Market Trends April 2018
Electricians in Demand
Klein Tools annual State of the Industry survey shows that electricians are in demand, and are working on more smart technology than ever. More than 40% report that they are working more than they were a year ago, with work in new home construction, commercial properties, office buildings and retrofitting for homes all on the rise. The biggest change is the widespread increase of high-tech installations. While tech is increasing in residential work, high-tech installations remain more prevalent in commercial settings. Electricians with tech know how are in demand, with 56% of electricians seeing an increase in the amount of high tech work they are doing. Three in five have done more installations in commercial buildings and seven in ten have seen more smart offices than five years ago. Fewer than one-fifth are concerned that technology will impact their job security. More than 600 union and non-union electricians were surveyed by Russell Research for the annual study. Overall 40% of respondents were union and 60% were not.
Voice Shopping to Grow
Voice shopping sales could reach $40 billion by 2022, according to a new study from OC&C Strategy Consultants and a comprehensive news story in USA Today. Purchases made through devices like Google Home and Amazon’s Echo account for about $2 billion in sales today. Analysts see this growing exponentially as consumers become more comfortable and speakers become as commonplace in homes as flat-screen TVs are today. Among US residents who have a smart speaker, 62% have used it to buy groceries or some other item. The report predicts that the percentage of homes with a smart speaker will rise from the current 13% to 55% by 2022. Amazon Echo currently has the lion’s share of the smart home speaker market, followed by Google and Microsoft’s Cortana. Echo owners reportedly spend an average of $1,700 each year at Amazon, members of Amazon Prime spend about $1,300 a year and the average for all US Amazon customers is $1,000 a year.
Walmart’s New Customers
Walmart is trying to attract wealthier people who like to shop online and may never actually shop in a physical store. Walmart has been increasing their digital presence with a series of acquisitions, buying online retailer Jet for $3.3 billion in 2016 and purchasing specialty online retailers ModCloth, Bonobos and Moosejaw, as well as acquiring Parcel, a logistics startup that allows Walmart to offer same-day delivery for online purchases in New York. Walmart is also testing a program with smart-lock company August Home that would let people order food from Walmart and have the delivery people put it away in the customer’s home. And most recently Walmart discontinued some long-time lines of clothing and unveiled four lines of private-label apparel.
Retail Customer Satisfaction
The American Customer Satisfaction Index Retail Report 2017 shows the retail sector as a whole is holding steady with a satisfaction score of 78.1, down just a bit from 78.3 in 2016. However, supermarkets and health and personal care stores gained points, while department, discount and specialty retailers fell. Internet retail sites also fell one point to a score of 82, still higher than the sector’s score overall. In specialty retailers, Lowe’s earned a score of 78 and Home Depot was scored at 76.
Personalization Tactics Can Backfire
Some 40% of brands and 75% of consumers surveyed felt that personalization in marketing can come across as invasive and “creepy.” However, consumers and brands differed when surveyed about the potential impact of a negative experience with personalization. Brands were more likely to assume consumers would be frustrated (44% of brands vs. 34% of consumers) and disappointed (38% of brands vs. 20% of consumers), while consumers were more likely to say they were angry (23% of consumers vs. 12% of brands) or stopped doing business with a company (26% of consumers vs. 6% of brands). One Accenture study estimated that poor personalization and the resulting lack of trust in the brand has caused 41% of consumers to stop doing business with a company, leading to an estimated $756 billion in lost sales.
Millennials Moving into Housing
Last year millennials accounted for 36% of US home purchases, more than any other group, according to the National Association of Realtors. Baby boomers were second, accounting for 32% of purchases. Industry analysts say that sales to millennials would be even higher if there were more affordable properties available for first-time buyers. The NAR study found that a typical millennial buyer had a household income of $88,2000 and purchased a house with a median price of $220,000. Almost half also reported student debt, with a median loan balance of $25,000. First-time homebuyers accounted for 34% of all home purchases in 2017, down from 35% in 2016. In 2010 they accounted for half of all home sales. Sixty-five percent of homebuyers said they were married couples, and 37% had children under age 18 living at home. The average home was 1,870 square feet and had three bedrooms and two bathrooms. Recent buyers said they expect to live in their home for a median of 15 years, with 18% planning to never move again. About 40% of buyers had been renting an apartment or home; 12% had been living with family or friends.
Google Partners with Retailers
Google is teaming up with retailers in an initiative called Shopping Actions that influences shoppers’ purchasing decisions on cell phones, desktops and smart home devices by offering up listings that appear as sponsored shopping results. It uses a pay-per-sale model, with Google taking a portion of each purchase that stems from a search referral. The payment plan is different from Google’s pay-per-click model for advertising, where businesses pay each time someone engage with an ad. Google says that idea came from tens of millions of consumers doing image searches of products and asking, “Where can I buy this?” Retailers can use Shopping Actions to offer customers the option to add items to their Google Express shopping carts using voice-activated Google Home. Target has reportedly seen a 20% increase in the number of items in shoppers’ Google Express carts as a result, according to Reuters.
Amazon was issued a patent for cushioning packages with inflatable air bags, allowing them to be dropped by drones from as high as 25 feet. The drone would inflate the air bag while in transit. The air bag could also be used in case the drone experiences any sort of operational problem in the air. Reportedly the drone could use cameras and sensors to make sure the drop zone is empty of people, animals and fragile objects.
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