US Consumers Cutting Back on Technology Purchases

Consumers plan to cut back this holiday season on consumer technology purchases, according to a new report by the NPD Group. The report examined consumer purchase intent for popular holiday gift categories including flat-panel TVs, desktop and notebook PCs, MP3 players, digital cameras, GPS devices, and digital picture frames - although not mobile phones.

The report found that among the consumers who plan to come out and shop on Black Friday, a good deal on a specific item is what they are looking for. Fifty-four percent of consumers who said they will get up and shop early on Black Friday are more interested in deals on specific products rather than just overall bargains.

Then there are some consumers who are rethinking making a big-ticket consumer technology purchase for the holidays. Of the 23 percent of consumers who were considering buying a flat-panel TV (40"+), 33 percent said because of the economy now they definitely are not going to buy one. DSLRs were on the shopping lists of about 12 percent of consumers, but now 25 percent of that group said they probably wonÃ't go ahead with purchasing a higher-end camera.

But there will still be plenty of consumers going ahead with planned purchases; they just may be a less expensive brand, or less expensive model from their manufacturer of choice. According to the report, brand loyalty will play a big part in DSLR purchases, but consumers said they will be looking for a less expensive model. More consumers said they wonÃ't be as brand loyal for their digital picture frame or MP3 player purchases, with price being the driving factor.

"The extraordinary economic turmoil we have seen will have a tremendous impact this season as consumers have said that they will probably or definitely hold off on products that have grossed the highest revenue over the last several holiday seasons," said Ross Rubin, director of industry analysis at NPD. "To take the best advantage of the consumers who still plan to buy these products, retailers will need to consider where consumers are cutting back on features and where they are switching bands or simply skimming on accessories."

Posted to the site on 25th November 2008