Surveys: Engage now
Consumers can take months to buy
July 11, 2012,
That is strongly suggested by two recent surveys by retail finance providers focusing on home furnishings buying decisions. Among other findings, not surprisingly, are that furniture buying decisions take longer to make than other major purchases.
One of the surveys, by GE Capital Finance, found that consumers now heavily weigh needs versus wants when making major ticket purchases, and for a many of them, 46%, furniture purchases are classified as a need.
That designation underscores that consumers are more careful about spending on products they categorize as wants - with the exception of jewelry, the survey indicated.
While researching major purchases generally took between 38 to 115 days, an average of 76 days to make a decision, furniture consumers spent closer to three months researching.
More than 60% of consumers for all big ticket items overall started their research process online and 89% made their purchase in-store. For furniture, 95% of purchases were made in-store.
The data show the importance of offering a compelling message both online and offline, said Toni White, chief marketing officer of GE Capital Retail Finance.
"What this study kind of points out is that you have to look at the customer's purchase journey and figure out how you interact at all cycles of that journey," White said. "That is your product positioning - your pricing, the value, offering financing earlier in the decision making process - as consumers are shopping online."
The GE survey also found that 67% of consumers determine their furniture payment choice before they enter the store to make their purchase. It also found that consumers desire full price transparency and believe technology is giving them an ability to get the best deal.
"Before they may just drive to a few local stores and that was kind of their radius. Now the world is kind of their oyster when they look at the online environment to get more and more information about what they might be purchasing," White said. "They want to be empowered with knowledge before they make a big ticket purchase."
Alliance Data, a credit and marketing services provider, also recently released some results of a consumer survey.
Jeff Byron, director of market intelligence for the company, said that furniture consumers do more research than shoppers for other merchandise because of the amounts they're spending.
The Alliance Data survey showed that about 75% of consumers spent under $1,000 on their last furniture purchase. It also showed that consumers do a lot of pre-shopping before they get to stores.
The survey also showed that while nearly 60% of consumers don't expect financing options, almost 40% expected options of 12 months or 24 months.
While consumers browse for ideas on the Internet and through advertisements, in the process they're getting an idea of where they'll buy, he said.
That has made it important to have enough influence at contact points where customers are browsing to drive their pre-purchase decisions on where to shop, he said.
Even if today's cautiously optimistic consumer doesn't use financing to make a purchase, just having that option or other traffic builders on websites can help win over consumers, he said. That's because when they're browsing, shoppers want reassurance that they're making a good decision and a safe purchase.
Byron said retail websites "should absolutely make it worthwhile to come in the store, whether that is offering something online to kind of push them into the store - because we know they're browsing, they're looking at advertisements."
Furniture consumers have specific needs in mind for their homes by room, the survey said. It found that 39% were buying for the living room and 31% were buying for the bedroom. Next on the list was home office at 7%, Bryon said.
In terms of how consumers buy, 56% of the respondents said financing options were important where they shop for furniture, while 52% said those options are important when furniture shopping.
The survey said that 56% use a credit card to pay for furniture and 30% said they would buy more with an extended financing credit card program.
GE Capital Finance surveyed 2,000 GE consumer accountholders and another 1,000 random shoppers. All spent about $500 or more for major items such as appliances, electronics, floor covering, home furnishings, home improvements, jewelry, and lawn and garden equipment. It also conducted focus groups, in-home research and one-on-one interviews.
The Alliance Data study drew from a random sample of more than 700 consumers, 80% female, with at least one retail credit card and one bank card. Their ages ranged from 19 to 75, with 60% between ages 40 and 64. Respondents did not include consumers from Alliance Data's client lists.