Home Advertiser ‘Do I Really Need That New Smartphone?’ Consumer Tech Brands Adapt Their Marketing For A Changing World

‘Do I Really Need That New Smartphone?’ Consumer Tech Brands Adapt Their Marketing For A Changing World


Consumer electronics sales are usually a bellwether of consumer confidence and the broader economy.

But this year, all bets are off.

Although worldwide mobile phone shipments have been declining for several years largely due to market penetration and higher prices, the drop in 2020 is expected to be far more extreme, down to 1.57 billion from 1.81 billion last year, according to CCS Insight. That’s less than in 2011.

“If you’re a device maker, you’re playing a very dynamic game of chess right now,” said Eric Schmitt, a research director and analyst at Gartner.

These challenges – magnified by COVID-19’s effect on supply chain stability and because consumer tech purchases are often discretionary – complicate the process of devising a marketing plan in these uncertain times (cue piano music).

By the numbers

The first quarter was a mixed bag for the big consumer tech companies.

Although Apple’s services revenue grew by more than 17% year-over-year, iPhone revenue for the first three months of 2020 declined by 7% YoY due to coronavirus-related supply and demand constraints, particularly in China which was the first to go under lockdown in late January. But by the same token, wearables, iPads and home accessories – all useful for people trying to work, learn remotely and stay fit while in quarantine – were up 23% year on year, a March quarter revenue record.

At Samsung, Q1 brought decreased demand for its hardware thanks to the pandemic and the cancellation of major live sporting events, including the Olympics and the UEFA EURO 2020 soccer tournament. TV demand declined in Q1, a trend Samsung expects will continue into the second quarter. There’s also pressure on the commercial side, as hotels, bars and restaurants cut the cord on their pay TV service.

But it was another story at Microsoft. Although consumer hardware and services were comparatively weaker than B2B enterprise sales, the move to remote work – and the desire for at-home play – helped buoy demand for Xbox sales, which increased 2% in the quarter (up from an 11% drop last quarter) and for Surface laptops, sales of which rose by 1%.

So demand for hardware is highly variable based on what type of device you’re selling.


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“Maybe I can’t buy a new TV right now – but that’s because my kids need new computers for school at home,” said Brian Wieser, global president of business intelligence at GroupM. “Maybe a GoPro isn’t very useful to me right now, but a health tracker works quite well for counting the stairs I climb in my apartment building.”

Consumer tech brands have an opportunity to capture these pockets of demand with relevant marketing.

“The question is how to do it in a way that reflects their product and distribution strategy while cutting marketing budget in a way that makes sense,” Schmitt said. “For Q2 and Q3 at least, caution is the watchword.”

Product marketing

Unless the cash flow situation is dire, the worst thing a consumer hardware brand in a highly competitive market can do is go dark, said Rob Gaige, managing partner of consulting at sparks & honey.

“We work with some pretty big tech clients that sell computers, laptops and the like, and we’re advising them not to stop marketing, but rather to change direction,” Gaige said.

For most, that means more brand-focused messaging, adjusting marketing spend with an eye on regional product rollouts and addressing online demand more efficiently. Consumer tech, especially phones and TVs, usually rely heavily on in-store sales.

Samsung, for example, is leaning into online. Demand for mobile handsets is down overall, but ecommerce is increasing. The manufacturer told investors in April that it’s planning to counter the effect of store closures with a focus on improving cost effectiveness and strengthening its online and B2B channels.

Get the message

The message also really matters, said Husani Oakley, chief technology officer at Deutsch.

Consumers are being more price conscious and cautious with their personal budgets, “and by ‘they,’ I mean me,” Oakley joked. “I’m hardly spending any money right now.”

“But the longer this lasts, the more consumers move beyond essentials as electronics and entertainment platforms become more central to our lives than they’ve ever been,” he said. “Any marketing messaging should be cognizant of the situation while still pushing brand values.”

Which doesn’t necessarily mean eschewing performance marketing in an effort to juice sales and try to move the devices that are probably piled up in warehouses right now.

“You can drive to a website,” Oakley said. “But rather than going, ‘Hey, here’s 10% off all laptops,” talk about solving an issue, talk about: ‘Your computer keeps crashing and you’ve got a client meeting coming up … maybe it’s time to upgrade? And we can help.’”

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