June 8, 2021
Accelerated by temporary store closures and consumer hesitancy to shop in-store during the pandemic, online U.S. consumer technology hardware revenue share rose to 61% during the 12 months through March — up from 48% in the previous-year period, according to new data from The NPD Group.
The Port Washington, N.Y.-based research company said online revenue grew 62%, up more than $36 billion. Online technology revenue share peaked at 68% in Q2 2020, during the height of lockdowns, and despite declining since then, remained above the long-term trend at 57% in Q1 2021. This was 7% above Q1 2020, and 14% above the pre-pandemic share in Q1 2019.
Notebooks, TVs, tablets and headphones made up 43% of in-store sales, the same as the previous 12 months. Online sales of those categories saw a revenue share increase from 33% to 37%. NPD said online sales of notebooks, tablets, and headphones saw a dramatic shift from in-store, resulting in higher category e-commerce sales than in-store. TVs were the outlier, with the majority of revenue remaining in-store despite lockdowns and growth in online sales.
“While technology hardware sales have moved online at a more rapid pace than other general merchandise categories, the acceleration of this change, and the passing of the 50% milestone as a consequence of the pandemic, represents an important shift,” Stephen Baker, VP and industry advisor for the NPD Group, said in a statement.
The analyst said there remains substantial opportunity for in-store retailing and growth in buy-online-pick-up-in-store activities that need to be fulfilled by retailers at the local level.
“As evidenced by the continued dominance of TV buying in-store, physical presence benefits categories where product features cannot be demonstrated as effectively online,” Baker said in a statement.
While the growth in online sales presents challenges to physical retailers, much of the online revenue increase was actually a result of retailers selling through online channels or using their stores for e-commerce transactions.
In-store pick-ups accounted for 12% of all online consumer tech revenue through March, an increase of two percentage points from the previous period. In fact, NPD reported that when combining in-store pick-up transactions and normal product deliveries, sellers with a retail store presence saw their overall share of online sales increase 10% during the pandemic.