Holiday or Shiny New Smartphone? A Modern Conundrum

CCS Insight has been running its Connected Consumer Radar survey for well over a year, and we’ve harvested a wealth of insights from every wave of research. Here’s a sneak peek at just some of the tactical findings and longer-term trends we’ve picked up in our latest data.

It’s been a very turbulent time. A year ago, we were tired of pandemic restrictions but still worried about the Omicron variant of Covid-19; the war in Ukraine hadn’t started; and inflation was a concern mostly for those involved in macroeconomic analysis and policymakers. Fast-forward to today, and the cost of living and high prices are daily topics in the media, among the rattling of arms in the East of Europe and shooting down of balloons in the US.

People Remain Cautious But the Mood Is Improving

Taking a snapshot of data from advanced markets in the world, it’s encouraging that people’s expectations are improving after the doom and gloom of late 2022. Although pessimism still prevails in the UK and Germany, households in the US, Spain, Australia and Singapore have a more positive outlook about their financial future.

Reflecting this, in January we observed an increase in consumers’ intention to buy smart devices in the coming year, broadly matching levels seen in mid-2022, although still lagging January 2022. This is shown in the chart below.

People are keen to continue renewing their ever-growing collection of connected devices and adding more gadgets to their homes, but the budget they can allocate to them has shrunk, as the following graph illustrates.

Although things are looking up, the data still suggests that device-makers and their channel partners are going to have to weather at least a few more tough months. Some of us will continue to shop as before, often supporting the market for more premium products, but plenty of other people will be trying to keep costs down and looking for a bigger bang for their buck.

And quite like last summer, in 2023 consumer technology products will be competing with holidays for a share of people’s wallet: our data shows people in all surveyed countries have a growing appetite to spend their money on getaways and building memories, above any other non-essentials. After all that’s happened in the world in the past three years, who can blame them?

The Mobile Phone Remains King of the Hill

One of our main goals when we designed the Connected Consumer Radar was to see whether changes to consumer behaviour, triggered abruptly by the pandemic, would be sustained as part of longer-term trends.

The pandemic triggered a frenzy of interest in connected devices and during 2020 and 2021, people bought a lot of extra gadgets to keep themselves or their family members connected for work and education, and for entertainment. Device usage exploded.

In 2022, as movement restrictions were lifted and people felt more comfortable socializing again and spending more time out of their homes, device usage fell slightly across the board. But there was one notable exception: the mobile phone.

Underlining this trend, our Device Value Index reveals a gradual decline in the importance people place on their gadgets in all categories. But once again, the mobile phone comes through unscathed — in fact, not only is it the most highly valued device in the eyes of its owners, but also becoming an even more prized possession.

The decline for other devices is partly because of people’s return to more active lifestyles after the pandemic, but there’s more to this trend. As people’s ownership of connected devices proliferates, they tend to value each of them slightly less, especially when a lot of these products have overlapping functionality and utility.

One thing is clear: holidays might be a high priority for consumer spending this year, but the mobile phone is the king of the hill when it comes to connected devices, and an indispensable product in people’s lives.

I hope you enjoyed this tiny slice of data from our Connected Consumer Radar, an invaluable source for many of our clients. To learn more drop us a line.