Gfk News

Success of Segmentation Signals New Decade of Opportunity for IT Markets

GfK’s Global Research Director Dr Rudi Aunkofer highlights the segmentation of Mobile Computers as a reason for optimism for the whole IT industry…

Despite the economic crisis in 2009, Mobile Computers perform well in the consumer markets across various countries.  Market growth in the EMEA region rose by 25% in 2009 over the previous year, largely thanks to strong growth in Western Europe (+29%) and also the Middle East & African Countries (+31%). CEE & CIS performed less positively, but were still up by 5% and 4% respectively and taking the serious downturn in these regions economies into account, these numbers indicate an encouraging consumer attitude. So why have Mobile Computers been able to "compete" in the face of a crisis, whilst other products like Desktop Computers and Software have generally failed?

The Mobile Computer Market has segmented and there is now a vast array of products available within this group.  ‘Traditional’ portables, Netbooks, Desktop-Replacement Notebooks, Ultra Small & Ultra Slim Notebooks - these new possibilities have encouraged people to buy more Mobile Computer products in a greater variety and there are now more per household than ever before. Already, 2010 is looking strong from this perspective; slates & convertible tables are segmenting the market further still.

In contrast, software was heading down a different path in terms of product placement. ‘All-in-one/all-inclusive" software suites are a recent trend, which did not provide any additional segmentation to consumers during the last couple of years.  As a result, most software segments were hit to varying degrees by the general crisis and challenging trends and developments were exhibited during 2009 – with the obvious exception of security software.

The outlook for 2010 is bright. Market segmentation is needed further still - recent product launches are proving that the IT-Industry is buying into this strategy in one way or another.  In addition, IT Markets are now reaching a ‘mature’ status and this affects the market in a number of ways:-

• growth is much more selective to single product segments than in the past
  
• other segments without new innovation will suffer from saturation effects
  
• the importance of product placement on shelves increases, giving consumers a range of choices
  
• products are fitted to individual needs by combining Hardware & Software (e.g. pre-selection and pre-installation of apps or utilities)
  
• further opportunities & positioning through price & premium product lines are created

Lynne Henry
International Communications Manager
lynne.henry@gfk.com
+44 (0)870 603 8119
www.gfkrt.com

Double-digit growth forecast for online retail
8 March, 2010

Despite entering a more mature phase in its evolution, online retail in both the US and Western Europe remains poised for a robust period of double-digit growth over the next five years, according to two new forecasts by Forrester Research Inc. US online retail will grow at a 10 percent compound annual growth rate (CAGR) over the next five years to reach nearly $249 billion by 2014. Online retail within the largest European Union nations in Western Europe will grow at an 11 percent CAGR over the same period, hitting 114 billion Euros by 2014.

"Much of the overall retail sector's growth in both the US and the EU over the next five years will come from the Internet," said Forrester Research Vice President and Principal Analyst Sucharita Mulpuru. "To maximize that growth, eBusiness professionals will have to help enable a multichannel strategy that responds to consumers' increased desire to hop between the offline and online worlds and their increasing mobile and social behaviors. The retail innovators over the next five years will demonstrate customer enablement across all touchpoints, not just via a PC-based Web browser."

Despite consumers' increasing use of the Web to research products before purchasing, most retailers fall short on offering a seamless cross-channel experience. According to Forrester's data, while 82 percent of US online consumers are satisfied with buying experiences that began and ended in a store, satisfaction drops to 61 percent for consumers who began their research online and purchased in a store.

The IT Market 2010

Innovations have to be perceived by consumers - otherwise they won't sell. Currently, the industry is facing certain challenges in delivering the technology ‘innovation’ story directly to the consumers. Only successful communication will encourage consumers to purchase in developed markets.

The key market driver will be ‘cloud computing’ - but contrary to most recent press statements, this development will emanate from B2C rather than B2B. Consumers are currently setting up their "home" cloud with wireless routers, printers, connected Hard Disk Drives and Network Attached Storage. By subsequently utilising accessible free or low-cost services they will be able to create their own ‘internet/online’ cloud.  Therefore, the sales potential is in hardware as opposed to services and software. As a consequence, the term ‘cloud computing’ can be interpreted differently; for B2C the connectivity aspect of any kind of digital device is key as is the ability to have access to free or reasonably priced online services.

Retail markets will show growth in all areas where the IT industry is able to communicate innovation to consumers. Price points are reasonably low, so as a result price-reductions will be far less influential in driving the market. Price will instead become an indicator of quality; pricing and product assortment strategies will form the basis of the perceived value of the brand.

Dr. Rudolf Aunkofer
Global Research Director IT
GfK Retail and Technology GmbH 

Rudolf Aunkofer is Global Research Director IT at GfK Retail and Technology GmbH. He is responsible for GfK’s IT Tracking Activities across the different geographies with focus on EMEA, CEE & CIS.  Prior to joining GfK, Rudolf Aunkofer worked in sales management for Siemens Nixdorf Informationssysteme AG and in product management for AEG Hausgeräte GmbH.

Rudolf Aunkofer is the author of many articles related to Information Technology in Germany and Europe and also lectures on this subject.  He is author of the book entitled “Future Concept Multimedia”. Rudolf Aunkofer received his Ph.D. in Management Science and teaches Management & Corporate Planning.

For further information contact:

Lynne Henry
International Communications Manager
lynne.henry@gfk.com
+44 (0)870 603 8119
www.gfkrt.com