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Inflation and Audio Device Report

Prepared by:

Noa Shachaff

Head of Consumer Insights & Analytics, Revuze

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Overview

In the last year, there’s been a significant increase in inflation and prices, while wages have remained relatively stable. This has had a notable impact on consumer shopping habits, which we decided to investigate further. Our research focused on the audio devices industry and uncovered some intriguing connections between inflation and consumer behavior. In this report, we’ll explore these findings in detail and discuss the implications for your brand, as well as provide recommendations on how to navigate this evolving market.

Background

Due to the ongoing supply chain crisis caused by the COVID-19 pandemic and other geopolitical factors, the global economy has undergone significant changes. One of the major consequences has been the sharp rise in inflation rates, with US inflation rates growing from 7.5% in January 2022 to a peak of 9.1% in June 2022, and steadily declining to 6.4% by the start of 2023.

As a result, consumers’ disposable income and household budgets have been significantly impacted, leading to a cost of living crisis. In this new economic reality, consumers are placing greater emphasis on pricing and value for money when shopping for products, including audio devices.

In the audio devices industry, rising prices have had an interesting effect, even retroactively affecting consumers’ satisfaction with products purchased in the past. How else has inflation had an impact?

US | Monthly Inflation Rates

US inflation rates started at 7.5% in Jan’2022 and reached a peak of 9.1% in Jun’2022. Following this peak, inflation rates began to steadily decline, ultimately reaching 6% at the start of 2023.

Methodology

In this original research study, we’ve examined how these circumstances have affected consumer behavior, specifically within the audio devices ecommerce industry.

We collected and analyzed over 170,000 online reviews of audio devices from major online retailers, including:

Walmart
Amazon
Best Buy
Target

Product categories we looked into include:

Speaker
Wired Ear/Headphone
Wireless Ear/Headphones

How we analyzed our data?

We used Revuze’s AI technology to analyze our data by specific topics. Because our focus is on how inflation and the cost of living crisis affected consumers’ behavior, we looked at two main data points: Price and Value for Money (VFM).
3 Volume 88% 1961 We also examined sentiment for this category, analyzing if people are satisfied or dissatisfied with the price/VFM the product they are reviewing provides.
We looked at these metrics for each month of our analysis period, looking for correlations with inflation.

This is what we found.

Sentiment main findings

In the following section, we’ll explore correlations between inflation rates and audio device sentiment. A positive correlation tells us customers are delighted with the price/VFM these products offer, while a negative one tells us the opposite.

Sentiment for audio devices correlated negatively with inflation (-0.52)

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Download the Audio Device and Inflation Report to Explore Shifting Consumer Behavior

Sentiment for Speakers correlated negatively with inflation (-0.64)

Sentiment for Wired Ear/ Headphones correlated neutrally with inflation (0.00)

Sentiment for Wireless Ear/ Headphones correlated negatively with inflation (-0.56)

Inflation and Audio Devices An In Depth Look at the US Audio Devices Industry pdf

Discussion

As may be expected, we saw strong negative correlation between inflation and sentiment for price/VFM. This means that, as inflation rose, consumers were less satisfied with the audio devices’ price and value for the money. It can be understood that, as they had less disposable income, consumers have become more cost-conscious, making them more critical of products they see as expensive.

This can clearly be seen in consumer discussions. In reviews of audio devices during this period, we found two trends. First, consumers mention inflation is driving them to downgrade from the more expensive products they’d prefer to buy to cheaper ones. Second, consumers are going back and changing previous reviews upon seeing that the price of a product was raised.

Let’s discuss what this might mean for companies selling audio devices.

How inflation changed audio device shoppers’ behavior

Audio devices, like speakers and headphones, are often on the more expensive side. As inflation leads to consumers keeping a tighter grip on their wallets, expectations of the products that they do buy get higher. Consumers want to feel like they are getting their hard-earned dollar’s worth, and will express disappointment if they do not feel this is the case. For this reason, sentiment for multiple audio devices has decreased as inflation increased.

It’s also important to note that consumers are very aware of inflation, and price and VFM are top of mind.

Their reviews explicitly reference inflation as a reason for having to opt for cheaper devices than they may typically prefer.

Strong feelings about the VFM of audio devices has even led consumers to go back and change their minds about a product in retrospect. Something that they may have once considered to be worth the price is no longer seen as such when said price goes up.

For footwear sellers, this points to a few important takeaways.

Using data to keep your finger on the pulse

Understanding consumer behavior and the factors that influence it is essential for businesses to make informed decisions about pricing, product development, and marketing. As consumer needs and budgets change, businesses must commit to ongoing data-based industry analysis to stay up-todate and maintain their market share.

To gain valuable insights into customer experience, satisfaction, and needs, companies can leverage various sources of data, including online reviews. By analyzing this data, businesses can better understand what consumers want, not just for their product but for the entire market, giving them a competitive edge in a constantly evolving landscape.

In today’s rapidly changing business environment, getting a hold of this data is more crucial than ever. By staying curious and connected to data, businesses can make informed, datadriven decisions to navigate the uncertainties of the market and stay ahead of the competition.

About Revuze

Revuze works with Fortune 500 companies and brands worldwide to provide valuable insights into consumer analytics. Revuze’s powerful AI can analyze online customer reviews and other user-generated data in any industry.

It can then detect industry-specific lingo and sentiment expressions to help companies learn about their customers, their competition, and new market trends.

It’s all in real-time, with easy-to-read reports, and minimal hassle.

Key Objectives

Industry

Home Electronics

Sources

Walmart, Amazon, Best Buy, and Target

Time Period

January 2022 to February 2023

Voice of Customer Data Points

170,000

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