Consumers choose price over customer service or loyalty on electrical goods: Survey

Price is more important than customer service or loyalty for consumers looking to purchase appliances from electrical or department stores, a Roy Morgan survey released this week has found.

The results contrast to an earlier survey from 2011 that showed online shoppers value customer service options and reputation above price and are willing to pay more if they feel they will be getting a good deal overall.

The latest survey, conducted between July 2013 and June 2014, asked 16,809 consumers about the most important factors in their purchasing decision.

It found price was the key factor for 72% of consumers, ahead of the range of products offered (60%), the range of brands (50%), the warranty offered (33%) and store location (42%).

Likewise, factors relating to shopping experience, such as customer service (52%), past experience with a store (44%), product knowledge (42%) and store environment (17%), matter to fewer consumers than price.

Meanwhile interest-free terms, rebates or “club member” offers do little to persuade consumers and were considered an important feature to just 17%, 5% and 3% of consumers respectively.

The survey also broke down the different expectations of Gen Z (born 1991-2005), Gen Y (1976-1990), Gen X (1961-1975), baby boomers (1946-1960), and pre-boomers (before 1946).

For each generation, price was the dominant factor, although by how much varied between age brackets. It is a more important deciding factor for Gen Y (78%) and Gen X (76%), but was less important for Gen Z (71%), baby boomers (70%) or pre-boomers (60%).

Meanwhile, the range of products is more important than service for almost every generation except for among pre-boomers, who rank service as the more important factor (56% to 55%).

In a statement, Roy Morgan Research general manager of consumer products Geoffrey Smith said the subtle variations in expectations from customers of different ages allows electrical appliance retailers to tailor their marketing accordingly.

“The Boomer generations and Gen X are more likely than Gens Y and Z to value service; in fact, Gen Z don’t seem to be overly concerned about anything except price. Of course, at their young age, they wouldn’t have had cause to buy many appliances,” Smith says.

Kogan.com executive director David Shafer told SmartCompany brands are becoming less important in electrical retail. Instead, components of products are becoming more important to consumers.

“There’s no doubt that price is important. The best marketing we’ve ever done is the world’s best price, and when we lead the market on price, shoppers come flocking,” Shafer says.

“However, when it comes to shopping for appliances, Australians aren’t just concerned with price, but how much value they can get for their money. Shoppers don’t just want the cheapest Stand Mixer. Shoppers are looking at the specifications, to make the final decision.”

“Technology has become commoditised and any savvy consumer can read reviews online from thousands of other customers who have bought a specific product thought of it.”

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