We continue to monitor US consumer behavior in real-time using non-traditional datasets as the domestic economy reopens. This has enabled us to call the end of 2020’s massive tech hardware upgrade cycle and show how Americans are enjoying outside experiences but still close to home rather than lots of traveling as was originally assumed would be the case. It’s also helped us identify certain pandemic behaviors that have stuck. Today we have an update on these trends using Google search volumes as a leading indicator of demand.
Here’s what we found:
#1: US searches for “Macbook” (blue), “Laptop” (red) and “iPad” (yellow) since the start of 2019:
- Interest in these electronics typically reaches its annual peak the weeks of Black Friday and Christmas.
- 2020 was an exception, as searches picked up after lockdowns in March/April and again last August amid back-to-school shopping.
- Despite heightened demand throughout last year given virtual work and schooling needs, queries over Holiday 2020 slightly exceeded the prior year.
- Searches for “Macbook”, “Laptop” and “iPad” continue to trend lower this year and currently stand just above their 2-year lows.
Takeaway: the pandemic spurred a huge tech upgrade cycle, but the bulk of these purchases are likely in the past for at least a few years given that laptops and tablets are expensive durable goods. We don’t think Holiday 2021 will be a bust, but it’s tough to make a case for tech hardware sales soundly beating last year given the volume of demand that was pulled forward by the pandemic.
#2: Worldwide searches for “iPhone” over the last 5 years:
- Searches for “iPhone” peak around product announcements in the fall, and also rise again during the holidays (Black Friday and Christmas).
- Queries increased after lockdowns in mid-April, as the blue dot and highlight box show in the middle/right of the chart. Searches stayed elevated thereafter until the next product announcements in the fall of 2020 and through the holidays.
- Searches are now almost back to 5-year lows.
Takeaway: we use searches for “iPhone” as a proxy for the global tech upgrade cycle given that its name is universal, and an iPhone is often a substitute for a computer in emerging economies. The global public health crisis created more demand for iPhones around the world last year, but interest has returned to below pre-pandemic levels. That’s despite many developed and emerging economies increasingly struggling with aggressive variants of the virus. As with tech hardware sales in the US, many users bought iPhones during lockdowns in 2020 which will make for tough comps over the 1-2 years to come.
#3: US searches for the popular online streaming service that begins with “N” (blue) and “Restaurant” (red) over the last 5 years (our email system doesn’t let us spell out the streaming service for spam prevention purposes):
- Searches for “restaurant” usually outnumber those for NFLX, but the two quickly moved in oppositive directions to the benefit of NFLX after shutdowns in mid-March 2020 (marked by the highlight box in the chart below).
- Queries for NFLX continued to mostly exceed those for “restaurant” throughout the rest of last year, particularly as the virus outlook worsened in September 2020. The streaming service also gained more attention over the Holidays per usual.
- Searches for “restaurant” started outpacing those for NFLX again over this past Valentine’s Day and have continued to diverge since as the US economy increasingly reopens.
- NFLX searches have hovered just above their 5-year lows since early March, while those for “restaurant” are around their 5-year highs.
Takeaway: Americans are focused on getting out of the house to enjoy their favorite local restaurants again and reconnecting with friends, leaving less time for consuming content.
#4: US searches for gaming streaming platform “Twitch” (blue) and gaming chat app “Discord” (red) since the start of 2019:
- Queries for “Twitch” and “Discord” picked up noticeably from mid-March into April 2020 after shutdowns, as shown by the highlight box in the middle of the chart below.
- Searches for “Discord” peaked in late September 2020 amid renewed concerns about the virus. Even still, they have remained elevated since the pandemic commenced, and are currently even above levels reached right after lockdowns last year.
- Searches for “Twitch” have trended lower this year, but still best pre-pandemic levels.
Takeaway: gaming took off last year during lockdowns as people were stuck in their homes with little to do, but this is one pandemic behavior that’s holding on to most of its gains despite the US economy reopening.
Three takeaways from this data:
#1: Tech stocks have served as a safe haven throughout the pandemic given that these companies enable remote life, but the last 18 months clearly pulled forward future demand for hardware products. With concerns about virus variants on the rise, tech stocks could benefit from another modest wave of this activity, but Google searches show momentum is not on their side. We’ll be paying close attention to these trends amid back-to-school shopping over the next month as an early indictor for Holiday 2021. Of course, major tech companies are shifting much of their focus to services, but we do expect weakness in their hardware categories especially until the holidays given tough comps to 2020.
#2: Americans are behaving differently this Summer than markets expected at the start of this year, traveling less than anticipated and venturing out more locally. During the pandemic, there was a forced shift in consumer spending to large, public companies (i.e. online delivery from Amazon or home improvement purchases from Home Depot, etc.). But now, many of the establishments being frequented by US consumers (i.e. restaurants and bars) are small private companies, so there’s some reversion to the mean happening back in small businesses’ favor. At the margin, this is not as supportive of public equities as last year.
#3: Earlier this week, Nick highlighted how US ecommerce is holding on to about half its pandemic share gains despite most physical stores reopening. Gaming is another area that’s held on to most of the marginal usage increase from the pandemic even as Americans venture more out of their homes. Perhaps this will decline as most Americans have to return to the office this fall as commuting soaks up more time, but no doubt the pandemic accelerated the long-term growth of this industry.