The consumer electronics and appliances industry has held up remarkably well amid the economic uncertainty of the COVID-19 pandemic. That said, we believe direct-to-consumer (D2C) models would strengthen more brands’ positions as customers seek safe purchasing options and demand for devices such as laptops, tablets, headphones and smart speakers has risen as people continue to work from home and look to technology for productivity and entertainment.
For the moment, large retailers are the single greatest winners of the work-from-home and broader consumer shifts driven by the pandemic. And even with health concerns, stores may still be relevant as many consumers will always want to try out new devices or get in-person customer service support, and traditional sales channels enable more convenience and store locations nearer to customers.
Yet significant value and opportunities exist in brands building out a D2C experience. For example, consumer electronics brands can have more control over the end-to-end customer lifecycle – from the first point of research through to a repeat purchase -- allowing the brand to own the order fulfillment and logistics experience and expand loyalty through learning more about customers. When big box retailers like Best Buy decided to temporarily close stores and shift to curbside pickup this year, some consumer electronics brands already had robust online ordering capabilities while most were still highly reliant on third-party retailers for distribution.