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CE Consumers Reluctant to Buy Online

15 Sep, 2011 By: Erik Gruenwedel

A new study from The NPD Group indicates majority consumers browse online and buy in stores for major consumer electronics, including TVs, smartphones, tablets and Blu-ray Disc players

With state governments eyeing adopting sales taxes on Internet purchases, new data from The NPD Group found that 76% of consumers use the Internet to browse consumer electronic purchases but still purchase items from stores.

Televisions ranked the fourth-most researched CE product online (56%) but the least likely to be purchased online (19%), according to a survey of 1,326 NPD panelists conducted in June. By comparison, 66% of respondents said they research computer and software purchases online and 34% said they would purchase the products online.

“It’s not surprising to see that so many consumers won’t buy TVs, smartphones and other popular CE products online, despite using the Internet to perform basic product research,” said Stephen Baker, VP of industry analysis for NPD. “Computers and other IT products have a much longer history online with a wider variety of outlets, including direct sales from manufacturers, for consumers to choose from.”

After TVs, CE products least likely to be purchased online include home audio (20%), Blu-ray Disc players and camcorders (21%), smartphones (23%), printers (24%), tablets (29%), computer accessories and digital cameras (30%), and eReaders (32%).

Baker said reluctance among consumers to purchase CE products online could be due to a lack of awareness, slow response by retailers to establish direct-to-consumer purchase platforms or inherent technical aspects of the product.

“Whatever the cause, the result is a badly skewed online sales mix that relies heavily on a narrow range of products, and one that doesn’t adequately address some of the more exciting growth opportunities,” Baker said.

Indeed, Best Buy Co. said melding the retail and online shopping experience into a multichannel platform is a priority going forward in the current economic climate. The CE retailer said 40% of online purchases in the second quarter were picked up in stores. Online sales in the quarter increased 13%.

“This world isn't moving to a place where it's digital all by itself or physical all by itself,” Dunn said in a Sept. 13 call with analysts. “Neither alone will be sufficient. What we firmly … believe is that where those things come together in multichannel — where the customer needs you to be [and] wants you to be — is the winning proposition for us and for our shareholders.”


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