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How to Increase Sales in Electronic Retail Stores?
Millions of people use electronics every day. So how do you stand out as an electronics retailer today? Find out here in this blog!
Electronics and gadgets are widely consumed merchandise. Whether it be for school, for work, or for leisure, people use electronics daily. While this is good news for electronic retail stores, it also means there is more competition and consumer behavior can change so quickly. So now, the question is: How do you stand out as an electronics retail store and drive sales?
What is the consumer demand for electronics?
In 2023, global spending on electronic devices amounted to nearly 700 billion US dollars. While this looks to be a significant amount of total spending, it’s actually a 2.4% decrease from the previous year. This 2024, an increase is expected once more.
Consumer demand for electronics is influenced by various factors. This includes work arrangements, technological advancements, economic conditions, changing lifestyles, and more. Here are some key insights into current consumer demand for electronics:
Smartphones and mobile devices - Smartphones remain one of the most popular electronics. In 2022, smartphone vendors sold around 1.39 billion smartphones worldwide. There will be continuous demand for the latest models featuring advanced cameras, 5G connectivity, and improved battery life. Mobile wearable devices, such as smartwatches and fitness trackers, are also in high demand. This is because consumers have become more health-conscious and interested in monitoring their physical activity.
Home entertainment - Demand for high-definition, 4K, and now 8K televisions continues to grow. In fact, in 2024, the television market worldwide reached a revenue of 97 billion U.S. dollars. This is especially driven by the desire for enhanced viewing experiences and the availability of high-quality streaming content nowadays. Streaming devices are getting popular as well. This includes Roku, Amazon Fire Stick, and Google Chromecast, which are popular with consumers who cut the cord with traditional cable services in favor of streaming.
Computing and work-from-home equipment - The rise of remote work and online education has spurred demand for laptops, desktops, and other electronic peripherals like monitors, keyboards, and mice. Other electronic equipment, such as webcams, headsets, and docking stations, are also seeing increased demand to support remote work and learning setups.
Smart home devices and integration - Voice assistant devices like Amazon Echo and Google Home are popular for their convenience and ability to control other smart home gadgets. According to Statista, consumer spending on smart home devices was valued at 127 billion U.S. dollars in 2022. Home automation products, such as smart thermostats, security cameras, smart lighting, and connected appliances, are also in demand as consumers seek to enhance home security, energy efficiency, and convenience.
Gaming devices equipment - Gaming consoles like the PlayStation, Xbox, and high-performance gaming PCs continue to see strong demand, driven by new game releases and advancements in gaming technology. In 2023, PlayStation was the most-selling current-gen game console, with around 21.8 million units sold worldwide. Other gaming peripherals, such as VR headsets, controllers, gaming chairs, and specialized keyboards and mice, are also popular.
Personal audio devices - There is also a high demand for wireless and noise-canceling headphones and earbuds. This is driven by the increase in mobile device usage and the need for high-quality audio experiences. Portable Bluetooth speakers and smart speakers are also in demand for personal and home entertainment.
Health and fitness tech - Fitness tracking devices that monitor physical activity, sleep patterns, and other health metrics are popular today as consumers focus more on health and wellness. Statista reports that there were around 65 million fitness tracker users in the United States alone in 2023. Health monitoring gadgets that track vital signs, like blood pressure monitors and glucose meters, are also increasingly being integrated with smartphones and smartwatches.
Photography and videography equipment - High-quality cameras and drones are sought after by both professionals and hobbyists. The need for social media content creation and the desire for high-resolution imagery fuel the demand for these retail electronics.
Sustainable and energy-efficient electronics - There is also a growing demand for electronics that are energy-efficient, made from sustainable materials, and have minimal environmental impact. In fact, 35% of consumers check the sustainability of personal electronics before they make the decision to buy them. Solar-powered chargers and other renewable energy-powered devices are becoming more popular among eco-conscious consumers.
Automotive electronics - Advanced in-car entertainment and navigation systems are in demand as consumers look for better driving experiences. And with the shift towards greener transportation, there is increasing interest in EVs (electric vehicles) and their associated technologies, such as charging stations and battery management systems.
Overall, the demand for electronics is shaped by the need for connectivity, convenience, entertainment, and even health. Electronics retail stores must stay attuned to these insights and face key challenges in the business to meet consumer expectations and capture market share.
