Consumer Electronics Remain an Offline Buy

Consumers won’t be flocking to the Web to buy those big-screen TVs and fancy surround systems this holiday season, according to a survey by cPulse.

Consumers’ likelihood of purchasing consumer electronics online is falling and defection is high. In June, approximately 25 percent of online consumer electronics shoppers interviewed said they were very likely to purchase from that particular site in the future. This number fell to just under 18 percent in September, cPulse found. Nearly 34 percent of consumer electronics site visitors qualified as defecting customers, versus just 17 percent of all commerce shoppers.

“We’ve seen everyone from brand name manufacturers to well-known retailers to unknown dot-com start-ups make a play for market share in the online consumer electronics industry,” said Jody Dodson, cPulse executive vice president. “Unfortunately many of these e-tailers forgot what sells consumer electronics. It’s customer support, both before and after the sale.”

According to the survey, customer support is the single most under-delivered attribute for consumer electronics retailers. More than 50 percent of the 1,115 consumer electronics shoppers surveyed during the third quarter of 2000 said they were extremely dissatisfied with the level of customer support received from these sites. Put into perspective, only 27 percent of online shoppers were dissatisfied with the customer support at non-consumer electronics sites.

“The average Internet consumer isn’t ready to make a high risk purchase unless the appropriate levels of support and product knowledge are provided,” said cPulse analyst Michael Hochster. “Consumer electronics clearly fit the bill of a ‘high risk’ purchase; they’re expensive, they’re consumed over several years, they require a high degree of specialized knowledge to understand, and they’re very visible to one’s peers.”

A great deal of electronics-related merchandise is considered to be among the “hot” purchases this holiday season. According to NPD INTELECT, plasma flat-panel screen TV was the fastest growing product in the technology category. Although unit sales remain relatively low, purchasing shot up 263 percent from January to October 2000 compared to the same time period last year. And sales are increasing even as average price has increased to more than $12,000. PC cameras, PDAs, DVD players, and digital still cameras have all seen growth of more than 100 percent in the first 10 months of 2000 compared to the same time period last year.

According to the Consumer Electronics Association (CEA), nearly seven in ten adults, or approximately 69 million US households, plan to visit an electronics retailer when shopping for gifts this holiday season. The CEA also estimates that one-third of all adult consumers expect to purchase a gift over the Internet during this holiday season, and the number of online gift buyers will increase by roughly 55 percent over the 1999 holiday season.

Among those shopping online, most expect to shop at larger, established e-tailers such as Amazon.com, eBay and Yahoo. However, while some consumers have an idea of where they’ll do their online shopping, many buyers will opt for a broad search strategy utilizing index sites that link to a variety of e-tailers.