Consumer Electronics Purchases

Part
01
of two
Part
01

Consumer Electronics Purchases: Retail Stores v Manufactures

According to NPD’s Checkout, a consumer receipt mining service, online sales of consumer technology went up by 19% in the first 9 months of 2017, versus the same time period in 2016. In 2017, Direct-to-Consumer (DTC) sales recorded the highest growth in the consumer electronics space, increasing by 34% and representing 13% of all e-commerce sales in the space.
Data sourced from Zion Market Research revealed that the consumer electronics industry had a global market size of $1.172 trillion in 2017. This amount is projected to grow at a CAGR of 6% to reach $1.787 trillion by 2024. Internet Retailer estimates that, in 2018, e-commerce sales accounted for 15.2% of the total global retail sales which stood at $18.84 trillion.

CALCULATIONS AND STRATEGY

To calculate the 2018 global market size of consumer electronics, a CAGR calculator was used, where the CAGR = 6% as stated earlier, the number of periods = 2018–2017 = 1, the initial value = $1.172 trillion, and the final value equates to $1.24 trillion, which is the required 2018 global market size of consumer electronics.
Assuming that the 2017 e-commerce share (15.2%) of global retail sales ($18.84 trillion) is applicable to the space of consumer electronics, then, it follows that 15.2% of the 2018 global consumer electronics sales were made through e-commerce channels. That is, 15.2% of $1.24 trillion = 0.152 * $1.24 trillion = $188.48 billion. This is the 2018 estimated value of consumer electronics sales made through e-commerce channels.
Considering that DTC sales account for 13% of all consumer electronics sales made through e-commerce channels, then, the global consumer electronics sales made through DTC channels equates to 13% of $188.48 = 0.13 * $188.48 billion = $24.502 billion.
The global consumer electronics sales made through third-party retail e-commerce channels = $188.48 billion—$24.502 billion = $163.978 billion. The ratio of consumer electronics sales made through third-party retail e-commerce channels to those made through DTC channels = $163.978 billion : $24.502 = $6.692 : $1 (expressed in the lowest terms). Thus, for every consumer electronics sale of $6.692 made through third-party retail e-commerce channels, a corresponding consumer electronics sale of $1.00 is made through DTC channels.

Part
02
of two
Part
02

Consumer Electronics Purchases: Customer Journey

Some details of the user journey of buying a consumer electronic product online involves them having a personal need for the product, the ease of the research process, comparisons they have made to similar products, the selection or variety and the evaluation of others of the product. There are a number of factors that are important to that user, three of which are user experience, reviews and brand/customer loyalty. Below we have explained our findings in some detail.

OVERVIEW OF The Consumer Journey online

The consumer journey buying a consumer electronic online includes all the decisions that usually goes with purchasing a product. This may include their personal need for the product, the ease of the research process, comparisons they have made to similar products, the selection or variety and the evaluation of others of the product. The journey also includes their experiences at each step before purchasing the electronic. This journey also includes their experience on websites and mobile apps, accessing online support, the prices they observe the item being sold at, pictures of the electronic, or reviews by others who have already made a purchase. For an online customer purchasing electronic products, extensive research into the product provides answers about product specifications, manufacturing information and concerns about trustworthiness and warranty of the particular product. Online customers purchasing electronics want to know that they are making the best decision, why each feature of the product is essential, and what makes one product more suitable than another.

important aspects of making a purchase

1. User Experience
One of the most important factors for the consumer making an online purchase is their experience. User-friendly websites encourage consumers to spend time navigating around the various pages. It also makes them want to come back. According to Webself, customer satisfaction declines by 7% every second it takes to load a page on an online store and will likely choose a different website if unsatisfied with the experience. Additionally, in a survey published by Salsify, it shows that customers who purchase electronics, are more likely to purchase when they have had a good user experience. Since consumers have unlimited options on where, when and how they buy. The user experience is not limited to just the product website. Customers want information before making a purchase. Information relating to all product content answers such as price, design, warranty, and trustworthiness. Therefore, if their experience in getting this information is good, they will be encouraged to make a purchase.

2. Reviews
Online customers appreciate positive reviews. This kind of information empowers them to make informed decisions on their purchases and helps them to trust the brand and become loyal to it. According to Salsify, 62% of consumers read over 5 reviews before making an electronic purchase. Therefore, feedback from previous customers is critical. Reviews from friends and family are also taken into consideration. The way customers speak about the product, as well as the high rates of satisfaction, make it easier for consumers to make decisions.

3. Customer loyalty
Brands that cultivate customer loyalty through an exceptional experience are likely to get their customers to keep coming back. They are also able to entice new customers. Customer loyalty encourages positive conversation about the product whether through word of mouth or online reviews which increases sales and influences decisions. Customers with no brand loyalty are more likely to take a longer time to come to a purchasing decision online than customers with a single brand in mind.

CONCLUSION

In conclusion, we have presented some factors that help determine the decisions made by customers in their online purchase of electronics. These include their experience, reviews and brand/customer loyalty.
Sources
Sources