What are the challenges of electronic retail stores nowadays?
Electronic retail stores face a variety of challenges in today's market. As electronics and gadgets become more diverse, and consumers adapt to modernization, retailers will need to overcome conflicts and know how to adjust accordingly.
Take a look at some of the primary challenges facing electronic retailers:
Intense competition - Huge online retailers like Amazon, Alibaba, and eBay offer a vast array of products, competitive pricing, and convenient delivery options. Other electronic retailers should also be considered. Competing against such giants and other stores requires smaller retailers to find unique selling points and niches. Of course, the constant drive to offer the lowest prices can also lead to reduced profit margins. Retailers must balance competitive pricing with maintaining profitability.
Technological advancements - Technology evolves rapidly, and retailers must continually update their product offerings to include the latest gadgets and devices. This involves investment in new stock, staff training, and sometimes even store layout adjustments. Digital transformation is also becoming a necessity for a lot of businesses. Implementing integrated e-commerce or webstore platforms, mobile apps, and in-store technology like self-checkout systems and interactive displays can be complex and costly for retailers. Ensuring these systems work seamlessly together is also crucial.
Customer expectations - Having an omnichannel experience is also a big expectation among customers. Customers expect a unified shopping experience whether they are shopping online, on mobile, or in-store, which is what omnichannel retailing is about. This requires significant investment in IT infrastructure, or digital solutions, and logistics to ensure inventory accuracy, synchronized promotions, and seamless returns processes. Consumers also increasingly expect personalized recommendations and marketing. This requires sophisticated data analytics to understand customer behavior and preferences and tailor the shopping experience accordingly.
Supply chain and inventory management - Efficient logistics are essential for timely delivery, which is a key customer expectation. Retailers must manage their supply chains meticulously to ensure inventory is always available without overstocking. This ties up capital and storage space of the electronic retail stores. Operating globally will also pose a big challenge. Political tensions, natural disasters, and pandemics can disrupt supply chains. Retailers would need contingency plans and diversified sourcing strategies to mitigate these risks.
Customer retention - Running electronic retail stores involves a lot of face-to-face interaction and services with customers. This makes customer retention a challenging stage for a lot of electronic retailers. For example, developing effective loyalty programs can be demanding yet effective. These programs need to provide real value to customers to keep them engaged and loyal, often requiring significant investment in rewards and technology to track and manage points. High-quality customer service is also critical to retaining customers. This involves training staff, resolving issues promptly, and sometimes handling customer complaints across multiple channels (in-store, online, social media).
Economic factors - Economic downturns or periods of inflation affect consumer spending power, especially when it comes to something as pricey as electronics. Retailers need to adapt quickly, offering value propositions that appeal to cost-conscious shoppers. Cost management will also be a challenge for electronic retailers. Balancing operational costs such as rent, salaries, and technology investments while maintaining competitive pricing will be a necessity.
Growing sustainability and ethical practices - With the consumer’s growing need for sustainability and ethics from businesses, electronic retail stores will also have to adjust. Addressing electronic waste and promoting sustainable practices is becoming more important to consumers. Retailers may need to invest in recycling programs, eco-friendly packaging, sustainable digital solutions, and sustainable supply chains. Consumers also increasingly prefer brands that demonstrate ethical practices nowadays. This includes fair labor conditions and social responsibility initiatives. Retailers need to communicate their efforts effectively and ensure transparency.
Cybersecurity threats - With the increase in the preference for online transactions, retailers must protect against cyberattacks when it comes to their online web stores. This involves securing customer data, transaction information, and protecting the overall integrity of their IT systems. Of course, compliance with regulations such as GDPR in Europe or CCPA in California requires robust data protection measures and policies, which adds to the operational complexities.
Marketing and brand differentiation - Standing out in a crowded market requires innovative marketing strategies, consistent branding, and a clear value proposition. This often involves significant investment in digital marketing, influencer partnerships, and unique in-store experiences. Changing consumer behavior, of course, will always cause conflict for businesses of any kind. For electronic retail stores, adapting to how consumers discover and purchase products, especially with the rise of social media and influencers, requires agility and constant market research.
