Audio technology is evolving at the speed of light. Advanced audio devices substitute old ones, start-ups are vying for market share with well-known brands, and consumers struggle to become among the first happy owners of a new piece of wireless headphones or smart speakers.
That is why both the audio electronics market sellers and newcomers need to keep the track of the rapidly changing trends in the segment.
Audio Electronics Industry Overview
First, let’s view the characteristics and peculiarities of the audio electronics niche. The niche is considered to be a part of the consumer electronics industry, the value of which reaches $1.08 trillion globally. Besides, it also demonstrates stable growth because it’s estimated to increase to $1.14 trillion by 2026. At the same time, audio devices generate remarkable trade revenue on a global scale. According to the estimation of the Statista Research Department, consumer audio trade value grew from $11.7 billion in 2016 to $20.3 billion in 2020 worldwide. Besides, considering the decreased effect of the pandemic on the global economy, the digital audio electronics segment has boosted remarkably, which creates beneficial prospects for existing and new electronic retailers.
Size and Growth Trends in the US and UK
Viewing the size and growth of the audio electronics markets of the US and UK, the American segment demonstrates more significant prospects. The revenue of audio technical electronics reaches $14.21 billion, which is estimated to enhance by 17% by 2025. At the same time, the size of the British audio electronics market is seven times smaller compared to the American one, generating only $2 billion. However, companies in the United Kingdom still face promising opportunities, due to the projected growth rate of 5% within the next 3 years.
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Efficient Product Categories in Audio Electronics Market
The niche of audio electronics is rather diverse, although it is essential to consider the fastest-developing categories to reach high ROI results. In the USA, home theaters and speaker systems have the highest levels of revenue, mostly due to the soundbars and built-in voice assistants. In addition, the use of wireless headphones is enhancing among American customers, which stimulates sales.
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In the United Kingdom, home theaters, acoustic systems, wireless speakers, and wireless headphones are the categories with positive growth dynamics. Regarding the headphones product category, its rapid growth is caused by the enhanced demand among streamers, gamers, and podcasters. What is more, they demonstrate promising prospects for further increase by 2025.
Trends in Audio Electronics Market in 2022
1. Social Commerce
One of the major trends that you need to take into account to succeed in 2022 is the rapid growth of social commerce. This year, social commerce sales are expected to reach $45.74 in the US. According to the survey results, 41% of respondents worldwide purchase on social media. Besides, currently, Facebook is the leading social media network for online shopping. In the US market, 51% of respondents purchase via Facebook regularly.
At the same time, 47% of social media users from the age 16 to 34 years buy products or services using Instagram. Hence, the development of social media marketing tactics becomes even more essential.
Want to see more statistics and peculiarities of SMM use, see our recent blog post.
2. Mobile Commerce
In 2021, the revenue of mobile commerce reached $359.32 billion which is 15.2% more than the previous year. Besides, the criterion is estimated to increase to 44.2% of the overall retail sales by 2025. This is why audio electronics retailers need to consider launching mobile applications and adapting websites to mobile devices.
Gamification is also a growing trend, the global market value of which is estimated at $10.19 million. What is more, the annual growth rate is to be at the level of 25.1% during 2022-2026. As a result, business entities should consider investing in gamification.
Due to gamification, retail companies have an opportunity to increase the conversion rate by 7 times.
4. Holiday Season Sales Boost
Americans love shopping during holidays. In 2021, they spent $33.9 billion online during Cyber 5. Different audio electronics devices were in the top three purchase categories. Viewing in detail, AirPods became the leading product position on Cyber Monday, placing the first position according to the sales rate criterion. In addition, sound bars were in high demand among American customers on November 24, 2021. What is more, the target audience knew about upcoming discounts in different online stores a week before the sales began. This is why you should plan your marketing campaign during Cyber 5 way in advance to generate as much revenue as possible.
Which Sales Channel to Choose: Online or Offline
In 2022, it is impossible to reach remarkable financial and market results only through offline or online marketing channels. On one hand, the share of eCommerce sales in both the US and UK is a constant upward trend, exceeding the physical sales channel revenue. In such a way, by 2025, 66.8% of purchases will be done online in the US and 65.5% of shopping will be made via the internet in the UK market. On the other hand, customers prefer buying expensive or exclusive pieces of audio equipment after the trial within a traditional store.
What is more, 70% of US customers use the click-and-collect service which deals with purchasing online and picking up the product in the store to avoid the shipping cost. That is why internet sales need to work in synergy with the offline marketing channel.
Viewing the sales channels by product categories, the majority of customers prefer buying audio electronics online. In such a way, 64% of American and 60% of British consumers prefer buying speakers and sound bars through online marketing channels. What is more, an impressive 83% of US clients purchase headphones via the Internet, compared to 64% in Great Britain. Hence, the online sales channel in the audio electronics segment is even more widespread than in other industries.
What You Need to Know Developing the Promotional Campaign
Effective promotion is definitely on the list of moving factors for generating a high level of revenue and market share for any enterprise.
1. Organic Traffic is Key
The high result of the organic traffic channel is the major characteristic for both markets, namely 47% in the US and 58.55% in the UK. This is why you need to enhance the effectiveness of your SEO campaign.
Check out recent SEO news that would help boost your audio electronics stores.
2. Direct Traffic Works Well
At the same time, the direct channel, namely typing the URL directly into their browser by the website visitor, is very high in the market, namely 34.34% in the United States and 24.3% in Great Britain. The assumption can be made that customers of audio electronics demonstrate a considerable loyalty to audio electronic brands.
