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NPD: Consumers Skip Big Boxes For IT, Home Theater Installs

4/19/2007 01:53:00 PM Eastern

Port Washington, N.Y. — Despite the growth of Best Buy’s Geek Squad and Circuit City’s firedog support programs, most consumers still turn to manufacturers and independent servicers for help in installing, repairing and maintaining their PCs, home networks and home theater systems.

That’s the word from market research firm The NPD Group, which found that while many consumers may make their initial IT purchases at big-box stores, they are opting to bypass the chains for their support services. According to a new NPD report, “The Consumer Perspective on Warranties, Installations, and Tech Support,” demand for such services is growing as consumer technology products are becoming more advanced and more integrated than ever before.

Installation is a chief area where consumers opted for someone other than the big-box retailers. Of those who purchased installation services for their desktop computers in the past year, 52 percent of the 3,000 consumers queried by NPD between Jan. 22 and Feb. 6 did so from either an independent installer or directly from the manufacturer. Only 27 percent purchased installation services from big-box chains.

Local and independent service providers also made their presence known in the tech support field. Twenty-three percent of consumers surveyed who required tech support for their consumer technology products in the past year said they received it through local or independent shops. Only 12 percent of consumers surveyed said they had used the in-store support services offered by big-box chains.

The top two places consumers turned to when they needed tech support for their home computers, including desktops and notebooks, were independent providers and manufacturers. Thirteen percent of consumers went to a big-box retailer for desktop tech support and 17 percent for notebook tech support. One in four consumers used an independent provider for their home networking tech support needs, far outweighing those who turned to big-box chains.

“Tech support and installation are solid ways to build customer service, branding, and revenue,” said Stephen Baker, NPD’s industry analysis VP. “The big guys are spending big bucks to try and capture service dollars, but consumers remain unconvinced that bigger is better. In many cases they prefer the comfort and personal service that the locally based service providers can offer.”

Big-box retailers did edge out independent installers for flat-panel TV installations, but the independent installers took their fair share of home theater installations, which is a more lucrative market. Twenty-six percent of consumers surveyed used an independent installer for their home theater installation needs, NPD said.

One area that the big box retailers have captured is extended warranty sales. By leveraging their sales strength across major CE products, including TVs, digital cameras and DVD players, the chains have managed to drive warranty sales better than any other channel.

The big-box retailers also lead warranty sales for computers despite trailing in unit share for notebook and desktop sales. Manufacturers captured 41 percent of notebook unit share and 40 percent of desktop unit share but only had 8 percent and 7 percent, respectively, of warranty share, NPD reported.

“You can’t put a price tag on lost time, and because of that consumers are willing to pay to make sure their consumer technology products are working correctly and to their fullest capacity,” Baker said. “Technology plays an even more central role in people’s lives in the digital age. As the devices become more important in a person’s lifestyle the need to keep those devices functioning is as central to the modern home as making sure your plumbing is up to snuff. Consumers are willing to pay the plumber for the service he provides and we are finding that consumers are increasingly more willing to pay the tech guy for services to keep technology products running smoothly.”

For more information contact NPD at (866) 444-1411 or npd@npd.com.

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