The appeal of the shiny and new shows no sign of stopping, according to IDC. In fact, if the research firm’s consumer spending projections hold up, brands may need to brace themselves for a growing array of channels covering an ever-broadening tech sphere.
Among the notable results in IDC’s Worldwide Semiannual Connected Consumer Spending Guide, released Friday, was the growth of consumer spending on emerging technologies. While purchases of newer gadgets and categories — such as augmented and virtual reality headsets, smart home devices, wearables and on-demand services, among others — are dwarfed by traditional technologies, like smartphones, they are growing at a faster clip.
Overall, the firm forecasts consumer tech spending to hit $1.69 trillion this year, for an uptick of 5.3 percent over last year, and climb to $2.06 trillion in 2023.
About three-quarters of that will be on phones and other personal computing devices. But that amounts to “relatively slow” growth over five years, with compound annual growth rate, or CAGR, of just 2.2 percent.
Meanwhile, the firm expects emerging technologies to show stronger growth, with a five-year CAGR of 13.2 percent.
“Advances in technology continue to drive what ‘convenience’ means today and in the future for connected consumers,” said Stacey Soohoo, research manager with IDC’s Customer Insights & Analysis group.
It’s a matter of consumers going through their own “digital transformation,” she added. “Meanwhile, companies are exploring new opportunities to interact with their consumers, finding the right mix of personalization and functionality to provide frictionless experiences.”
IDC predicts that communication and entertainment will loom largest on the use cases for consumer tech, accounting for more than 70 percent of all spending across its forecast.
Tech companies are also taking stabs at challenges that are similar to the ones that have dogged retailers — namely, how to bridge the digital and physical divide. Their version? On-demand services, which is a brand-new category for the IDC report. Such innovations take an experience that once required a visit to a brick-and-mortar and making it available anytime, anywhere.
This is an “evolving area,” as Soohoo put it, which can “enable access to networks, marketplaces, content and other resources in the form of subscription-based services…” She pointed out Netflix, Hulu and Spotify as prime examples. Meanwhile, various efforts to enable shopping on-demand are also under way. These players often employ data scientists and engineers from such streaming companies, to benefit from their expertise in predicting consumer preferences and behaviors.
Marketers may want to note that, in this report, communication and entertainment will loom largest on the use cases for consumer tech. They account for more than 70 percent of all spending across its forecast. That jibes with the surge in efforts such as voice assistant technologies and chatbots, among other areas.
It’s clear that people are becoming ever more connected and engaged in a growing number of services, platforms and devices. The nature of how that will impact the consumer experience may not be crystal clear. Only that it will.