Physical store relevance - With more consumers shopping online, physical stores see reduced foot traffic. Retailers need to create compelling reasons for customers to visit their branch. This might include strategies such as exclusive in-store promotions, events, or experiences. Electronics retailers that enhance the in-store experience can involve interactive displays, knowledgeable staff, and creating a welcoming environment. This investment in store design and customer service can differentiate a retailer from online-only competitors.
How to increase sales in retail electronics?
It’s clear that while electronic retail stores are lucrative and are never running out of consumers, certain challenges still develop that might hinder profitability. Fortunately, increasing sales in retail electronics can be achieved through a combination of strategic initiatives. Focus on enhancing the customer experience, leveraging technology, and building better relationships.
Here are some key strategies:
Enhanced customer experience
Use customer data to provide personalized recommendations and tailored marketing campaigns. Implement AI, machine learning tools, and other analytical tools to analyze shopping behavior and preferences.
Ensure a seamless shopping experience across online and offline channels. Integrate inventory management to provide real-time stock availability, which will enable customers to buy online and pick up in-store.
Train staff to provide knowledgeable and helpful customer service. Setting up a dedicated customer support center is also recommended for a more streamlined customer service for consumers. Offer easy return policies and robust after-sales support to build trust and loyalty.
Leveraging technology such as electronic shelf labels
Invest in a user-friendly and responsive e-commerce platform or shopping website. Ensure the website is optimized for mobile devices and provides a smooth, secure checkout process.
Utilize data analytics to track sales trends, customer preferences, and inventory levels. Use these insights to make informed decisions about stock inventory, promotions, and marketing strategies.
Using in-store technology is also highly recommended. This includes interactive displays, augmented reality (AR) for product visualization, and self-checkout kiosks to enhance the shopping experience. This also includes electronic shelf label solutions that will enhance not only the product pricing and labeling, but also the entire retail process. A good example would be Newton ESL which is equipped with robust features such as a 7-page information capacity, 7-color LED indicator, programmable buttons, near-field communication (NFC) capabilities for self-checkout kiosks, as well as a label management system that can be integrated with inventory. Electronic shelf labels like this will also help facilitate omnichannel retailing, ensuring that the transaction process is streamlined for every consumer, no matter the channel.
Improve product assortment and availability
As an electronics retail store, make sure to offer a wide range of products to cater to different customer needs and preferences with their gadgets. Keep up with the latest technology trends and stock new releases promptly to attract gadget enthusiasts and other customers.
Using an inventory management system to ensure popular items are always in stock is also recommended. Avoid overstocking slow-moving items to reduce the holding costs of the store.
Build strong supplier relationships
Develop strong relationships with suppliers to negotiate better pricing, access to exclusive products, and priority stock during high-demand periods. A good supplier relationship will help electronics retail stores always cater to customers and their demands.
Offer exclusive products or limited editions that are not available through other retailers to create a unique selling point. This will also help stores stand out from other retailers and huge e-commerce platforms.
Optimize physical store layout
It’s also best to design the store layout to encourage exploration and impulse purchases. Use eye-catching displays and signage to highlight new and popular products. Setting up demo stations is also beneficial. This is where customers can try out products before buying. This is particularly effective for high-ticket items like smartphones, laptops, and gaming consoles.
Improve after-sales service
Offer warranty services and easy access to repairs and technical support. Providing peace of mind can encourage customers to make high-value purchases at a particular electronics store.
Make sure to actively seek and act on customer feedback to improve products and services. Satisfied customers are more likely to become repeat buyers and loyal fans who will recommend your store to others.
Enhance community engagement
Engaging with the community is also a surefire way to increase the sales of electronic retail stores. Host workshops, tech talks, and product launch events to engage with the community and showcase your expertise.
It’s also best if you can engage in CSR (corporate social responsibility) activities and promote sustainability practices. This can enhance your brand image and attract socially conscious consumers.
Electronic retail stores will always have tough competition and tricky challenges. However, the best solutions will help them grow profits and earn trust. Keep these strategies in mind to increase sales, improve customer satisfaction, and build a loyal customer base.
Do you think your electronics retail store is ready for an electronic shelf label solution? Talk to SOLUM experts now and find out how Newton can help you promote product offerings and optimize your store operations.