Appliance Study Shows Price Tightening Rankings

Best Buy

The housing bust, tight credit and tight wallets have not been kind to the major appliance category, with shipments down 14% through May, per industry data. The fact that retailers are responding with aggressive pricing and other programs to keep customers happy and engaged is reflected in J.D. Power and Associates' 2009 Appliance Retailer Study.

Based on responses from more than 4,200 consumers who purchased a laundry or kitchen appliance within the previous 24 months, the study awarded Best Buy the top score, saying the retailer did especially well in installation service and delivery. Following Best Buy in the rankings is H.H. Gregg, which garnered strong scores for sales staff and price factors. Lowe's was third, doing well in store facility and merchandise factors, per the firm.

In last year's inaugural study, which derives customer satisfaction scores from responses to questions about sales staff, installation service, delivery service, store facility, merchandise and price, Lowe's was number one, followed by H.H. Gregg and then Best Buy.



But the other change versus last year, per Dale Haines, senior director of the real estate and construction practice at the firm, is that the scores this year are much tighter than they were last year, and that price has become even more important to customer satisfaction. He says scores have tightened up because retailers have become much more aggressive on pricing and marketing efforts.

"We are seeing that on the consumer side of things, price [as a component of customer retail satisfaction] has increased in importance," he tells Marketing Daily, adding that price has also become a stronger driver of which appliance brands and retailers consumers choose. He says that is partly due to the fact that there are fewer exclusive-distribution relationships between appliance makers and retailers; thus, because one can buy a major appliance at most major retailers, price is everything. "There are fewer exclusive relationships now versus four or five years ago," says Haines.

Haines says retailers have also embraced the use of in-store Internet kiosks for consumers to comparison-shop. The reason has less to do with proving they are offering the lowest price as with getting the sale done in one visit. "Yes, it's an extension price-match guarantee; but what savvy retailers are finding is that consumers are going to do their homework anyway, so if they can make it more convenient -- make it available to consumers while they are in store, they don't have to wait for a second visit."

He says one result is that per the study, 38% of consumers are buying their appliances at the first visit, up from 32% from last year.

"This year, a high percentage of respondents said they returned to a retailer because they had a positive previous experience there before, regardless of which department they shopped in. "I am inclined to think it's another demonstration of people looking to reduce uncertainty and increase confidence in their purchase," says Haines. "It's minimizing risk by going with a known positive experience. Consumers are being careful."

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