The technology sector had a tough 2023. During a CES session in Las Vegas yesterday, Circana Vice President Paul Gagnon and Circana Industry Analyst Ben Arnold revealed the details of what they’ve been tracking over the last year, noting both areas of decline and “pockets of growth.” They encouraged tech vendors to look for innovative ways to sell products, targeting consumers via age group and income bracket as well as looking at geographic zones such as Mexico that are experiencing growth. The good news, they stressed, was the return of growth in the latter half of 2023.

Over the last 12 months, they said, “only 12 percent of tech categories experienced dollar growth and unit growth.” The main tech product categories that saw decline were handhelds, televisions, home audio, computers, and portable audio.

Gagnon noted the decreased buying power of millennials and Gen Z consumers, with the 18–24-year-olds share of tech spending declining 2 percent from 2021 to 6 percent in 2023. The only age category showing growth were the 55+ year-old consumers, who were responsible for 35 percent of tech spending in 2023, up from 31 percent in 2021.

“Young people are far more price conscious,” explained Gagnon. “And they’re the ones who did the most pullback during the holiday season.”

What millennials and Gen Z did spend money on were graphics cards, detachable lens cameras, camcorders, stereo headphones, and notebook PCs.

By income, those earning under $50K spent most on remote controllers, drones, car stereo speakers and dash cameras. Those earning $50-100K spent the most on digital point-and-shoot cameras, e-readers, dash cameras and item trackers; while those making $100+K purchased baby monitors, item trackers, e-readers and lenses, filters and adapters.

Looking at geographic zones, Gagnon drew attention to Mexico. Whereas the U.S., which accounts for 90 percent of North America CE dollars, YTD spending declined 10 percent in 2023. Total Mexico CE dollars were only down 1 percent, with 47 percent revenue growth compared to 2019.

“There’s a sustained opportunity here,” Gagnon said. “Think global when you think of selling products.”

Growth will return in 2024, according to Gagnon. “It’ll start tough,” he predicted. “Total dollars will be down 1 percent in the first six months of the year, as consumers pay off credit cards from the holidays. We think recovery starts in the second half of the year, as key categories enter a refresh cycle. And we think brands will be more focused on what consumers are asking for: strong products and strong values.”