Citing trends indicating that consumers are opting for more affordable options, Circana has adjusted its forecast for consumer electronics sales in 2025 to a modest gain of 1%, down from the previously anticipated 1.6%. This shift reflects a growing pattern of “trading down” behavior, where cost-conscious consumers are prioritizing budget-friendly choices over premium products.
The landscape for hardware sales began to shift significantly earlier this year. In January, the Consumer Technology Association (CTA) projected a 2.6% growth in hardware sales for 2025, building upon a slight 1.1% increase in 2024 after two years of declines. This expected growth was driven by a decrease in prices for popular items like televisions, wireless earbuds, and gaming hardware, along with innovation spurred by AI in various devices. Nonetheless, the CTA also highlighted concerns about potential tariffs that could thwart these advancements and hinder sales.
In the first half of 2025, which included consumer behavior through June, Circana reported a 1.5% growth in consumer technology retail dollar sales. This uptick was largely attributed to early purchasing trends in March and April, though spending dipped in the following months as consumers re-evaluated their priorities and budgets.
“Technology was at the forefront of consumer purchasing decisions early this year, with IT products gaining special attention as the PC market enters a renewal cycle,” noted Paul Gagnon, VP and technology industry advisor for Circana. However, the immediate gains seen early in the year may prove less favorable for the latter half as a wider range of consumers exhibit trade-down behavior across various product categories.
Among the products contributing to first-half growth were notebook and desktop PCs. Categories such as smart glasses, digital point-and-shoot cameras, and rings marked notable gains due to fresh offerings. Nonetheless, while the television market saw a 2% rise in unit sales, lower prices led to a 3% decline in total dollar sales.
Looking ahead to the second half of the year, Circana projects continued growth in the computer segment, particularly with larger televisions (75 inches and above) expected to experience double-digit sales increases as consumers upgrade their home entertainment setups. On the flip side, overall TV sales are likely to decline due to diminished interest in smaller models. Other categories like soundbars and smartwatches may also suffer from reduced demand in light of broader economic uncertainties.
“Economic instability and ongoing inflation are bound to affect consumer spending habits,” Gagnon stated. “Yet, the anticipated tech upgrade cycles should help sustain demand across several categories.” He emphasized that consumers are increasingly price-conscious, often opting for more affordable alternatives to cope with individual product price hikes.
Best Buy CEO Sees Sales Growth in Computers and Wearables, Gaming
During Best Buy’s first-quarter earnings call on May 29, CEO Corie Barry expressed optimism regarding sales growth in computers and tablets. This growth is partly supported by the forthcoming end of Windows 10 product support in October, along with advancements in AI technologies. Mobile phone sales, which have struggled in recent years, showed signs of recovery thanks to labor investment by major carriers like Verizon and AT&T. Barry also spoke positively about expected launches in gaming and other wearable tech, including Ray-Ban Meta glasses.
However, even with these optimistic forecasts, Best Buy has revised its annual outlook downward. The retailer has already begun raising prices on certain products, attributing this to the looming threat of tariffs. Barry acknowledged that consumers remain focused on deals and value-driven purchases, driven by ongoing economic pressures. She noted, “We believe that while consumers are mindful of their spending, they’re still willing to invest in high-ticket items when they find value or innovative technology.”