Home Science & Tech Gadgets were in fashion. Now they are not.

Gadgets were in fashion. Now they are not.

by YAR

Many businesses have been surprised by changes to our spending options this year. Americans eager to travel and party after two years of mostly staying home are getting fed up with plane tickets and fancier clothes, and ignoring the lawn furniture and soft pants we splurge on in 2020.

Consumer electronics may be the burning center of Americans’ changing buying habits. Buying gadgets has suddenly gone from hot to uncool, a change that will most likely bring pain and confusion to many businesses, and potentially some great deals for people who still want to buy electronics.

In the early months of the pandemic, many of us were so eager to buy internet routers, laptops, game consoles, and other tech gear to stay productive and comfortable from home that some products were impossible to find. However, experts warned that people would inevitably stop buying some types of devices until they needed them again.

The magnitude of the change after two years full of device purchases has surprised many people. From January to May, electronics and appliance stores make up the only retail category whose sales fell compared to the same five months in 2021, the Commerce Department revealed last week. Best Buy said last month that purchases at its stores fell across the board, especially for computers and home entertainment, and are likely to stay that way. And research firm IDC expects global smartphone sales to decline this year, most sharply in China.

What’s bad for manufacturers and electronics stores could be good for us, but value hunters will have to beware. Nathan Burrow, who writes about shopping deals for Wirecutter, The New York Times’ product recommendation service, told me that some electronics are already discounted in price. But a sale when inflation is at its highest point in 40 years in the US may not always be a good deal. A discounted product could still cost more than similar models a few years ago, Burrow said.

The whiplash in shopping habits has led to Walmart, Target, Gap and a few other retail chains being stuck with too many types of the wrong products. That’s also true for some types of electronics, meaning prices are likely to drop further during the summer shopping “holidays” at Amazon, Target, Best Buy and Walmart.

Burrow predicts significant price discounts on tablets, internet networking equipment, Amazon devices and some laptops, including Chromebooks.

Research firm NPD Group said this year that consumer electronics sales would likely decline in 2022 and again in 2023 and 2024, but two previous years of electronics sales would still leave overall sales higher than in 2019. From highest overall sales, this phenomenon of electronics sales unexpectedly soaring and then suddenly plummeting is disorienting device manufacturers and sellers.

“It’s the unpredictability that makes everything worse,” said Jitesh Ubrani, research manager at IDC.

Making long-term predictions is difficult for electronics manufacturers, retailers and buyers. Some executives have said that global shipping and availability of essential components like computer chips will never be normal in 2019. Select electronics like super-low-priced TVs and laptops could be gone forever, as manufacturers and retailers they were hooked on higher profits from more expensive products.

In the electronics industry, experts told me there were talks about doing things differently to prepare for possible future crises, including expanding device manufacturing to countries other than China. It’s not clear how our spending may change again in response to inflation, government efforts to cool rising prices, or a potential recession.

For a while, people in rich countries got used to a constant flow of cheap and abundant electronics, furniture, clothing, and other goods thanks to interconnected global factories and shipping. The pandemic and the madness it unleashed in supply chains has caused some economists and executives to reconsider the status quo.

The ups and downs of electronics sales from 2020 may resolve themselves in a couple of years. Or perhaps consumer electronics are a microcosm of a world changed by the pandemic that may never be the same again.

  • Microsoft will remove features that purport to identify a person’s age, gender, and emotional state from its facial recognition technology. My colleague Kashmir Hill reported that this decision was part of a broader effort at the company and elsewhere in the tech industry to use AI software more responsibly.

  • A rural California town is divided over Amazon package delivery drones: “I don’t want drones flying around my house, we live in the country,” a resident of Lockeford, California, told The Washington Post. (A subscription may be required.)

    Related from On Tech last week: Where are the delivery drones?

  • Is Google search not what it used to be? The Atlantic looks at the snippets of truth, including ruthless marketing, behind the feeling that web search is becoming less useful. (Subscription may be required.)

You should read my colleague Sarah Lyall’s article on Wasabi, the semi-retired champion Pekingese who doesn’t play fetch, run fast, or do anything but enjoy his life.

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