The retail mantra "Know thy customer" is assuming an added urgency this season given the sudden sales slump reported by leading CE specialty chains.
And as if on cue, a flurry of new consumer studies recently have been released by the Consumer Electronics Association (CEA), Sears, and Vertis, a marketing/advertising agency, that can help dealers gain greater insights into the likes, dislikes and shopping habits of their customers.
Unfortunately, ranking high on consumers' list of dislikes, according to CEA's Consumer Education survey, is CE dealers themselves. Or, more specifically, their sales staffs.
Only 15 percent of respondents (a representative online sample of 900 U.S. adults queried this past June) said they "completely or somewhat trust" store salespeople. This lack of trust contributes to consumers' reluctance to seek out a sales associate to help with their final purchase decision. Indeed, only a third (33 percent) said they do so.
Where then do consumers turn for advice if not to the retailer? According to the CEA study, the overwhelming majority (84 percent) relies on recommendations from friends or family members who own the product, while 39 percent look to the manufacturer.
Besides asking owners and vendors for information about quality, performance and features, shoppers are also searching the Web for insights into CE products. In its latest biannual Customer Focus Retail survey for CE, Baltimore-based Vertis, a marketing and advertising agency, found that while 39 percent of 3,000 adults queried will research products on the Internet before buying them in a store, significantly more conduct Web research when shopping for CE.
Specifically, the number of adults who use this technique soars to 62 percent of those planning an MP3 player purchase, 53 percent for those shopping for home theater systems and 49 percent of potential HDTV or DTV buyers.
The Internet also appears to be the preferred research method of men. According to a just-completed Sears-commissioned survey dubbed "Techs" In the City, 71 percent of male respondents cited the Web when asked how they research/learn about consumer electronics prior to purchase, while the most popular answer given by women (62 percent) was sale announcements and browsing stores.
The Sears study also found that product quality was considered the most important factor when purchasing a home theater system (67 percent), while cost, at 47 percent, remains a key factor in the decision.
Brand name also continues to be an important consideration for CE shoppers, Vertis said, although its ability to influence a purchase has fallen from a high of 50 percent in 1998 (the first year that the Customer Focus survey was conducted) to 47 percent in 2002.
And, while consumers rely on other sources to guide their final purchase decision, they do view sales associates as a knowledgeable source for product information, particularly women. According to Vertis, 43 percent of women surveyed consider a salesperson's knowledge "very important," although 22 percent of men indicated that it is "not very important at all."
Salespeople ranked somewhat higher within the CEA study as a source of product information. According to the results, almost half of respondents say they consult sales associates when researching a particular product. Interestingly, staffers at computer stores and high-end CE stores rank high among sales people considered to be "very or somewhat knowledgeable," at 87 percent and 84 percent, respectively, based on consumer perceptions.
Nevertheless, most consumers (68 percent) have already made up their minds about which brands and models they're going to purchase long before entering the store, making it difficult for retailers to influence product choice. Observed CEA senior industry analyst Sean Wargo, "Consumers weigh a variety of factors when determining where they will shop and what they will buy. In that environment, the key for the retailer is simply getting the consumer into the store."
But if retailers are finding it difficult to influence final purchase decisions, how can they influence consumers' choice of retailer? Said Wargo, "[Our] survey reveals just how important it is to balance pricing and a positive retail environment with friendly sales staff and strong return policies in order to gain and maintain loyal customers."
Indeed, while respondents to the CEA survey said that having the lowest price is the most important factor in choosing a retailer, participants also consider past experiences (83 percent), product variety (83 percent) and return policies (82 percent) when determining where to purchase consumer electronics products.
Consumers also look to retailers for an available and friendly sales staff, with an overwhelming majority of respondents saying they consider these two qualities to be important factors when choosing a retailer (75 percent and 70 percent, respectively). What's more, 59 percent said they rely upon retail staff for getting help with locating product in the store.
Advertising also exerts a major influence over where people shop. According to the CEA survey, 78 percent said that once they are ready to buy, they would go to a store that has advertised a desired product.
Vertis' Customer Focus study broke it down even finer: 54 percent of its respondents said they use advertising inserts to decide where to do their CE shopping, and of those, 89 percent said that they compare circulars for price. In addition, 72 percent of that group said they would use ad inserts to decide where to shop for home theater systems.
The Vertis report also found that men are more likely to use circulars to decide where to shop for consumer electronics (58 percent of males vs. 54 percent of total adults).
Additionally, while the majority of adults (78 percent) say they read every store's ad inserts before deciding where to shop, 26 percent of Gen-Y men say they only read the circulars of the CE store they shop regularly, vs. 22 percent of the total adults.
Speaking of gender and generational divisions, Vertis' Customer Focus survey found a substantially larger percentage of Gen-X and Gen-Y males plan to purchase home electronics within the next year. While only 9 percent of total adults planned to purchase DTVs, for example, that number doubled to 18 percent among Gen-Y men.
Similarly, 6 percent of total adults indicated that they planned to buy a home theater system, compared to 15 percent of Gen-Y men. And while 17 percent of total adults said they plan to purchase DVD players, that number rose to 28 percent for Gen-X males, 27 percent for Gen-Y males and 24 percent for male Baby Boomers.
The complete CE Consumer Education study is available free to CEA member companies, or can be purchased for $499 by visiting www.eBrain.org. For more information on Vertis' Customer Focus 2002 CE report, visit www.vertisinc.com.
Factors Influencing Choice of Dealer*
Advertised desired product
Available sales staff
Friendly sales staff
Factors Influencing CE Purchases*
Product available at time of purchase
Helpful, knowledgeable sales staff
Special financing offers