STAMFORD, Conn. — GE Capital Retail Bank’s second annual Major Purchase Shopper Study has found that a growing number of consumers extensively research and compare prices and financing offers before making major purchases.
According to the study, 81% of consumers go online before heading out to the store, up 20% from last year, and spend an average of 79 days gathering information before making a major purchase. While consumers carefully consider before they buy, 41% of random major purchase shoppers say they are more open to making a large purchase than they were a year ago.
The survey and interviews, conducted by Rothstein Tauber, a marketing research company based in Stamford, Conn., explored the shopping habits of 3,220 consumers nationwide who had recently made purchases of $500 or more and were in the market for major items in 12 segments, including appliances, electronics, flooring, home furnishings and bedding, home improvements, jewelry, eyewear, power sports products and lawn and garden equipment. More than 2,200 of the participating consumers were GE Capital Retail Bank account holders and one third of respondents were random shoppers.
“We took a deeper look at how consumers use digital tools to approach a major purchase, including the role of mobile devices and preferred search engines, keywords and sites,” said Toni White, CMO of GE Capital’s retail finance business. “While online research plays a bigger role throughout the major purchase process, 60% of consumers start by visiting a search engine, then go to the retailer’s website, and ultimately, 88% made their final purchase in store.”
The availability of financing options continues to be a key factor in a shopper’s choice of retailer, with nearly half of all shoppers researching payment options online before visiting a store. Financing influenced the decision to buy from a specific retailer for 77% of GECRB cardholders surveyed, and nearly half would not have made the purchase or would have gone to another merchant if financing was not available, indicating that merchant marketing, awareness and loyalty programs can impact sales.
Depending on the category, between 40 and 137 days were spent researching the purchase. While the study data represents the average major purchase experience, it is inclusive of shoppers who had a short decision cycle based on a critical need to replace an item. The GE Capital Retail Finance Annual Major Purchase Shopper Study represents the average major purchase experience. The data reflects recent purchases valued at $500 or more that were categorized by consumers as both need and want. Note some product category differences (i.e., eyewear and appliance shoppers may have a shorter consideration cycle).
The findings also revealed the following:
• For one out of four major purchase shoppers, the purchase was part of a larger project.
• Replacement and upgrades are the two most prevalent triggers to purchase.
• The length of the purchase cycle and price are highly correlated.
• Consumers say digital tools empower them to compare prices and find the best value.
• Shoppers search for the following when they visit the retailer’s website (in order of importance): warranty information (66%), pricing (52%), specs/model information (51%), payment/financing information (47%), sales/discounts, availability and shipping information.
• On average, consumers visited five unique retailers — at least three online merchants and two brick-and-mortar stores — before making their purchase.
“These insights can help guide merchants in building better businesses by developing holistic marketing plans and effective sales training and digital strategies,” adds White. “The propensity for using the credit program again was also high, with 79% of cardholders stating they are likely to use their card again, so cultivating loyalty and high customer satisfaction can lead to reuse, referrals and favorable reviews.”