Fast Moving Consumer Durables (FMCD)
Consumer durables, aka durable goods, are products that have an average life of 3 years or more, and hence they are not purchased and replaced on a frequent basis by consumers. The opposite of consumer durables are non durable goods, which include fast-moving consumer goods (FMCG) and CPG. What Are Consumer Durables? Consumer durables, also known as durable goods, are a category of consumer goods that do not wear out quickly and therefore do not have to be purchased frequently. They are part of core retail sales data and are considered durable because they last for at least three years, Durable goods derive their name from the fact that they last in value for a relatively long time. An individual’s wealth is preserved by spending a high proportion of their income on durable, investment, or capital goods because the goods retain their economic value for longer periods of time. Investors, business owners, and economists closely monitor expenditures and new orders for consumer durables as a sign of sustainable economic growth. Durable goods consumption leads gross domestic product (GDP) over the business cycle. So, if durable goods is above its consumption trend, then the GDP is also likely to be above its trend in the next quarter Types of Consumer Durables Some examples of consumer durables are large and small appliances, furniture and furnishings, carpets and rugs, rubber tires, lead-acid automotive batteries, consumer electronics, luggage, sporting goods, and household goods. Automobiles, mobile homes, boats, and fine jewelry are also durable goods Consumer Durables vs. Nondurable Goods The basic difference between durable and nondurable goods is that the former last for three years or more, while the latter are used up in fewer than three years. Also, durable goods maintain their economic value much longer than nondurable goods. Durable goods tend to be more expensive than nondurable goods, so people usually invest in them when the economy is good, and they are feeling prosperous. However, this rule of thumb doesn’t always hold—consumer spending on durable goods rose during the COVID-19 pandemic (after a brief but sharp contraction), which battered the economy. Lockdowns and social distancing reduced the demand for services, while government subsidies intended to help people weather the crisis financially increased disposable income FAQs What are Fast Moving Consumer Durables (FMCD)? FMCD refers to consumer durables that have a high turnover rate and are quickly consumed or replaced by consumers. These products are typically non-perishable and have a relatively short lifespan compared to other consumer durables. What Are Some Examples of Consumer Durables? Consumer durables, also known as durable goods, are products that last for three years or more. They include mobile homes, large and small appliances, furniture and furnishings, carpets and rugs, automobiles, rubber tires, lead-acid automotive batteries, boats, consumer electronics, luggage, sporting goods, household goods, and fine jewelry. What factors influence the demand for FMCD? Several factors influence the demand for FMCD including changes in consumer preferences, disposable income levels, technological innovations, marketing strategies, pricing, and overall economic conditions. 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