A new report from The NPD Group examines consumers’ attitudes towards club and discount retailers
Heading to the nearest electronic specialty store for a new TV, computer, or camera may have been the norm for a long time, but the times, and the retail channels, are a-changing. According to a new report from The NPD Group, Clubs and Mass: Tech Consumers Change Channels, increasing numbers of consumers are exploring warehouse clubs and discount stores as viable options for making CE purchases, but not for all CE purchases.
While there is a willingness to shop at discount and warehouse clubs, actual purchasing still remains low. Among the 34 percent of consumers who said they shopped at a discount store over the past 12 months, only 23 percent actually bought something. And of the 14 percent who shopped at a warehouse club, only 10 percent made a purchase.
Most consumers are purchasing lower-end CE products at warehouse clubs and discount stores. According to the report, the highest instances of CE purchases at discount stores were for CE items selling for less than $200 and digital cameras selling for less than $400 (17 and 14 percent). Higher-end products, such as TVs and computers were under 10 percent. All CE purchases at warehouse clubs, higher and lower-end, were under 10 percent.
Consumers purchasing lower-end CE products isn’t a result of not trusting the brands being sold at clubs and discount stores. According to the report, 58 percent of consumers surveyed agreed that warehouse clubs offered trusted brands at a good price, the number rose to 65 percent for discount stores. Only a quarter of the consumers surveyed expressed concerns that the brand name products being sold through these channels were inferior models or of lesser quality.
So why aren’t the browsers becoming buyers? According to Stephen Baker, vice president of industry analysis for The NPD Group, the two biggest reasons are lack of service and a dearth of knowledgeable sales people.
“Consumers have confidence in the products being sold, just not in the people selling them,” said Baker. “But buying through these channels is a trade-off between low prices and low levels of service. As products get more complicated and interconnected, getting good, reliable customer service is going to outweigh getting lower prices for some consumers. But for others, having the recognized and trusted brands found at clubs and discount stores are appealing as replacement products, second devices for the homes, and lower-priced alternatives to some of the products found at electronic specialty stores.”
Methodology
A nationally representative sample of more than 1300 consumers was surveyed between June 18 and June 27, 2007 about their consumer electronics purchases over the past 12 months. Some of the consumers surveyed were pre-identified as having made a CE purchase in the past 12 months.
About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,600 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, visit http://www.npd.com/.