencing consumers’ daily motivations.
Amid mixed economic conditions, Tech & Durables (T&D) companies can expect only a weak consumer pull for many of the latest and most expensive items, except when there are visible and valuable innovations that directly meet consumers’ daily needs.
In the first half of 2024, for example, 35% of TVs sold were older models launched at least two years earlier—an increase of 6 percentage points compared with the first half of 2019.
“Really driving sales often requires dramatic product innovations, such as the leap from CRT to flat-screen TVs, or basic phones to smartphones—and these jumps only happen occasionally. Looking ahead, however, Artificial Intelligence, robotics, and other developments could trigger a wave of change that’s more tangible to consumers.
It’s important that innovation is not only relevant but comprehensible. In the coming year, we expect significant innovation—and, thus, the potential for escalating sales—in products, retail touchpoints, business models, personalized promotions, and the use of Artificial Intelligence. The question we must ask is, ‘What do we need to produce to keep consumers buying?’ We must understand what real innovation means to them.”—Michael McLaughlin, President of International Retail, NIQ
Innovation doesn’t have to reinvent the wheel, but it must improve experience.
Whether it’s through saving time and effort on household chores, tracking health and wellness metrics, providing daily aesthetic pleasure, or helping save energy—and therefore money—for the user, people want new products that continually justify the purchase, every day.
Despite the mixed economic climate, now is the time for T&D companies to kickstart fresh innovation and establish an edge. History shows businesses that invest in innovation during slower periods not only establish a short-term advantage but can drive ahead significantly when economies expand.
Watch our experts answering key questions around innovation today
As T&D manufacturers look to 2025, they should remember the following:
Consumers are moving from cautious to intentional spending, though inflation persists in some markets.
Three in 10 people feel better about their financial position now than a year earlier—the highest proportion since 2022, but 32% feel worse. In H1 2024, this mixed sentiment drove T&D sales volumes up 1%, but revenues slipped 1% as more people bought, but at lower prices.
Innovation must deliver clear value if it is to drive sales.
While affordability remains a top consideration, products and services must also address consumers’ daily needs in convenience, health, performance, user-centricity, and sustainability. These dramatically influence perception of what is worth spending on, and messaging must resonate in these regards.
Success depends upon meeting consumers across relevant channels, understanding their motivations, and successfully communicating highly relevant, daily benefits.
Brands and retailers will need to appear consistently in the channels their consumers use, with the right payment models, personalized offers, and experiences.
Download our full report to examine the developments that T&D manufacturers and retailers can focus on in 2025 to drive volume and value growth.
What’s inside:
- The Tech & Durables market today
- Innovation that increases consumer spending
- Product innovation: Where to focus in 2025
- Touchpoint innovation: Where to focus in 2025
- Building the future: Where manufacturers and retailers should focus
- Key takeaways
