Survey: Online Product Research Continues to Trend Upward
Synchrony Financial’s recent “Major Purchase Consumer Study – Electronics Industry” confirms that consumer behavior is changing. The full 2016 study polled more than 258 electronics shoppers who had made major purchases ($500+) during the preceding six months. Some of the more important findings in the electronics industry category included:
- 88% of major-purchase electronics buyers said they began their shopping journey online
- 70% told us they consulted with friends and family before buying
- 54% said they checked online reviews
- 53% did in-store research
- 41% said they researched financing options
- 69% told us they chose a payment option before buying
- 63% said they made their purchase in-store
The findings themselves are interesting, but the data also reveals important strategic information that may shape electronics retailing in the future. For example, consumers said the first step in their path to a major purchase is online product research, and the percentage of shoppers who started their research online (88%) is up five percentage points over the previous year. Step two in the consumer journey is checking social media and product reviews for product information. This is a change from last year when the second step was identified as a visit to a local store. Visiting a brick-and-mortar store is now identified as the third step on the path to a major purchase, which perhaps indicates a changing shopping approach by consumers.
Increasingly, consumers are doing online research for financing options as part of their shopping process. The 2016 Synchrony survey found that 41% of electronics consumers were exploring financing options prior to purchase, up from 34% just one year ago. Also, 93% of Synchrony cardholders said that promotional financing made their purchase more affordable. Furthermore, cardholders said they spent an average of $393 more per purchase than non-cardholders. These results seem to indicate that promotional financing should be a vital part of modern retail strategy.
A New Generation
Customer relationships in today’s retail environment are not necessarily linear. Nearly everyone has easy access to multiple product information sources on the Internet. Opinions and sales momentum can shift daily based on new data or the latest blog post. E-commerce is a well-established sector of the retail electronics industry and this trend will likely accelerate as we see the next generation of consumers emerge, a generation born after 1990 that has lived their entire lives with almost unlimited online access. The “connected generation” has grown up with the Internet and a smart phone, and they see online research as an important part of the shopping experience. Traditional advertising – TV, print and radio – are only part of the marketing equation these days.
Millions of consumers now go online to find product descriptions, reviews and prices. Once they’ve done their homework, they may purchase the product from an Internet-based seller and have it delivered directly to their home. Or, they may use their knowledge to engage retailers in detailed product discussions and even price negotiations. Baby Boomers and Gen-Xers also have embraced Internet shopping, frequently going into cyberspace as part of their shopping experience.
Embrace Online Tactics
Brick-and-mortar retailers may fear the growing consumer migration to online purchasing. This is clearly a danger for businesses that are not evolving to meet the needs of the 21st Century consumer. While the retail landscape is changing, it does not mean disaster for those retailers who embrace new strategies.
For brick-and-mortar stores, the bad news is that the 2016 Synchrony survey indicated fewer consumers are making purchases at traditional electronics stores. In-store purchases dropped by 12% points from the previous year. But brick-and-mortar retailers can still be an important part of shopping process, and claim their share of sales, by meeting the consumer where they are, and that is typically online.
Here is a look at the typical consumer path to a major purchase:
- Most begin searching online
- Many consult social media for reviews or advice
- More than half will check out products in a local store
- Financing is important in the decision process
- Nearly two-thirds will buy the item in a physical store
Retailers can use this knowledge to shape marketing strategy and tactics to encourage and perhaps channel customers to their store. A good place for retailers to start is a well-designed, frequently updated website that is mobile-device compatible. Many consumers use their smart phones for product research so you want their online shopping experience to be easy and informative, not frustrating. It is also wise to utilize search engine optimization (SEO) techniques to ensure that your site is high on the list for key search-engine terms. If you are unfamiliar with how to do this, consult a web-marketing professional.
Social Media Connection
It’s also helpful to promote your business through social media. Facebook, Twitter, Instagram, Pinterest and other media are visited daily by millions of consumers. But social media is not an advertising forum; it is meant for engagement, conversation and information. Again, it may be helpful to consult an expert in the use of these media. Instead of pushing your products, use social media to make friends and raise awareness of your business. Community involvement and helpful consumer tips can be great ways to create social media buzz.
You can gauge the effectiveness of your online marketing strategies by asking customers what brought them to your store. They may refer to their online experience. If so, this is valuable for gathering feedback about your digital footprint. It also can help shape the in-store sales conversation. A well-trained sales associate can inform the customer of the benefits of buying from a physical store – YOUR store – rather than online.
Your online presence, as well as your traditional advertising, should make clear reference to the financing options available at your store. As the Synchrony study indicated, more than two-thirds – 69% – of major-purchase consumers selected their payment option before making their purchase. A promotional financing offer with monthly payments can be the deal closer for a major sale. Plus, if they have your store card, you may create a valuable repeat customer.
Engage Customers Online
Synchrony Financial’s Major Purchase Consumer survey indicates that consumer behavior has changed over the past five years and the trends we have seen may continue. Creating a thriving retail electronics business requires a strong, frequently updated Internet presence, a smart social media effort, exciting promotional financing offers and a well-trained sales team.
More and more, customers are doing product research online. Meet them there with your message and image. Use digital media and smart strategies to direct them to your store, then engage them face-to-face. Selling is often a matter of creating engagement with your customers, and trust often starts on online.
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Synchrony (NYSE: SYF) is a premier consumer financial services company delivering customized financing programs across key industries including retail, health, auto, travel and home, along with award-winning consumer banking products. With more than $140 billion in sales financed and 80.3 million active accounts, Synchrony brings deep industry expertise, actionable data insights, innovative solutions and differentiated digital experiences to improve the success of every business we serve and the quality of each life we touch. Engage with Synchrony Financial.