Luxury Portable Consumer Electronics in the US

2020 IMPACT

Growing price-sensitivity negatively impacts sales of luxury portable consumer electronics

Since the outbreak of COVID-19, the response to control the spread was significantly less stringent than other countries. While the peak of the virus was spreading globally, lockdown restrictions were taking place in the US at a local level, and controls were put in place on international travel.

Luxury mobile phones remain negligible as consumers prefer functionality over design

Luxury mobile phones still proved to be negligible in 2020. Only a few brands are available, such as Belperre, made for customised order, and Gresso, which offers both feature phones and smartphones and a portfolio of strong and durable cases, as well as luxury goods.

Despite recording a value decline, sales are favourable for some luxury players

Luxury wearables is expected to record a value decline in 2020, with price-sensitivity and some consumers reluctancy to socialise in public, impacting sales. However, some luxury brands continued to see positive sales, with offerings from those with lower price-points, such as Michael Kors, to higher price points such as Tag Heuer, performing well.

RECOVERY AND OPPORTUNITIES

Stores focus on safety and personalisation to entice consumers through the doors

Due to the outbreak of COVID-19 in the country, in 2020, a greater share of luxury wearable sales will come from domestic consumers, with international consumer expenditure reduced due to travel restrictions. As such, a recovery across the forecast period will be linked to international travellers confidence to visit the US once more, aligned to the successful roll-out of a vaccine.

Players respond to the rise of e-commerce sales by creating appealing online platforms

E-commerce sales in the US are high, with the country leading globally when it comes to sales through the online channel. In 2020, this growth accelerated, with store closures forcing consumers who wanted to purchase luxury portable consumer electronics, to do so online.

Fitness wearables to perform well, while those with a timepiece look, benefit from the return of social gatherings

With the sharp recession forecast for 2020 and less disposable income, it is expected that spending on luxury items will be tightened across the year. With cases of COVID-19 rising in Q4 of 2020, this may continue to be the case across the early forecast period, as some consumers remain wary of unnecessary spending.