Positive expectations for the 2nd semester
Different product categories are showing strong performance, and technology is expected to play a significant role in sales. “When it comes to tech & durables, 2024 appears to be a year of potential margin recovery for both retail and industry,” says Ricardo Moura, head of market intelligence at NielsenIQ GfK.
por Leda Cavalcanti
Which product categories are expected to stand out this semester?
Ricardo Moura – Besides categories that benefited from the continuous heat waves affecting Brazil since late Q3 2023 (such as air conditioners and fans), refrigerators and washing machines are noteworthy with positive momentum, where inflationary pressures/costs seem to be easing, along with tablets. Televisions continue to perform well (since 2022) in unit sales, and price erosion appears to be overcoming. On the other hand, smartphones are also showing promise in 2024 and could be a good bet for the second semester. Monitors and air fryers continue to advance strongly, but face constant price point pressure, either through product mix or margin erosion, which may hinder healthier development in both categories throughout this year. Speaking broadly of technology, the integration of artificial intelligence in products like smartphones and laptops – even if still in premium devices – is expected to be significant for the medium term, as mid-range devices are likely to adopt this feature.
Will sales in 2024 surpass those recorded in 2023?
RM – In 2023, we saw growth in total unit sales, but with significant efforts in product mix and pricing strategies. This year, we observe a different scenario with growth in total sales volume without the pricing efforts seen last year. Market value is also increasing. When discussing tech & durables, 2024 appears poised for potential margin recovery for both retail and industry sectors.
Are there strategic actions recommended for the industry and retail this semester?
RM – The discussion of price points for the tech & durables category between channels should be closely monitored by both industry and retail. There are still recurring and significant distinctions when comparing the same T&D products, with the same brand and technical specifications, across physical and online channels (1P and 3P). This raises an important point of discussion about the return each channel offers and, in the current perspective of sales balance between online and physical stores, about how far it is healthy to explore or not reduce margins to leverage one channel over the other.
“The in-store experience counts a lot, especially with salespeople who have technical knowledge about the product for consumers who may not be as tech-savvy.”
Will omnichannel strategy become more important?
RM – Considering the tech & durables segment, the Brazilian consumer continues to be a global reference in omnichannel behavior. What we have today is a scenario of balance between sales in physical stores and the online channel, indicating that the number of touchpoints in this shopping journey is indeed complex. However, consumers are quite comfortable exploring all possibilities, which naturally creates a “push” movement in both industry and retail to continue offering a mix of products, promotions, and agility that generate attention and activation of real sales leads, regardless of whether the final sale will be online or in a physical store.
Will marketplaces continue to grow?
RM – The 3P (marketplace) remains the channel with the highest growth expression since last year when it already showed growth of nearly double digits. This year, based on Q1 results, it has shown even greater strength for all major tech & durables categories. This demonstrates an incredible maturity of the market, where the pursuit of sales maximization becomes very fluid, whether in physical stores, direct sales (1P), or through sellers (3P) online.
Will sales be higher in physical or digital channels?
RM – We should no longer think of this separation in such a rigid way. As we know, today’s consumer buying journey is fully integrated and seamless. For them, entering a physical store and accessing the app of that store or another is natural. Therefore, the experience within the store, for example, matters greatly, especially with salespeople who bring technical knowledge about the product to consumers who may not be as tech-savvy. This rule also applies to the online world, but with brands utilizing influencers with technical expertise, for instance, to highlight product functionalities. Regardless of the stimulus of experience and technical knowledge offered by both channels, it is clear that in a longer buying journey, such as that of T& D, the integration of on and off strategies is not just talk. It is indeed a necessary reality for new consumers to enter categories with low household penetration, such as robot vacuum cleaners or single-serve coffee makers. Or for consumers of these categories to fully integrate with the advancement of technology (smart TVs, smartphones, etc.) and thereby feel more secure in investing their money in a new device.
“The integration of artificial intelligence into products like smartphones and laptops – even though still in premium devices – is expected to be important for the market in the medium term.”
Is the consumer more confident or still afraid of incurring debt?
RM – If we focus on the evolution perspective of the T&D market up to this point in the year, it’s clear that we have a consumer who is much more confident than we had in the past, perhaps driven by a slightly more palatable Selic rate. Another important point is the increased control over spending planning by consumers, which aligns with the gradual and steady decline in delinquency rates over the last few months.
Source: Revista Eletrolar News – Edição #161
