Circana: Consumer electronics holiday outlook highlights mixed signals with opportunity

The 2024 holiday shopping season presents a complex landscape for consumer electronics, with overall tech spending intentions reaching a four-year high despite significant demographic variations and economic concerns, according to a blog post by Paul Gagnon, vice president, industry advisor, Consumer Technology, Mobile, at Circana. The shopping season will be more condensed around the core Black Friday to Christmas Eve period than we’ve seen in a while, and consumers will be very sensitive to promotions and pricing. However, the environment offers both opportunities and challenges for retailers and manufacturers as they navigate the season.

Among Gagnon’s projections:

Smartphones continue to dominate holiday tech wish lists, but purchase intent has plateaued despite new AI capabilities. Even as devices become more sophisticated and capable, market saturation, longer replacement cycles, and rising certified pre-owned purchases are a reality. Lack of growth in this traditionally strong category signals a shift in consumer priorities and an opportunity for manufacturers, retailers, and carriers to clearly demonstrate the value and benefits of AI. There are also potential impacts on adjacent categories like accessories, device protection, mobile power, and more.

Digital imaging has shown life in 2024, with growing sales for digital point-and-shoot cameras, mirrorless interchangeable lens cameras, and action cameras that could continue into the holiday season. This growth is linked to the digital creator community that rallies around products designed with them in mind, as well as a bit of retro flair.

Consumers are approaching tech purchases with sophistication. They are doing more thorough research before making purchasing decisions, and social media is playing a greater role than retailers or product reviews. Consumers are placing greater emphasis on practical benefits over novelty features and focusing more on long-term value and device longevity.

Artificial intelligence has emerged as a decisive factor in this year’s tech purchasing decisions, with 38% of consumers citing AI capabilities as influential in their choices. This indicates a rising understanding of AI’s practical benefits among consumers. Their priorities focus on tangible improvements, like improved battery life, speed, and task completion efficiency. Despite interest, a sizeable group of consumers still have concerns about AI, which needs to be recognized and addressed by manufacturers and retailers. Circana is closely monitoring the development of AI trends and attitudes – more to come!