3. Apply Referrals
The American business entities also should take into consideration the high effectiveness of the referrals that bring more than 10% of traffic. This is why music and streaming platforms such as Spotify, should also be included in the marketing campaign of the US audio electronic eCommerce.
4. Don’t Miss Opportunities of the Paid Channel
As for the paid channels, they are more affordable and widespread in the UK than in the US. However, considering the high level of effectiveness of the marketing tool, it should not be neglected. Even though social channels and email channels possess rather a small share in the traffic structure in the US and UK, they still are beneficial tools that need to be implemented by audio electronics retailers.
Promodo successfully applied PPC ads to improve the marketing campaign effectiveness of the UK-based Hi-Fi & home cinema equipment retailer Premium Sound. Using Google Ads, we managed to increase branded traffic on the Premium Sound request by 221%, double the AOV, and increase the number of transactions by 75%.
Strongest Industry Players
Despite the fact that the consumer electronics segment is rather diverse with sellers, it still has remarkable leaders. The Amazon brand places the leading position in both the UK and US markets. However, only amazon.com is operating in the United States, while both amazon.co.uk and amazon.com offer electronic devices for customers in Great Britain. Apple’s website is also represented in the top three consumer electronics retailers in the UK and US industries.
The US market of home audio electronics has three major brands, namely Sony, Bose, and Samsung that possess almost 50% of the overall industry structure. At the same time, Yamaha, Panasonic, and JVC also demonstrate a rather strong competitive position.
As for the UK home audio electronics market, it is more diverse, due to the larger number of key players. Samsung is a leader with 18% of the market share by the revenue criterion. Besides, Sony and Sonos capture 14% and 13% of the UK home audio electronics market respectively. The market share of Philips, Panasonic, Denon, Bose, Yamaha, Bang & Olufsen, Hitachi, Pioneer, Pure Digital, LG, TCL, and Orbit Sound varies from 1% to 9% of the niche.
As for the headphones category, Apple, Inc. is an absolute leader in both markets, namely the market share of AirPods is 28% in the United States and 16.8% in the United Kingdom. Sony and Bose are also in the top three lists in both countries. Marketers also need to consider the fact that more than 50% of customers prefer buying headphones of the same brand as their smartphone, which affects the demand and market structure considerably.
Comparison of Target Audience in Audio Electronics Segment in the US and UK
According to the demographic characteristics of the target audience, both the potential customers in the UK and US are primary men. Besides, the British consumers of the audio electronics niche are slightly older than those that live in the United States. A positive fact of consumer behavior for audio electronics retailers is the fact that 62% of Americans and 50% of British respondents state that they became more dependent on audio appliances. Even though the pandemic has caused such a tendency, 57% of global users keep using audio devices more often even after lockdown. It forms an increasing demand in the audio electronics niche and creates additional business opportunities for industry participants.
Consumer Behavior of Customers in 2022
1. Internet Research
The content matters. 74% of Americans and 53% of British customers search for information on the web before visiting the store. This is why having an informative website, well-developed SEO, and an interesting blog is critically important to winning customers in 2022.
2. Voice Search is on the Peak
Voice search has become a rapidly growing trend. It deals with the fact that voice search during online shopping increased by 100% in 2021. In such a way, more than 45 million US consumers used voice technology to shop in 2021. This is why it is effective to invest in voice assistance in your audio electronics online store.
3. Delivery is the Issue
With the enhanced competition in the eCommerce segment, customers are expecting to get the most comfortable and attractive purchase conditions. In such a way, 65% of UK respondents consider home delivery to be the major reason to shop online. At the same time, 80% of Americans expect free shipping for a certain purchase sum. Besides, 91% of US consumers expect their online orders to be delivered within a week while 27% of British people want to have express shipping. Hence, you need to be ready to satisfy the diverse preferences and expectations of the target audience to succeed in the audio electronics market.
4. Give Your Customers a Variety of Payment Opportunities
Nowadays, it is not enough just to offer payment with a credit card. PayPal and Stripe are becoming increasingly preferred by consumers due to the speed and convenience of payment processing. Approximately 91% of UK clients use PayPal, 37% of consumers use Apple Pay and 19% prefer Google Pay. On the contrary, according to the Statista survey, 30% of American respondents would like to pay continuously with their smartphones.
Also, be loyal to your clients. Buy Now, Pay Later (BNPL) is a popular financial service that provides payment installments for customers. The number of Americans using BNPL increased from 38% to 56% between July 2020 and March 2021.
5. Abandoned Cart still has a Chance
Even though the number of abandoned carts is very high, reaching 80% of all online shopping carts, they still can be converted into sales. Emails sent to re-engage clients who left their carts have a conversion rate of 15%. That is why investing in a retention marketing strategy is definitely worth it.
6. Support of Small Business
Even though large marketplaces are the absolute leaders in the market, 70% of consumers shop for small websites to keep money in local communities and support small businesses. Hence, your small audio electronics eCommerce has great prospects.
Prospects of Companies in the Audio Electronics Segment
Thus, if you are still considering opening or already have an audio electronics store, it is a good industry to develop the company in. Even though the US market of digital audio electronics has a faster growth pace, both the United Kingdom and the United States possess remarkable opportunities for business growth. Nevertheless, in case you doubt how to succeed in the niche, just contact us and we will kindly provide you the assistance.
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