Australians purchase more consumer technology from local retail stores as price adjustment continues
Sydney 22 May 2012: The latest Canon Consumer Digital Lifestyle Index (Canon CDLI), released today in partnership with GfK Retail and Technology, reveals that Australians continued to purchase more digital lifestyle devices at local retail stores in 2011, buying 15.795 million units at a total value of $6.345 billion.
While unit sales grew by 716,800 units for the full year versus 2010, the Average Selling Prices at Australian retail stores continued to fall, dropping 13.5% across the CDLI categories (average $63 per device). The price decline trend for digital devices continues to contrast sharply with the overall increase of inflation at +3.1% for the year.
“The index is a regular barometer of retail sales in 13 digital technology categories in Australia, including TVs, digital video recorders, digital cameras and computers,” said Jason McLean, Director – Canon Consumer Imaging, Canon Australia. “The latest report shows that, despite continuing increases in costs of living in Australia, consumers continue to receive more quality technology for less.”
“Reflecting on the last nine years of the index, we see just how much consumers have enjoyed the availability of advanced, high-quality tech products at continually declining prices,” continues McLean. “When you consider that since 2003 the Average Selling Prices for digital cameras and plasma TVs have fallen 68% and 90%, respectively, we can see just how much the market has moved.”
Australian Tech Market has endured amid price deflation, global competition
McLean believes that the consumer technology market has endured thanks to local investment by the industry and an innovation cycle that offers significant reasons to upgrade. However, this has taken place against the backdrop of severe price deflation and increased costs of doing business.
“There’s clearly an adjustment taking place as the technology market moves to address global price disparities, with average selling prices declining across the index each month for the past 24 months,” says McLean. “While prices are moving to find their natural point of balance, our market is forced to contend with competitive disadvantages in the form of higher costs of doing business and the GST exemption for imported products under $1000.”
A recent report by Ernst & Young for the National Retail Association stated that the high tax-free import threshold in Australia is a “significant component” in the difference between Australian and overseas online retailers “equating to 14% of the sale price on average”.
“As an industry we’re absorbing the price deflation straight to the bottom line and at some point this could threaten the viability of local operations. The warning signs are there now and while Canon has had no response from Ed Husic MP, Federal Member for Chifley to discuss competitive issues, we welcome the upcoming parliamentary inquiry to examine and resolve them.”
Compare the real value to be had in-store
McLean believes that misleading online price comparisons may prevent some consumers from discovering the real value that is available in their local stores: “It is common to see unfair price comparisons using local RRP versus tax-free selling prices in the global market,” says McLean. “The price paid at the register is the only fair price for comparison and I encourage consumers to always check the value to be had in-store. So far this year, Canon has taken price action more than once on popular products and we continue to work with our retailer partners to drive value for Australian consumers.”
2H 2011 sales breakdown (July – December 2011)
In the second half (2H) of 2011, Australians purchased 9.066 million digital lifestyle products at local retail stores, a 6.7% increase on the volume of products purchased in 2H 2010. Australians spent $3.430 billion locally on digital lifestyle products in 2H 2011, with consumers spending a significant $2.364 billion on the top three products alone: Personal Computers ($1.088 billion), LCD TVs ($956 million), Digital Cameras ($320 million).
Strong category volume growth was observed for Personal Computers (+42%), Digital SLR cameras (+26%), LCD TVs (+21%), PVRs (+17%), MFDs (+14%), and DVD (including Blu-ray) players (+6%).
Notable category performers, in volume terms, included Games consoles, which maintained volume sales in excess of 1 million units, despite increased usage of low-cost, smartphone-based games applications. Achieving sales of more than 1.4 million units, the Digital Cameras category remains in the top-three for the ninth consecutive year despite market maturity, household penetration of around 80% and the proliferation of competing photo-capture devices.
Tech evolution drives a Lifestyle revolution
Lifestyle insights from the latest report include (see report Part 2 for complete findings):
- Mass image-capture trend: we take an average of 146 photos per month (up 57% vs. 1H 2008), with DSLR photographers taking a significant 288 photos per month on average.
- Multi-device integration: single-device ‘convergence’ yields to multi-device ‘integration’ as the user – not a device – becomes the point of convergence, integrating devices seamlessly into their lifestyles. Purchasers of technology own an average of 6.17 digital lifestyle products and acquired an average of 2.2 devices in 2H 2011
- Multi-screening: the living room TV remains the central home viewing experience but multi-screening behaviour, with consumers accessing multiple devices simultaneously (e.g., TV plus PC, TV plus tablet) means that usage occasions have increased and often overlap. 24% of PC buyers watch TV on their PC and 66% use their notebook in the living room.
- The changing role of TV: while in 2003 the primary use of the TV was watching broadcast shows, in 2011 22% of consumers access catch-up TV, 16% download full-length movie titles from the internet and at least 10% access online content via their TVs. Also, one third of TV buyers play videos games from their console.
The complete 2H2011 Canon CDLI report can be downloaded from the Canon Australia website: http://www.canon.com.au/About-Canon/News-Events/Canon-Digital-Lifestyle-Index
Canon is the world's leading imaging brand that actively inspires with imaginative ideas that enable people to connect, communicate and achieve more than they thought possible through imaging solutions for business and consumers. Canon's Australian R&D company, CiSRA, develops and exports digital imaging technologies for use in Canon products worldwide. Canon has ranked among the top-four US patent recipients* for the past 20 years. Australia also operates Canon Finance Australia, which offers one-stop shopping for customers wanting leasing or finance services. For more information, visit www.canon.com.au, www.facebook.com/canonaustralia, www.twitter.com/canonaustralia, www.youtube.com/canonaustralia
* Based on weekly patent counts issued by the United States Patent and Trademark Office
 Excludes internet/online sellers
Average Selling Price refers to the average of the prices actually paid by shoppers for their technology purchase
 The threshold question: Economic Impact of the low value threshold of the retail industry. 22 February 2012 Ernst & Young, Australia.
The latest report focuses on July-December 2011 and follows from the January-June report launched in October 2011. Full Year figures are provided for total category performance only.
 Survey of digital camera buyers