PORT WASHINGTON, NY, APRIL 17, 2007 – Consumer technology products are becoming more advanced and more integrated than ever before, leading to a growing demand for services. But according to new information from The NPD Group, many consumers are opting to bypass retailers and purchasing services from independent installers or manufacturers. The findings appear in a new report by The NPD Group, Services: The Consumer Perspective on Warranties, Installations, and Tech Support.
While the big box consumer technology retailers may be a first stop for many consumers' initial purchases, the buck stopped there when it came to several support options. Installation is one service area where consumers opted for someone other than the big guy. Fifty-two percent of consumers who said they purchased installation services for their desktop computer in the past year did so from either an independent installer or directly from the manufacturer. Only 27 percent purchased installation services from big box retailers.
Big box retailers edged out independent installers for flat-panel TV installations, but the independent installers took their fair share of home theater installations, which is a more lucrative market. Twenty-six percent of consumers surveyed used an independent installer for their home theater installation needs.
Local and independent service providers also made their presence known in the tech support field. Twenty-three percent of consumers surveyed who required tech support for their consumer technology products in the past year received it through local or independent shops. Even though the big box retailers have done a lot of promotion for their in-store tech support, only 12 percent of consumers surveyed said they had used those resources.
The top two places consumers turned to when they needed tech support for their home computers, both desktops and notebooks, were independent providers and manufacturers. Thirteen percent of consumers went to a big box retailer for desktop tech support and 17 percent for notebook tech support. One-in-four consumers used an independent provider for their home networking tech support needs, far outweighing those who turned to big box retailers.
"Tech support and installation are solid ways to build customer service, branding, and revenue," said Stephen Baker, vice president, industry analysis, The NPD Group. "The big guys are spending big bucks to try and capture service dollars, but consumers remain unconvinced that bigger is better. In many cases they prefer the comfort and personal service that the locally based service providers can offer."
One area that the big box retailers have captured is extended warranties. Big box retailers have found a way to leverage their sales strength across major CE products, including TVs, digital cameras, and DVD players, to drive increased warranty sales better than any other channel.
The big box retailers also lead warranty sales for computers despite not being the leaders in unit share for notebook and desktop sales. Manufacturers captured 41 percent of notebook unit share and 40 percent of desktop unit share but only had eight percent and seven percent respectively of warranty share.
"You can't put a price tag on lost time and because of that consumers are willing to pay to make sure their consumer technology products are working correctly and to their fullest capacity," said Baker. "Technology plays an even more central role in people's lives in the digital age. As the devices become more important in a person's lifestyle the need to keep those devices functioning is as central to the modern home as making sure your plumbing is up to snuff. Consumers are willing to pay the plumber for the service he provides and we are finding that consumers are increasingly more willing to pay the tech guy for services to keep technology products running smoothly."
For more information about the Services: The Consumer Perspective on Warranties, Installations, and Tech Support report, contact NPD at +1-866-444-1411 or contactnpd@npd.com
Methodology: More than 3,000 members of NPD's online consumer panel participated in the Services: The Consumer Perspective on Warranties, Installations, and Tech Support report from January 22, 2007 through February 6, 2007.
About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,600 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, visit www.npd.com.