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With new unemployment claims totaling 44M over the last 12 weeks in the US, and economic uncertainty at a record high, you’d expect consumers tightening their belt, in particular in regards to purchasing items that go beyond the absolute household necessities. But, nope, that’s not the case.

In fact, stocks surged yesterday, to a large extent because US retail sales jumped by a record 17.7% in May over April, coming in at more than double the consensus estimate for a rise of 8.4%. This followed a record 14.7% plunge in retail sales in April, with the reversal suggesting consumer spending was picking back up as businesses began to reopen in May.

Consumer spending on electronics followed an even more surprising pattern, based on the data that Ian Hamilton, President, Technology Sector, at NPD showed at last week’s The Imaging Alliance board meeting, a few data points of which are shared here.

NPD’s numbers indicated that the overall category of consumer electronics (which includes computers, cameras, but not smartphones) has actually done quite well even during the middle of the COVID-19 lockdowns. In fact, in the 7 weeks leading up to May 23, consumers spent an aggregate of $2.2B more on consumer electronics than they did in the same period a year ago:

The NPD

Source: The NPD Group, Inc., U.S. Weekly Retail Tracking Service

How come? For one, we’ve been pumping the economy with stimulus checks and federal unemployment benefits in addition to state unemployment benefits for those who lost their jobs. But also, with so many people bound to their homes, you can imagine there’s also been a shift in how people spend their money: we’ve been going out less (UberEats pulled in $3.7 billion in gross bookings, representing a 73% increase YoY), we have watched movies at home instead of in theaters (Netflix added 15.8M subscribers in Q1, almost twice what Wall Street expected), we couldn’t go to the gym (Peloton membership increased 30% QoQ in Q2), we all have more time on our hands to tinker with the electronic gear (and to really learn all the fancy camera features, as was reported in our The COVID-19 Mitigation and What’s Next Survey Report), and finally, we couldn’t visit our local retailers and chose to buy from online retailers instead (Amazon revenues were up 26% YoY in Q1).

How about camera sales, which are part of these overall consumer electronics data? Well, they form a more complicated picture, partially because cameras were already on a YoY downward trajectory before COVID-19, and also have seen shifts within this category from DSLRs toward mirrorless cameras.

The overall category of interchangeable lens cameras (DSLRs, mirrorless cameras) dropped 42% YoY in dollar sales, whereas this category had dropped less (32%) in the 7 weeks prior. I.e. the downward trend accelerated, to some extent caused by a lower average sales price during the pandemic (discounts during the lockdown). Mirrorless cameras sales faired a bit better: in terms of units, they declined less YoY during the 7 “pandemic” weeks leading up to week 3 of May than they’d been declining before these 7 weeks.

This leaves the question: What is in store for us all? First, while we’re all desperate to hear some good news, it is easy to ignore that many of the measures to crank up the economy will end sooner or later, and a sizable portion of the population is expected to stay unemployed for quite a while. Some of the factors mentioned earlier that could specifically explain the healthy consumer electronics market will cease to exist: people will spend again more money on dining out, going to movie theaters, and will no longer have the time to tinker with any new electronic gear.

But, as I also stressed in our previous newsletter, not everything will go back to where it was and there will be winners and losers. Many consumers have gotten used to buying different things and buying them differently (i.e. online) and from different vendors.

It’s up these newly adopted vendors to continue to stay relevant to their new customers by offering the types of products through the type of methods and desired services that match the evolving needs of these new customers.

It’s up to the legacy vendors who have suffered most during the COVID-19 pandemic to win their old customers back – while hopefully having learned a thing or two as to why their customers chose these alternative solutions, and making informed decisions as to how they can earn their business back.

Source for camera sales numbers: The NPD Group, Inc., U.S. Weekly Retail Tracking Service, Detachable Lens Camera, Digital Lens Type: Digital SLR, Mirrorless Detachable Lens, 7 weeks ending May 23, 2020 vs. same weeks in 2019

And a few more things… facial recognition

Lots of reports on the misuse/shortcomings/dangers of facial recognition, much of it triggered by the widespread protests against racism and police brutality. Before we get to the miscellaneous other news, here is a quick roundup.

IBM, Amazon and Microsoft have now all declared that they won’t sell or would at least pause police use of their facial recognition technology until there are federal laws that regulate this type of technology.

Still, the most important suppliers to law enforcement agencies, such as NEC Corp., Idemia and Clearview AI, have not joined in on the voluntary moratoriums. In fact, controversial facial recognition supplier Clearview AI now exclusively sells to law enforcement agencies, while no longer offering its services to private companies and non-law enforcement entities.

And then there are others who are stepping into this market. Last week, Poland-based Faceware.ai launched a DIY reverse face image search service, called PimEyes. Anyone can upload a face image and the service crawls the web to find photos of the same face, i.e. person. The mother company, Faceware.ai primarily caters to “law enforcement and counter terrorism” outfits.

(Doesn’t Google’s reverse image search do the same? No, it lets you find photos on the web that are similar in appearance, such as photos with people with the same haircut, but it is not targeted to deliver the photos of the exact same person, as it lets you do inside your own Google Photos collection).

Technology wouldn’t be technology if it is not also used to develop solutions to counteract the dangers of other technologies, e.g. by hiding faces and scrubbing metadata when you photograph a protest.

And a few more things… other news

Pex. Photo texting solution looking for a new home. Pex, a solution for ordering photo print products through SMS or messaging and shown at Visual 1st last year, is ready to sell its technology and IP assets. Need to expand your services to customers who live and breathe texting? Contact founder Todd Brown.

Snap. Embedding third party apps. Snap announced a new product called Snap Minis — small apps built by third-party software developers that can be opened within Snapchat. These apps can be opened within Snapchat’s chat function and can be used together by groups of users. Snap Minis represent the company’s latest efforts to expand its work with third-party software developers. Snap already works with developers to build AR lenses for Snapchat and to integrate the company’s Stories feature with other apps.

Adobe. Free filter app. Adobe has launched a new and free app called Photoshop Camera that’s filled with a bunch of elaborate filters that can change your face and the world around you. The app has Photoshop in its name but otherwise has little to do with Photoshop.

Snap. AR going strong. Snap announced that more than 170M people — over three-quarters of Snap’s daily active users — access the app’s AR features on a daily basis. Two years ago, Snap shared that creators had designed over 100K lenses on the platform, now Snap says there have been more than 1M lenses created. Among the latest announced innovations: voice control for Lenses. Say “Hey Snapchat, make my hair pink” and yes, your wish comes through in real time.

Light. The end of the tunnel or yet another pivot? Light, you know, the company with the 16-camera smartphone, which later pivoted to B2B for clients like Nokia/HMD (its Nokia 9 PureView has 5 lenses), Xiaomi and Sony, is exiting the smartphone market. Not clear what’s next. Light raised $121M in a series D round in July 2018.

di support. Design award. Can photo kiosks be cool? Few folks thought so until di support launched their PrintCube a few years ago (and also showed at Visual 1st). Now, it is the recipient of the German Innovation Award, given by the German Design Council, which highlighted the product’s user friendliness and added value compared to previous solutions.

Visual 1st. Join us Oct. 14-15, 2020!

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Best,

Hans Hartman

 

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