e-Tailers Top Consumer Reports Poll
By Alan Wolf -- TWICE, 11/3/2009
Yonkers, N.Y. - Online-only retailers outscored brick-and-mortar stores on price, service and product quality for the second consecutive year in Consumer Reports magazine's annual CE survey.
Respondents ranked Amazon.com, Newegg.com, Beachcamera.com and Vanns.com highest among the CE retailing pack, based on more than 35,000 CE purchases made between January 2008 and June 2009.
Within the brick-and-mortar channel, Costco edged out rival warehouse clubs Sam's and BJ's on price and product quality, while Apple Stores, Ultimate Electronics, Ritz Camera and independent dealers in general scored well on service and product quality, if not price.
Target and Walmart, which trailed in product quality and customer service, placed at the bottom of the list.
The consumer advocacy publication also advised consumers to:
· negotiate prices with retailers, who are more inclined to haggle amid weaker sales;
· eschew an extended warranty; and
· consider multifunctional products like all-in-one printers, IP-capable TVs and Blu-ray players, and digital cameras that can also shoot HD-format video.
The survey results, along with reviews of more than 400 netbook computers, flat-panel TVs, Blu-ray players, headphones, digital cameras and other CE products, appear in Consumer Reports' annual electronics issue, available this week.
Talkback
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For Mr. Smith,
Your points are interesting, and the sales tax issue in particular is a sore subject with me. (If CEDIA had any balls, they would come out in favor of resolving it. Not holding my breath.)
But the "consultant speak" you used to explain it is part of what has gotten this industry neck deep in sheep dip in the first place. Let's go back to basics instead: Manufacturers making products that perform as they are supposed to and carry a reasonable life span, being sold by dealers who have an interest in customer satisfaction, to customers who understand and are comfortable with what they are getting. Notice I did not say "Let's dick people over" anywhere in there. Yet dicking is all this field seems to know how to do these days. And then we wonder why customers are so gun shy about getting screwed. Seeing as they've been routinely screwed for maybe 20 years now, I don't blame them.
The store I work for is a local independent who has actually seen noticeable growth in the last 8 years, even during the recession. In fact, we outgrew our original space and are now preparing to move into a former Tweeter building (thanks, consultants! Without them, that building would not be empty!). And we did it by focusing on those basics. The sad part is, there are not enough dealers like us and the population keeps dropping. Below a certain threshold, and most brands can kiss their profit-sucking asses goodbye. By my entirely unscientific estimation, we are sitting on that limit, and may have already fallen below it.
If this process continues, it will be the customers who ultimately suffer. And considering how much time I've spent in their homes and offices, I can't stand that thought. They deserve better.
Aaron M. - 2009-5-11 00:06:51 EST -
It is entirely possible for B&M retailers to repatriate nearly all of their local sales from etailers and achieve top scores on service and price. But the current practice of bundling the cost of service into the sales price prevents this from happening. B&M retailers foolishly provide free display and advice for online shoppers and this practice must stop or they all will follow Circuit City. Retailers with broad product offerings can package customer services, including pre-sale services, into memberships of compelling value. Customers can opt in or out and have their expectations set accordingly. There are many issues involved in this but the only area for which a competitive solution does not exist is that of local sales tax. And it can be done for 1/100th of the brutal $6000 up front membership payment that a retailer like Direct Buy requires. The retailer can then independently size the warehousing and service operations depending on the proportion of customers opting for full service. This will allow optimum efficiency with service resources going only to paying members. I've looked at the numbers and see no reason why this can't yield adequate gross margins.
Of course consumers won't pay an up front premium for service you've already provided for free and they won't trust you to deliver on a promise to fulfill their future service needs because they doubt you will be there. And if you keep bundling your service overhead into asking prices, they will be right.
Dennis Smith - 2009-4-11 19:07:11 EST -
Comparing brick and mortar to low overhead on line companies is a waste of time. B&M folks are just unpaid servants for on line retailers. Soon everything will be sold on line or by Costco and Wal-Mart. Customers have spoken loud and clear that all they care about is the lowest initial sales price that they can get. That's it. Training, hiring, retention, Service departments, service vans, warranty administrators, etc are overhead that customers will not pay B&M retailers to support even if it means that in many areas around the country there are no reputable repair centers to fix their $2500 TV's.
Sarah Connor - 2009-4-11 13:51:46 EST -
So, by these standards, "Service" apparently means "return policy". Hey, here's a thought- how about I help you find the right product in the first place so you don't need to return it? How about I help you get all the settings configured properly so that you get the performance you paid for? Just because you have picture and sound doesn't mean the system is running properly in even a basic sense. Crazy, I know...
And of course we are more expensive (if you mean we don't sell stuff at below cost). Do you know how much it costs to be Amazon & Newegg's showroom and tech support office, while not getting reimbursed for it? Duh. Not to mention the difficulty in keeping qualified staff, who've been leaving the field in droves at a time when the product is becoming even more complicated and unuseable.
As for TV's and BDP's with IP ability, they must be smoking crack. In practice, that feature set rarely works as advertised and has almost no upgrade path. If anything, the product needs to get simpler. On warranties, they need to rethink that, too, based on the general drop in build quality I've seen over the past 7 years. Or else the brands could go back to building stuff that lasts. Again, me and my crazy ideas......
Every time I turn around, this field digs itself a little deeper into a hole. Good job, guys. A few more years like this, and we'll be standing in the bottom of an Arizona copper mine.
Aaron M. - 2009-4-11 12:17:39 EST
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