This was originally posted at: http://smartblogs.com/leadership/2013/01/07/who-buys-consumer-electronics/.
More than 150,000 people are expected to attend the Consumer Electronics Show (CES) this week in Las Vegas. Over 3,100 vendors will showcase their new and updated consumer electronic devices including high-end television sets, smartphones, smart cars, printers, and much more. The goal of the show is for manufacturers to demonstrate the newest technology to stimulate consumer demand over the next few months and years.
The most cherished consumers for CE manufacturers are those with the most disposable income. These consumers are often the first to adopt new technology because they want the latest and greatest. The rest of the population follows as the price of new technology decreases.
Does consumer electronic spending and ownership vary around the country? What type of consumer buys which types of technologies? This article explores a few examples.
Almost every American household has at least one television set – if not more. Although many consumers are migrating their television watching to other electronics such as computers, tablets and mobile phones, televisions continue to be a staple in most households. HD, big-screens, and surround sound options can impact the amount that people might spend for televisions. The average American spends $186 per year on televisions, according to Esri, a geographic information systems (GIS) company. Some years, they may spend nothing and others they may spend a considerable amount for a new television. Those who spend more are likely buying higher-end televisions and may be replacing them more often.
The households that spend the most on televisions live along the Eastern Seaboard and near large cities like Los Angeles, San Francisco, Seattle, Denver, and Chicago. Many who spend the least live in the Midwest, parts of the South, and in Kentucky.
ZIP codes with households who spend the most for televisions, on average, annually include 10516 (Cold Spring, N.Y.), 94506 (Danville, Calif.), and 60022 (Glencoe, Ill.). Households in these ZIP codes spend, on average, $550 per year or more on televisions.
What type of household might spend the most on televisions? Esri has developed the Tapestry Segmentation system that classifies U.S. residential neighborhoods into 65 unique market segments based on socioeconomic and demographic characteristics.
Tapestry segments with residents that spend the most on televisions, on average, are Top Rung, Connoisseurs, and Suburban Splendor. On average, residents of Top Rung neighborhoods spend $375 or more each year. Residents of Connoisseurs and Suburban Splendor neighborhoods spend $300 or more each year.
Residents of these Tapestry neighborhoods are all very wealthy. They have both high incomes and high net worth. Top Rung is Tapestry’s wealthiest consumer segment. It represents less than one percent of all U.S. households. In their peak earning years, these highly-educated residents are married couples with and without children. Residents of Connoisseurs neighborhoods are well-educated, somewhat older, and conspicuous consumers. Although they’re moving toward retirement, many of these married couples have children who still live at home. Their neighborhoods tend to be older, affluent, established, and slow-growing. Residents of Suburban Splendor neighborhoods are well-educated with good jobs. Most are two‐income, married‐couple families with or without children.
Tapestry segments with households that spend the least are City Commons, Modest Income Homes, and Social Security Set. Households in these neighborhoods spend, on average, $110 per year or less on televisions.
Low income is the commonality among these segments. Differences occur in age, race/ethnicity, and location. Residents of City Commons neighborhoods rent apartments in large, multi-unit buildings in urban areas. They are young singles or single parents, and are very often under-employed. Modest Income Homes neighborhoods are comprised primarily of singles, single parents, and families in older suburbs of metropolitan areas. Residents live in single-family housing and work in service and blue‐collar occupations. Social Security Set communities are dispersed among business districts and around city parks in large US cities. Most of these seniors live alone on fixed incomes in rented apartments in low-rent, high-rise buildings.
Apple Computer Owners
Apple computers have become more and more popular over the last few years. Apple computers captured a 9.3% market share of the personal computer market in 2011, up from 6% in 2006, according to IDC. Much of this growth is likely due to satisfied iPhone, iPad and iPod customers deciding to also switch to a Mac for their personal computer. Who are these people and where do they live?
The areas with the highest likelihood of Apple computer owners are along the Eastern Seaboard and in and around large cities such as Los Angeles, San Francisco, Seattle, and Denver. People least likely to have an Apple computer live in the Midwest.
