12 March 2008
TORONTO — Canadians in the market for home durables products are visiting a greater number of retailers before deciding where to buy, according to recent results from global market research company Synovate and its Household Equipment Canada (HEC) survey. The proportion of consumers that say they shop two or more retailers before making a home durables purchase has increased 17 percentage points over the past few years.
On average, for all 180+ individual home durables products tracked by Synovate in Canada, 42% of consumer purchases in 2005 were made after comparison shopping two or more separate retailers. By 2007, the overall level of cross-shopping had grown to 59% for all home durables.
So which home durables products do Canadians cross-shop the most? Of the 13 overall categories defined in the study, the top five for comparison shopping are:
- Major Appliances
- Baby/Infant Products
- Floor Care/Vacuums
- Small Appliances
- Computer Products
In the most cross-shopped overall category, Major Appliances, 73% of purchases in 2007 occurred after the consumer had visited two or more retailers. Likewise, 71% of Baby/Infant Products purchases, such as Cribs and Strollers, involved cross-shopping at least a few different stores. This was closely followed by Floor Care/Vacuums purchases (70%). These three overall categories were significantly higher than the total cross-shopping average of 59% for the entire home durables market.
"The large number of retail stores and close proximity, especially in major urban centres, makes it increasingly easy for consumers to comparison shop," commented Adrian Murphy, Vice President of Syndicated Research at Synovate. "Added to this is the highly competitive brand space in categories such as Major Appliances and Baby/Infant Products, ensuring that shoppers have plenty of options to choose from when making a purchase decision."
To understand why Canadians cross-shop, Synovate asked what motivated them to reject a specific retailer and look elsewhere - price and product were key factors cited. For instance, while average expenditure for a Full Size Refrigerator is close to C$960, there are some units that cost significantly more, depending on specific feature-set. This encourages consumers to spend more time understanding the product and do additional research before spending a large sum of money.
With consumers devoting more effort to researching products and comparing store offerings, including brand selection, retailers are finding it harder to close the sale. With Full Size Refrigerators, for instance, Major Department Stores accounted for the largest proportion (58%) of would-be purchasers in 2007 - this is fairly consistent with figures over the past few years. However the rate at which Major Department Stores are able to close a sale is slightly soft, due to increased retail competition. For example, the Hardware & Home Improvement channel has carved out a notable presence in Major Appliances during the past few years. The recent arrival in Canada of US chain Lowe's could boost the market share for the Hardware & Home Improvement channel if their performance with Major Appliances south of the border is any indication. Similarly while Electronics Stores attracted around 8-in-10 would be Colour TV purchasers last year, the channel converted just 51% into actual sales, down from 60% in 2005.
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