Whoever first uttered the phrase "shop 'til you drop" may not have foreseen the days of online shopping. Today, many shoppers cannot fathom making a purchase without first researching the product online. This is especially true for CE products.

According to the joint CEA and Yahoo! study Understanding How Consumers Use the Internet to Research and Shop for CE Products, Internet research influences 77 percent of CE purchases. The study explored the path to purchase for five key CE products: cell phones, computers, digital cameras, portable digital music players and televisions. Using these five products as a proxy for all product categories yields an astounding $100 billion in 2006 CE sales influenced, partly by Internet research.

Most CE purchases are planned and researched (61 percent), meaning at least one week passes from when a shopper becomes interested in a product and the purchase actually occurs. Men and women spend roughly the same amount of time conducting pre-purchase research. A positive correlation also exists between the cost of the item and the amount of time spent researching. For example, consumers spent an average of 15 hours of online research for a television purchase compared to nine hours for a cell phone.

CE shoppers use an average of six different sources (i.e. retail store staff, friends and family and Internet research) to guide their purchase decision and each product category has its own unique pattern of research.

The data suggests that for products in the early stages of the product lifecycle (e.g. HDTV television or portable digital music players), consumers rely slightly more on retailer websites. Conversely, for more mature product categories with a high degree of replacement and upgrade purchases, consumers tend to rate manufacturer websites as a slightly more important component of their pre-purchase research.

Consumers who want to upgrade often want more advanced, feature-rich models and more detailed pre-purchase information. 

When beginning the research process, the greatest percentage of consumers turns to online search engines.  Casting the widest net possible, shoppers seek to get a feel for the range of brands they may consider.

When using a search engine, 66 percent of shoppers report typing a generic product term such as MP3 player, plasma TV or cell phone. A smaller percent (33 percent) entered a specific brand, while others (6 percent) typed a specific product attribute, such as 10x optical zoom.

This tells manufacturers and retailers that as much as they may like to think consumers seek out their brand, in reality, most shoppers begin the process with an open mind.

Consequently, small or unknown brands benefit from consumers' willingness to consider a range of brands beyond just the market leaders, a situation that may not exist without the many product research options readily available to shoppers.

Top reasons to visit a manufacturer website:

• To look up product features and,
• To learn about the newest models.

Top reasons to visit a retailer website:

• To compare prices and,
• To compare different brands.

Despite the obvious importance of an online presence, the Internet is just one component of the shopping experience.  Manufacturers and retailers that most effectively and efficiently reach their customers in a variety of channels will be best positioned to succeed. 

The CEA/Yahoo! study Understanding How Consumers Use the Internet to Research and Shop for CE Products was fielded in October 2006. An executive summary is available free to CEA member companies at www.CE.org. V

By Tim Herbert
January/February 2007