Household equipment: French consumers spent 29 billion euros

The Home Furnishings sector has posted a positive balance sheet for 2020, beating the forecasts for the first half of 2020. The weight of online sales logically increased by 6 points, exceeding 30% of the revenue generated.

With regard to the 2020 performance of the non-food markets audited by GfK Market Intelligence, which grew by 5% in terms of revenues, the Home Equipment (EQM) universe also had a great year, with nearly €29 billion generated, up 4% compared with 2020. The sector was largely driven by sales of Computer-Office Equipment (+18% in revenues), Small Household Appliances (+11%) and Consumer Electronics (+6%). These 3 universes benefited from the “at home” trends, initiated by the first containment.

By way of comparison, France is in the same positive market trend as Italy or Spain, but below the performance recorded in the German (+9%) or British (+15%) markets. Interestingly, sales of branded products showed better momentum than private labels, despite the occasional stock shortages encountered in the first half of the year. Thus, in 2020, 16% of EQM revenue was generated by private labels, down 1 point.

Online: on the rise but without revolution

Given the three-month closure of physical outlets for Home Furnishings in 2020, the weight of Internet sales has logically increased by 6 points, exceeding 30% of the revenue generated. The already online oriented markets (Photo, IT, Telecom) have experienced an even stronger acceleration when the progression is below the average for the GEM and Consumer Electronics universe.

French consumers have made greater use of e-commerce: their online spending has increased by 34% in 2020 to reach nearly 7 billion euros, with a stronger dynamic on click and mortar sites (growth of more than 50% in turnover) than pure players (an increase of more than 10%),” explains Christophe Loyer, head of Retail expertise at GfK Market Intelligence. However, the practice remains moderate compared to our European neighbors, particularly Germany and the United Kingdom. Thus, Italy has a relatively low weighting of the online channel at 22% in 2020 (+7pts compared to 2019) and Spain 33% (+11pts) when e-commerce in Germany accounted for 42% of the annual turnover of Home Furnishings (+10pts) and the United Kingdom reached an all-time high at 68% (+25pts).

More French consumers converted to buying online

“In 2021, 33% of French people said they consider e-commerce as the main channel for their purchases of household equipment, up +4pts compared to the period before the first confinement, but down compared to the behavior at the end of the year when the proportion rose to 39%,” analyses Nathalie Bollé, Director of Consumer Intelligence GfK. The rise of online in 2021 is driven by direct delivery and click & collect, regardless of the age of the shoppers.” In the assessment of the strengths and weaknesses of the Internet channel carried out within the framework of the GfK Consumer Pulse Covid-19 study (Jan.2021), the channel is associated with few drawbacks… or even none for more than 1/3 of online shoppers.

However, the Web option remains behind the GSS (specialized superstores), preferred by 39% of the French, and the physical channel continues to account for 2/3 of the turnover of the Home Equipment sector in 2020. Consumers remain attached to the store, with 58% of them intending to visit it as part of their pre-purchase itinerary in 2021.

As for future practices, some digital purchasing methods still need to convince. Social shopping, for example, was used by only 17% of the French, all types of purchases combined, compared to 40% worldwide according to the GfK FutureBuy 2020 study. “This lack of attractiveness of social shopping is not linked to a problem of knowledge of this new purchasing method, but to a problem of trust,” explains Nathalie Bollé. Indeed, only 13% do not know the option, on the other hand, 48% of shoppers clearly express their mistrust of the channel, and this across all generations, from post-millenials to baby boomers”. At the same time, Internet players can find a differentiation ground by investing in an increased consumer path: purchases via VR/AR, connected speakers and visual search (Lens) each show more than 10% of intentions to practice in 2021.

Computers-Office automation: a year animated by the purchases “constraint” and pleasure

The IT-Office automation universe posted revenues of 6.1 billion euros, up +18%. The PC/Tablet families represent more than half of the IT turnover, i.e. €3.3 billion. The trends are not all as strong: for example, the French bought 400,000 desktop PCs for a turnover up by +7% compared to the 3.6 million new laptops acquired and +15% of revenue generated. Office automation is among the big winners: €1.2 billion generated at +28%. However, the most dynamic growth was in Accessories, with sales up 35% to €922 million, driven in particular by screen sales (+60% growth).

With 1 in 2 French people playing video games, IT Gaming equipment sales exceeded €900 million in revenues in 2020, driven by both accessories and hardware.

Telecoms: a market in transition

The Telecom sector posted 2020 revenues of 7.7 billion euros, down 5%. The smartphone market contributes nearly 90% of the sector’s revenue and closes 2020 at €6.7 billion. The only growth market is wearables, with +26% in 2020, driven in particular by sales of Smartwatches (2/3 of the category’s sales). Conversely, Mobile Accessories revenues were down 20% in 2020 and Mobile Telephony continued to decline in 2020 with a 24% drop in sales to €50 million.

In 2020, the French bought 16 million smartphones, down 8% from 2019. The reconditioned smartphone market is on the rise again, according to GfK’s annual estimates, with 2.6 million models sold in 2020 (+20%). Market dynamics are expected to continue, benefiting from a high-potential customer base. Thus, 1 French person out of 5 has already bought a refurbished smartphone according to the GfK REC – Mieux consommer study (Q2 2020). The target of under 25 year olds is particularly interesting: 40% of them are considering the “refurbished” option rather than new for their next smartphone.

Image and Audio-Video fill up the tank

Sustained and unexpected growth in 2020, with the Consumer Electronics / Photo sector ultimately posting revenues of 4.7 billion euros, up +6%, driven by a strong comeback of TV (almost half of EGP-Photo’s revenues) and the video ecosystem and the constant momentum of Headsets. Conversely, the Photo (-20%), Embedded Audio (-31%) and Hifi (-3%) markets did not benefit from the driving effect.