Black Friday is just around the corner, and U.S. retailers are preparing for the onslaught of day-after-Thanksgiving shoppers that marks the unofficial beginning of the holiday shopping season. Many experts believe that Americans will be more thoughtful about their holiday spending due to looming economic concerns such as the downturn in the housing market and increased energy costs, which will force stores to lower prices to compete with discount retailers.
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If retailers engage in price wars and shoppers can find the same quality products for seemingly equal prices at most stores, what will be the deciding factor for customers when they choose where to spend their money? When it comes to shopping for consumer electronics -- a bright spot in the current retail industry -- a recent Gallup Panel study finds that Americans will go where they can get the best help: stores with knowledgeable and courteous employees.
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The National Retail Federation (NRF) forecasts a 4% rise in holiday shopping sales compared to 2006, which would qualify as the slowest holiday sales growth in five years. However, consumer electronics rank high atop Americans' wish lists: The Consumer Electronics Association forecasts a 7% increase in electronics shopping this holiday season. Gallup's survey of Americans' behaviors and preferences when shopping for consumer electronics finds that 7 in 10 Americans say they shopped for consumer electronics items in the past year, with one-quarter of respondents reporting that they shopped for these items in the past month. Using a scale of 1 to 5, with 1 meaning "not at all important" and 5 meaning "extremely important," those who shopped for electronics in the past year rated the importance of 20 different factors in deciding where they will shop for electronics.
. . . the best product
As the hordes of anxious shoppers that will line up outside the nation's retailers the day after Thanksgiving would surely attest, Americans consider the quality of a store's merchandise an extremely important factor when deciding where to shop for electronics. Specifically, 67% of Americans say the quality of merchandise is "extremely important" when deciding where they will buy electronics. Additionally, stores need to have what shoppers want; half of respondents say the store's ability to have merchandise in stock is extremely important to their decision about where to shop.
. . . at the best price
Americans are likely to keep another kind of list next to their holiday wish list -- a budget. Sixty percent of the public says that value for the price is an extremely important factor when deciding where to shop for electronics, making price the second most important factor for Americans when buying electronics.
NRF President and CEO Tracy Mullin recently said, "Shoppers will be a little more conservative with their spending as they become more aware of softness in the economy. It is safe to say that many retailers will be competing on price, causing this holiday season to be very promotional -- a tremendous win for consumers." This is good news for consumers who are shopping for electronics, as one-third of Americans say promotions and sales are extremely important factors when determining where to shop for new technology.
. . . from the best people
In October, Wal-Mart unveiled an aggressive cost-cutting strategy aimed at lowering the price of items such as popular toys, electronics, home items, and even food. If other retailers follow suit -- as suggested by the NRF and other industry groups -- and price levels and merchandise selections are somewhat equal across retailers, then how will consumers differentiate among stores? For Americans purchasing electronics, it will be the people in the aisles and at the cash registers.
Aside from merchandise quality, availability, and price value, Americans place the most importance on a store's employees when deciding where to shop for electronics:
- Who will be able to explain the difference between LCD and plasma televisions to the consumer in a way that makes sense? About half of electronics consumers say that employees' knowledge is extremely important when they decide where to shop for new devices.
- Who will take the time to decode a list of acronyms plastered on the side of a shopper's new computer without making them feel stupid? Nearly half of shoppers say the helpfulness of a store's employees is extremely important when deciding where to shop for electronics.
Additionally, about 40% of electronics consumers say both the courtesy of a store's employees and the retailer's ability to provide personal solutions for consumers' technology needs are extremely important. This is especially true when comparing Americans' preferences by age: older electronics consumers are more likely than their younger counterparts to place extreme importance on the knowledge, helpfulness, and courtesy of a store's employees.
What does this mean for the nation's electronics retailers? Forecasts show that Americans will spend more money on holiday shopping this year than last, but also that this will be one of the slowest holiday shopping seasons in recent history. And, consumers will be more guarded with their budgets. But Americans want electronics, and retailers need to stock quality merchandise and drive prices down with increased promotions and sales. With prices and availability being equal, electronics retailers can survive this holiday shopping season by hiring knowledgeable, helpful, and courteous employees and by providing personal solutions to consumers' electronics needs.