NPD: 71% of TVs Purchased Through April Were Sold at a Discount

Higher inventories, coupled with growing price sensitivity as a result of weakening consumer confidence, have given rise to a surge of TVs being sold on promotion.

From January through April 2022, 71% of TVs purchased in the U.S. were sold on promotion, according to new data from The NPD Group. This far exceeds the 18% of units sold on promotion for the same time period last year, as well as pre-pandemic levels, 59% of units in 2019. In fact, the share of TVs being sold on promotion during this timeframe is above holiday (Q4) 2021, 2020, and 2019 levels, based on a recent NPD Price and Discount analysis.

“After facing unexpected inventory challenges and high consumer demand, retailers are now finding themselves with an inventory surplus and are discounting TVs as well as products in other categories to move inventory out the door,” Paul Gagnon, VP, industry advisor for NPD, said in a statement.

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This sharp uptick in TVs being sold on promotion is not necessarily reflective of what is being seen in the consumer technology industry at large. While consumer tech promotional activity has begun to rebound from the lows seen in 2021, it remains below pre-pandemic levels reported in 2019. Through April 2022, 24% of total CE units sold were on promotion. This is up two-points from the same time period in 2021, but three-points lower than reported in 2019.

“Over the last two years consumers shifted their CE spend as they bought products when they needed them, whether it was ahead of typical upgrade cycles or at a higher price outside of promotional periods, as they had technology needs that had to be met due to pandemic lifestyle changes,” Gagnon said. “However, with a return to experiences and building inflation, a shift has begun back toward frugality. As a result, we expect the 2022 holiday season to look a lot more like pre-pandemic times, with higher rates of promotion to entice consumer spending in TVs and beyond.”

NPD: Pandemic Purchases of Televisions Cooling

As a result of the pandemic, U.S. television sales jumped in 2020, but as the crisis subsided sales growth slowed in the first quarter of 2021, according to the NPD Group’s Retail Tracking Service.

Unit sales across all models were up 20% in 2020 compared with 2019, according to the NPD.

Sales of TVs were still up in the first quarter (ended March 31), but increased at a slower pace than in 2020. U.S. TV unit sales grew in the mid-teens. Sales will see tougher comps in Q2 (ending June 30) compared with 2020 when pandemic buying took hold, according to NPD.

Fueled by stimulus checks and improving economic outlook, NPD said the mix TV models and cost increases overall saw average selling prices at record high levels.

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Stephen Baker, technology industry advisor at NPD, said long-term demand for TVs likely improved as a result of the pandemic, with a much higher consumer value on larger screens, streaming quality, and the availability of familiar and consistent interfaces.

“Expect pricing to become a hurdle,” Baker wrote in a note. “While consumers expect better big screen TVs, the era of high-volume sales above $1,000 has passed.”

Baker said model mix remains key. Brands and retailers need a robust sales mix to capture a fair share of premium TV sales, while maintaining volumes necessary to create operating and cost leverage.

NPD: Domestic TV Installed Base Getting Bigger, Newer

Few things can drive television purchases and screen size upgrades more than a pandemic. That trend emerges in new data from The NPD Group that found in the last several years American TV screens have been getting bigger. Among installed TVs, 15% are 60 inches or larger, up from 11% a year ago — and newer — the average unit age is 4.9 years old, down from 5.4 years in 2019.

According to NPD’s TV Ownership Trends Report, the average size of a replacement TV jumped to 51 inches from 49 inches in November 2019, and up from 47 inches in November 2018.

“This year home entertainment became even more crucial as consumers spent more time at home due to the COVID-19 pandemic,” analyst John Buffone said in a statement. “TV sales, among other tech items, saw strong interest and as a result we saw notable shifts in the installed base.”

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Buffone attributed the surge in TV purchases to consumers housebound without the ability to go to the movies or live entertainment, including sports.

“Americans shifted spending to technology that offered at-home opportunities to consume content,” said.

In 2020 year to date, TV sales are up 19% compared with the same period in 2019. Through Cyber Monday week, 65-inch TV sales increased 27% versus 2019, while 70-inch and above TVs increased by 82%. In total, 65-inch and above TVs made up 21% of sales, increasing from 18% in 2019 and 13% in 2018. NPD projects that by 2022, 65-inch and above TVs will be 27% of sales.

While screen size is a key motivator, features such as high-dynamic-range imaging (HDR) and apps are continuing to matter more as consumers consider replacement purchases. In fact, HDR now impacts 13% of replacement TV sales and the availability of apps reportedly impact 31% of replacement TV sales, up from 23% a year ago.

“This year consumers saw the value in bigger screens and newer, more modern technology to support their entertainment needs,” said Stephen Baker, VP and industry advisor for The NPD Group. “This commitment to new technology and the value it can provide to the consumer will be key for the continued growth in larger-screen TVs in 2021 and beyond.”