AI-enabled smartphones are set to be the key growth driver in the UK electricals sector, with sales forecast to rise at more than twice the pace of the wider sector. By offering advanced features and enhancing consumer experiences, these devices will not only accelerate upgrade cycles but also limit the appeal of secondhand platforms like Back Market, according to GlobalData, a leading data and analytics company.
GlobalData’s latest report, “UK Sector Series: Electricals, 2024-2029,” reveals that the mobile phones and landlines sub-category is set to grow at a compound annual growth rate (CAGR) of 5.4% between 2024 and 2029, compared to 2.1% for the electricals sector overall, benefiting from revolutionary new features brought about by AI.
Oliver Maddison, Retail Analyst at GlobalData, comments: “For years, updates to smartphones have been incremental, offering slightly better cameras and moderate changes to UIs with each release, which when combined with the cost-of-living crisis, has prompted consumers to put off replacing their phones. The arrival of AI-powered devices is changing that, with the prospect of circle to search, enhanced photo editing, and conversational AI assistants making consumers more willing to upgrade earlier.”
The newness of AI on the electricals scene has given retailers a new way of competing with the resale market. GlobalData’s How Britain Shops survey* indicates that saving money is the key motivation for purchasing secondhand electricals, cited by 63.7% of respondents.
Maddison continues: “For consumers to consider buying electricals from retailers to be worth the additional cost relative to secondhand, retailers must differentiate their offering in the face of an electricals resale market that is set to outperform the total electricals market out to 2029, with a peak of 6.7% growth in 2026.”
Alongside AI-powered devices, which will be a temporary advantage over resale platforms, electricals retailers are placing greater emphasis on their service offerings to provide additional benefit to consumers and diversify their revenue streams.
Maddison concludes: “We are likely to see more retailers enter the multimedia space; tech giants Amazon and Apple have proved successful in the streaming space, while AO has recently taken a leaf out of Currys’ book and plans to launch a mobile network to rival iD Mobile.”
*GlobalData’s How Britain Shops survey of 9,000 nationally representative UK respondents.
