Smart home, storage and SSDs are growing the IT retail market – GfK

GfK account executive Megan Wood takes a look at what’s selling well in the market, including smart home net cameras and SSDs.

The UK IT Retail market has remained flat for volume but increased in value with 14 per cent growth for Q4 2015. Drivers of this are media streamers (72 per cent), monitors (38 per cent), visual cams (185 per cent mainly attributed to dashcams and netcams) as well as storage (15 per cent).

A strong area of growth in storage is SSD. With 54 per cent volume in Q4 2015 compared to Q4 2014 (with only an increase of 24 per cent for volume for the same period) it is benefitting from the growing PC gaming market. Gaming peripherals are in strong growth with gamers needing to upgrade to keep up with the higher gaming requirements.

Higher storage is also becoming more significant in smartphones with higher requirements for apps, music and increasing photos specifications. Smartphone cameras are now able to take 4K photo, still cannibalising the entry-level digital camera market. It is also demanding 193 per cent extra storage than HD photos for a one minute video (comparing 8MP to 12MP).

Despite strong promotion from cloud services, consumers are looking to two main offline alternatives; dual USBs and Micro SD cards. Dual USBs which can connect computers to either android or iOS smartphones and has seen volume increases of 193 per cent year-on-year for Q4 2015. MicroSD memory cards who additionally benefit from compatibility with media tablets has seen an increase (for the same period) of 62 per cent for volume but only 48 per cent for value indicating price erosion. 

Offline personal cloud services have not benefited from the increasing need of data transfer. NAS (Network Attached Storage) has seen a decrease of -20 per cent year-on-year for Q4 2015 in volume but only -1 per cent value. This decrease was because of strong promotional activity in this category in 2014, some suggesting that despite this, there is a lacking of consumer awareness and knowledge.

In a recent smart home study, over half of consumers believed that the smart home was going to impact their lives and with early adopters this then increased to over three quarters. One of the areas of appeal were security and control, with GfK seeing Q4 2015 year-on-year volume growth of 106 per cent for net cameras as well as smart entertainment e.g. wireless audio systems being in 61 per cent volume growth for the same period.

Storage has two key driving trends with growth; the increase of storage requirements for smartphones and the growth of PC gaming. However, consumers are still to see the benefits of offline personal cloud storage and adopt NAS storage but have already started to adopt the smart home in regards to security and entertainment.

Source: GfK Point of Sale tracking, UK, Retail industry, Q4 2015. GfK Smart Home study conducted October 2015.

Megan Wood is account executive at analyst GfK.