ADI Consumer Electronics Report 2020

CONSUMER ELECTRONICS
REPORT
Jan 2020
1

© 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential.
US CONSUMER ELECTRONICS REPORT | December 2019
METHODOLOGY
• Adobe Analytics measures 80% of online transactions at the largest 100 U.S. web retailers**
• Report based on aggregate and anonymized consumer data, comprised of over one trillion visits to over 4,500
retailers in the United States.
• Product analysis is based on more than six million orders per day on average during November and December.
• Companion research based on a survey of 1.4k U.S. consumers (18+ yrs.) in Dec 2019
• For comparison purposes, some retail segments have been broken by their primary product lines
**Source: Internet Retailer 2018
2
Adobe Experience
Cloud
Adobe Analytics
Cloud
• Consumer Electronics
• Apparel & Footwear
• Home Furnishings & Décor
• Sports
• Health & Pharmacy
• DIY & Tools
• Jewelry & Cosmetics
• Automotive
• Major Chains
• Gifts

Main takeaways
Consumers consumer electronics buying habits:
• Based on average order value, consumer electronics is by far the most expensive category tracked.
• Because consumer electronics also tend to require research and comparison shopping a vast proportion of
revenue comes from desktops.
• That larger order value dampens both conversion of visits to orders
• Consumers in urban areas spend slightly more on consumer electronics than their population suggests
• Military personnel buy from retailers that help trick out their living on or near bases.
• The evening of Cyber Monday represents the golden hours of shopping for consumer electronics
• Prices for computers and televisions dropped 18% from the October benchmark by the holiday weekend
• Most common size TV over the holiday weekend was the 50” range, at a price less than half of a month’s rent.
3

Consumer Electronics Generate the Largest Online Orders
Consumer Electronic orders are 2.6x larger than the
typical ecommerce transaction ($416 vs. $159)
The second closest category, Home Furnishing & Décor,
is a distant second at a full $100 less per order.
The large Apparel & Footwear category helps bring
down the overall average.
Tech Savvy* consumers prefer to purchase electronics
online (48%), while the Unsavvy prefer to purchase in
store (47%)
4
$77
$122
$124
$140
$163
$168
$226
$268
$268
$312
$412
Gifts
Apparel & Footwear
Sports
Health & Pharmacy
Other
DIY & Tools
Jewelry & Cosmetics
Automotive
Major Chains
Home Furnshing & Décor
Consumer Electronics
Average Order Value
2.6x
$159
Data from Nov 1 to Dec 6, 2019 and companion research.
*Tech Savvy consumers indicated they were interested to strongly interested in tech and electronics
Overall Average

Voice Tech is Growing, While VR is Still yet to Hit its Stride
27% of consumers have purchase a voice
controllable device in that past year, and 27% of
consumers plan to purchase on in the next year
Integration between devices is important, almost
40% of consumers advise that it is very important
to have past and new devices integrate, 51% of tech
savvy consumers advise it is very important vs 25%
non tech savvy
5
3 out of 4 consumers have not tried VR, of those that have
tried 77% are satisfied with their experience

Quality Matters Most When It Comes To Electronics
6
• Quality of a product comes ahead of both Ease of Use
and Price in the consumer’s mind.
• Role of “influencers” (family/friends/sales) regarded as
much less important.
Devices that the Tech Savvy plan to purchase in 2020:
50% - Smartphone
33% - Smart TV
28% - Gaming Console
20% - Laptop
21%
34%
39%
47%
55%
56%
59%
74%
78%
78%
85%
Salesperson Recommendation
Environmental Friendliness
Prev experience of fam/friend/colleague
Brand Name
Product Reviews
Design
Warranty
Product Features
Price
Ease of Use
Quality
How important are the following, when purchasing an electronic device?

Electronics Research Lifecycle Lengthens as Price Increases
7
• As the price of a product increases so does the time a consumer takes to research the product.
Inexpensive products (less than $50) can take a few days whereas more expensive product ($500+)
can take weeks.
• Research for most consumers takes the form of reading online reviews (69%), and comparing
competitive products (61%).
0%
10%
20%
30%
40%
50%
60%
$20 - 50 $51 - 100 $101 - 250 $251 - 500 $500+
When purchasing an electronic device, how much time do you take to research?
< 1 day 2 - 4 days 5 - 10 days 10+ days

1.4%
1.7%
2.2%
2.3%
2.3%
2.9%
3.1%
3.4%
4.2%
4.6%
4.9%
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%
DIY & Tools
Automotive
Home Furnshing & Décor
Major Chains
Jewelry & Cosmetics
Sports
Other
Apparel & Footwear
Health & Pharmacy
Gifts
Conversion (Orders/Visits)
Consumer Electronics has Low Conversion Rate, As Do Other Higher Priced Categories
Consumer Electronic conversion of visits into orders is half
the average (1.4% vs. 3.0%)
Exploration about complex, expensive choices require
multiple visits driving conversion down.
Looking for something with intent, Gifts, Health &
Pharmacy, generates the highest conversion rates.
8
.5x
3.0%
Data from Nov 1 to Dec 6, 2019
Overall Average

Jewelry & CosmeticsApparel & Footwear
Consumer Electronics Home Furnishing & Decor
Smartphone Share of Success Varies By More than 2x Across Categories
9
Desktop still dominates in some categories:
• Consumer Electronics has lowest share of revenue
from smartphones: 18%
Smartphones purchasing rules in more personal
categories:
• Much higher shares in Apparel & Footwear (45%)
and Jewelry & Cosmetics (46%)
We asked consumers what would happen if we took
their phones away for a month: 35% of Millennials
responded (I couldn't live without it), the highest among
all age groups, followed by GenZ (29%) and GenX (28%)
18%
45%
22%
46%
Data from Nov 1 to Dec 6, 2019 – other categories fall in between these examples.
Desktop Smartphone