ZIP codes where people are most likely own an Apple computer are 10023 (New York), 90403 (Santa Monica, Calif.), and 60614 (Chicago). Residents in these ZIP codes are at least 3 times more likely than the average American to own an Apple computer. Each of these ZIP codes either has an Apple store in them or one within 1 mile.
Residents of neighborhoods with dominant Tapestry segments who are most likely to own an Apple computer are Laptops and Lattes, Metro Renters, and Top Rung. Residents in these neighborhoods are, on average, at least 2.5 times more likely than the average American to own an Apple computer.
Income, wealth, and lifestage vary among residents of these neighborhoods. Residents of Laptops and Lattes neighborhoods are single, affluent, and rent, free from homeownership and child rearing responsibilities. . They are highly educated professionals who prefer big-city life in major metropolitan areas. They are very tech savvy. Also tech-savvy are Metro Renters are young, well‐educated singles beginning their professional careers in some of the largest U.S. cities. Most rent apartments in high‐rise buildings, living alone or with a roommate. Top Rung is Tapestry’s wealthiest consumer segment, representing less than one percent of all U.S. households. In their peak earning years, these highly-educated residents are married couples with and without children.
Residents of neighborhoods dominated by the Southern Satellites Tapestry segment are least likely to own an Apple computer. Residents in these neighborhoods are one-quarter as likely to own an Apple computer as the average American. Southern Satellites households are located in rural Southern areas and are comprised of married‐-couple families. They work in the manufacturing and service industries. Most of them own and live in newer single‐-family houses or mobile homes.
Residents of Heartland Communities, Home Town, Inner City Tenants, Prairie Living, Rustbelt Retirees, Rustbelt Traditions, and Salt of the Earth neighborhoods are half as likely as the average American to own an Apple computer. The commonality among these segments is moderate or low household income. Differences occur in age, family type, housing, and location. Residents of Heartland Communities and Rustbelt Retirees neighborhoods are seniors. Residents in Prairie Living neighborhoods are frequently self-employed, or work in agriculture in the breadbasket of the US. Rustbelt Traditions and Salt of the Earth neighborhood residents are content to stay put in former heavy industrial areas in the Midwest. Inner City Tenants neighborhoods are a rich mix of races and ethnicities. These residents are young, either going to school or working hard to achieve the American Dream.
Gaming consoles are a staple in many U.S. households. According to VGChartz, 32.9 million Xbox 360 consoles have sold in the U.S.; approximately 7.7 million were sold in 2012. While the Nintendo DS and Nintendo Wii have more overall sales than the Xbox, more Xbox consoles were sold than any other gaming console in 2012. Who is buying them? Where do they live? What do we know about them?
People living along the Eastern Seaboard, in parts of Texas, Utah, Wyoming, Washington, and California are likely owners of Xbox gaming consoles. Residents in ZIP codes 16503 (Erie, Penn.), 14213 (Buffalo, N.Y.), 77003 (Houston), and 84096 (Herriman, Utah) are 1.5 times more likely than the average American to own an Xbox.
Residents of neighborhoods dominated by the Tapestry segment City Dimensions are 1.5 times or more likely than the average American to own an Xbox, even though their household income is low. City Dimensions neighborhoods include diverse household types and ethnicities. They are located in large, densely populated cities of approximately 2,900 people per square mile. Residents are young; more than half rent apartments in multiunit buildings.
Neighborhoods dominated by the City Lights Tapestry segment are the least likely to own an Xbox. These households are comprised of diverse family types and singles living in densely populated areas primarily in the Northeast. The neighborhoods are a mixture of housing, household types, and cultures. Residents live in single‐family homes, townhouses, and apartments.
Why Does this Matter?
Consumer electronics manufacturers are constantly working on the next biggest and greatest device or gadget that they hope people want to buy. Knowing their target market for both early adopters and the general population is key to their success. Most often the wealthiest consumers will be the first to adopt as they have more disposable income – and want to be the first to have a new technology – because they can. Other populations, though, are just as excited to get new technology to show it off to their friends. Understanding who these consumer types are, what their interests are, and where they live will help manufacturers to build, market, and distribute the right products at the right time and in the right places.
Pam Allison is a digital media, marketing strategist, and location intelligence consultant. You can visit her blog at www.pamallison.com.