- Consumer electronics sales boomed during the pandemic thanks to stimulus, work-from-home, and more.
- Some of those products, like laptops and tablets, are nearing their typical 3- to 5-year life cycle.
- But Best Buy’s CEO said she hasn’t yet seen enough innovation to get people to replace aging tech.
2020 was a wild year for consumer electronics sales.
But if you splurged on tech during that time, there’s a good chance you haven’t felt the need — or inspiration — to upgrade your setup.
Thanks to a combination of stimulus checks, home sales, and working remotely, retailers in 2020 posted huge profits as shoppers snapped up brand-new computers, home theater equipment, and appliances.
In what financial types refer to as a “pull-forward,” a lot of spending that would otherwise have been spread out over several years was piled into one.
Anticipating the dip in demand, Best Buy CFO Matt Bilunas told investors in November 2020: “We don’t expect sales trends to remain at the levels we experienced during Q3.”
The thing about computers, tablets, TVs, and other household electronics — unlike, say, apparel or accessories — is that most people don’t need to replace them each year.
For companies that specialize in this area, like Best Buy, that has contributed to several years now of sluggish sales.
Given that many of these products have a typical replacement cycle of about three to five years, things should be starting to pick up as people look to upgrade the aging tech they may have paid for using their COVID stimmy check.
Beyond the pull-forward effects, Best Buy CEO Corie Barry laid some of the blame for the continuing sales lull at the feet of tech brands.
“Right now there isn’t any massive current innovation that would spur you to go buy a new laptop,” she said during the company’s fourth-quarter earnings call on Thursday.
“There’s a little bit,” she added, “We’re expecting more as the year goes on.”
Indeed, tech companies haven’t exactly inspired shoppers to race into their nearest Best Buy for an upgrade, especially when they could buy tickets to a Taylor Swift concert instead.
For example, some of the most celebrated changes to Apple’s recent laptops were essentially the undoing of a prior model’s innovations.
Apple added back additional ports, ditched the controversial butterfly keyboards, and removed Touchbars from many of its MacBooks in recent years.
Apple’s laptops are certainly faster than ever now thanks to its custom-made M-series chips, but the first MacBook with an M1 chip debuted back in 2020, which means most people with an M-series MacBook probably won’t need to upgrade anytime soon.
Barry also said laptops are more frequently replaced than other big-ticket products, so she expects improvement there to precede upgrades of other increasingly high-tech items like appliances and TVs.
Truist retail analyst Scot Ciccarelli (whose question Barry was responding to) said in a note that his team expects Best Buy to benefit from brands offering more innovative products and services this year and next year “after a substantial lull during the pandemic.”
Like mobile phones, laptops may now be encountering the hard limits of physics within the conventional form factor, but perhaps that’s where new platforms like Apple’s Vision Pro come in.
Other tech companies are tossing some bold ideas at the walls too. This week, Lenovo unveiled a design decision of questionable usefulness in the form of the world’s first transparent laptop screen, but it’s a concept prototype and not even for sale.
Either way, whatever the next buzzy tech may be, Barry says Best Buy would love for you to come check it out in their stores.