Large Orders Dampen Smartphone Revenue; Consumer Electronics is Half the
Expected Value
• Consumer Electronics involves research not just hitting “buy now”, as a result little revenue comes from smartphones –
much less than the more impulsive Apparel & Footwear segment
• Consumer Electronics: 18% -- Overall Share is 36% -- Apparel & Footwear is 45%
• For every $100 increase in AOV, the role of smartphones conversion deceases by 15%
10
10%
15%
20%
25%
30%
35%
40%
45%
50%
$- $50 $100 $150 $200 $250 $300 $350 $400 $450
Smartphone Share of Revenue by AOV
Apparel & Footwear
-60%
-40%
-20%
0%
20%
40%
Difference in Smartphone Share of Revenue from
Average
Data from Nov 1 to Dec 6, 2019

Consumers in Urban Areas Tilt Their Spending Toward Vanity, Including Consumer
Electronics
11
Urban Areas (essentially large cities) account for
68% of the population. They
• spend 12% more on Apparel & Footwear than
their population suggests.
• and just a bit more on Consumer Electronics,
Urban Development Index of 107
• spend less on more practical items such as
Automotive and DIY & Tools
1.12
1.07 1.06
1.03 1.02
0.93
0.75
-
0.20
0.40
0.60
0.80
1.00
1.20
Apparel &
Footwear
Consumer
Electronics
Jewelry &
Cosmetics
Home &
Décor
Sports DIY & Tool Automotive
Urban Dev Index
Much less likely in Urban Counties
Data: 9 months ending November 30th
Urban Areas: defined as counties with 0-9% area defined as rural., all other counties grouped together.
Share of Spend in Urban Counties / Share of Population in Urban Counties

Military Base Personnel Focus On Retailers that Make Base Living Better
12
Compared to national averages, military bases
produce a different shopping profile.
• Over half the online revenue (55%) comes
from Major Chains, Consumer Electronics,
Home Furnishings & Décor, and Automotive
• Much less (36% comes from retailers focused
on personal adornment (Apparel & Footwear,
Jewelry & Cosmetics)
Data: November 1 thru December 6th
Major Chains include mass merchandisers, warehouse clubs, department stores.
46%
55%
44%
36%
10%
9%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
All Markets
Military Bases
Holiday Spending from Military Bases
Trick out the base Personal Adornment Other

Consumers Waited Till End of Cyber Monday to Snag Consumer Electronics Deals
13
On Cyber Monday early $3 in $10 (28%) comes
between 8PM and Midnight with 9-10 PM the
most active hour.
For Black Friday the figure is $2 in $10 (19%) since
more shopping occurred in the mid to late
morning, peaking between 10 and 11 AM.
12:00 AM
1:00 AM
2:00 AM
3:00 AM
4:00 AM
5:00 AM
6:00 AM
7:00 AM
8:00 AM
9:00 AM
10:00 AM
11:00 AM
12:00 PM
1:00 PM
2:00 PM
3:00 PM
4:00 PM
5:00 PM
6:00 PM
7:00 PM
8:00 PM
9:00 PM
10:00 PM
11:00 PM
Black Friday
Cyber Monday

Retailers Took Different Approach to Pricing Televisions this Year
14
Last year televisions held their price until
Thanksgiving when the sales started. This year prices
starting falling much earlier.
Prices dropped 18% since October 1st by Black Friday
In contrast, computers take a slow ride down the
pricing curve.
After a slight rise in mid-October, prices leveled off
at the same level (down 18% by Black Friday)
Black Friday
Data: Adobe’s DPI where prices are anchored on October 1st

© 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. 15
50 inch range most common size and
at $415 they’re less than half of US
median rent for 2-bdrm apt ($1,180)
80s
Television Sales Focused on Upgrading Size
30s
40s
50s
60s
70s
47%
$162
$336
$415
$775
$1,186
$2,275
2019 Percent of Unit Sales
1%
15%
26%
9%
2%
Typical price in 2019
Holiday season thru Dec 12th. 30” TVs understated due to minimum price required of $150.
TV features that matter most:
82% - Picture Quality
70% - Screen Size
50% - Audio Quality
Consumers are willing to spend around $854 for their next TV experiences.
But do they have the wall space?

© 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. 16
From Movies to News, Content is Consumed on Smart TV’s
Smart TV - 34%
Smart TV - 42%
Smartphone - 36%
Smart TV - 32%
Smart TV - 34%
What type of screen is used the most to watch..
Movies
TV Shows
Online Videos
(Facebook, YouTube)
News
Live Sports

As TV Prices Go Down, Size Goes Up: 50s No Longer A Big Step Up in Price
17
The price premium to jump from the 40 inch to the
50 inch has fallen from nearly double (83%) in 2017
to a mere 26% in 2019.
The change in price positioning makes the 50 inch
class of TVs clearly the largest share of unit sales
during the holiday season.
• Last year 50s edged 40s: 35% to 30%
Holiday season by year. 30” TVs
understated due to minimum price
required of $150.
2017 2018 2019
40 inch Class $350 $304 $330
50 inch Class $639 $468 $415
Premium 83% 54% 26%
29%
35%
47%
$639
$468
$415
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2017 2018 2019
$-
$100
$200
$300
$400
$500
$600
$700
50in Class TV's Over Time
Share of Units Average Price

ADI Consumer Electronics Report 2020

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ADI Consumer Electronics Report 2020