1. Finding Opportunity in a Changing CE Environment
Ben Arnold
Executive Director, Industry Analyst
Consumer Technology
The NPD Group
March 13, 2017
Prepared for ECRM

2. About The NPD Group Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail business intelligence.
Tracking sales of over $1 trillion ($USD) worldwide
Wide industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless.

3. What are the growth drivers in CE?
Emerging technology categories (ex. VR, smart home, drones) are beginning to fuel total industry growth
NPD forecasts 2% industry growth in 2017
Large tech categories have transitioned into maturity putting a focus on segments of opportunity
New features like voice and wireless connectivity are providing growth to existing product categories
Retailers continue to look for ways to optimize a shifting product landscape amid a changing shopper demographic
More shoppers are looking for brand experiences from manufacturers and retailers

4. A slightly improved outlook for large volume categories
12 Month Ending December 2016 Dollar Growth Rates by Category – Total Retail
Top Revenue Categories
Top Growth Categories
Deep Decline Categories
Source: The NPD Group / Retail Tracking Service Categories $100M+ in Retail

5. Smaller declines in biggest categories continue to push towards growth
The NPD Group, Inc./Retail Tracking Service, Positive = $50m+ and negative = -$100m+

6. Emerging Categories

7. Sales of Smart Home products grew 50% in 2016
Source: The NPD Group, Inc./Retail Tracking Service,
Data doesn’t include Amazon Branded or Google Home, Home Improvement stores or Direct Service Provider sales

8. Smart home product purchased 1st
IP Cameras are the primary entry device into the smart home
Smart home product purchased 1st
Base: Smart Home Owners
Source: Connected Intelligence, Connected Home Automation Report, Q2 ‘16

9. Despite sales growth, adoption of smart home devices remains slow
% of Internet HHs that own a smart home device
Source: Connected Intelligence, Connected Home Automation Report, Q4 ‘16

10. 360 degree cameras account for just 1% of total headset units
VR/AR Headsets, 360 Degree Cameras
Unit Volume, Monthly
VR/AR Headsets
360 Degree Cameras
Source: The NPD Group/ Retail Tracking Service

11. Mobile connected VR continues to scale
Google Daydream
Wayfair AR App

12. Instant print camera sales grew 129% in 2016
Instant Print Cameras, Film
Dollar Volume by Brand; Growth Yearly
Highly rated MILC has the potential to build on what was a successful 2014 Holiday. All DSLR makers should be watching out for Sony and other MILC manufacturers
Source: The NPD Group / Retail Tracking Service

13. Sub $200 drones account for ¾ of total unit volume
Dollar Volume, YOY Change
12ME Dec ‘16
Revenue
Revenue Change
The NPD Group / Retail Tracking Service
Ending Dec 2016

14. Top selling drone accessories
Dollar Volume by Type; 12ME
Source: The NPD Group/Retail Tracking Service

15. New Features = New Product Segments

16. Emerging audio form factors are fueling digital assistant use
Doppler Here One
Sony MDR 1000x
Google Home
Amazon Echo Dot
Bragi Dash

17. Holiday + iPhone 7 accelerated the transition into Bluetooth
Stereo Headphones
Dollar Share Bluetooth vs Wired; Monthly
Source: The NPD Group / Retail Tracking Service

18. Unit Volume by Price Segment
Unit demand is strongest in entry level and premium wireless headphones
Bluetooth Headphones
Unit Volume by Price Segment
Source: The NPD Group, Inc./Retail Tracking Service

19. Google sold 660k units in Nov & Dec
Wireless Speakers
Dollar Share by Quarter
Source: The NPD Group, Inc./Retail Tracking Service

20. Though audio remains a top application, the Echo use case is expanding
Source: Connected Intelligence, Connected Home Automation Report, Q4 ‘16

21. US $1000+ point & shoot is up 33% YOY
Digital Point and Shoot
Dollar Volume by Price Segment, 12ME
Highly rated MILC has the potential to build on what was a successful 2014 Holiday. All DSLR makers should be watching out for Sony and other MILC manufacturers
Source: The NPD Group / Retail Tracking Service

22. Cameras vs Camera Devices
Digital Imaging
Dollar Volume by Year
Source: The NPD Group/ Retail Tracking Service

23. Retail Continues to Shift

24. .com Share Continues to Grow
eCommerce Dollar Share of Consumer Technology
($%)
Source: The NPD Group / Consumer Tracking Service,

25. Retailers performing better online
Source: The NPD Group / Consumer Tracking Service

26. Retail Stores=Brand Experiences

27. Technology Hardware Sales Dollar Share of Buyers by Age, Yearly
34 and under account for an increasing portion of total technology spending
Technology Hardware Sales
Dollar Share of Buyers by Age, Yearly
Source: The NPD Group / Consumer Tracking Service,, No Consumables

28. Demographic + Technology + Brand = Disruption
Spectacles

29. Thank You Ben Arnold Industry Analyst- Consumer Technology
@TechBarnold
Nim Sharon
Director, Business Development
Thank You