Report: Canadian Appliance Buyers Lack Brand Loyalty
Nov 20, 2009
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Flexible pricing has emerged as the key influencer of purchasing behaviour in the Canadian domestic appliance market. According to The Major Domestic Appliance Market Monitor, a study conducted by The NPD Group, the majority of Canadians report purchasing below the listed sales price in most major appliance categories, with half purchasing at sale price and two out of ten purchasing at a negotiated, reduced price.
"Given that appliances typically represent a major household purchase, it is no surprise that pricing acts as a major retail driver," said Pam Wood, Senior Manager, Home, The NPD Group. "It was interesting to learn, however, just how many people are negotiating a price discount and how little brand differentiation exists in the home appliance category."
The study identifies three additional key purchasing influencers, including product features, persuasive sales staff and online research. Nearly six out of 10 Canadians cite features as an important reason for selecting a particular appliance and consumers were twice as likely (44%) to rely on knowledgeable sales staff than any other information source when selecting an appliance. Furthermore, four in 10 consumers reported consulting at least one online information source prior to shopping for appliances (retailer websites: 21%; manufacturer websites: 18%).
With the upward trend for open-concept, main-floor living spaces, consumers are increasingly looking to appliances that add to the overall interior design of their homes. Innovative feature sets, form factors, and finishes are becoming ever more important in the appliance selection process, the report says.
"It’s fair to say that most attention is paid to the new and exciting features and form factors in the higher-priced appliance segments," said Wood. "That being said, a large majority of Canadian consumers continue to purchase appliances in the low-end value segments, so manufacturers should focus on style and innovation across all price segments, not just their luxury lines."
Given the importance of online resources and the skills of in-store sales staff, the report said it is critical for manufacturers and retailers to ensure their websites offer lay people a thorough and visually rich brand perspective and exceptionally well trained and informed sales staff.
Additional report findings include:
• By channel, department and furniture/appliance stores accounted for nearly half (47%) of all reported appliance purchases
• The appliance business in Canada is fairly streamlined with the top 10 retailers accounting for approximately two-thirds of the market (64%)
• Energy Star certification is no longer a significant point of discrimination – it has become a staple in appliance purchases
• Extended warranties are most important to younger consumers (18-34 years old) and offer retailers an opportunity to increase transaction values
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