Parks Associates survey identifies impact of education and income on consumer PC purchase habits

For each $1,000 in income, U.S. households will pay on average $1 more for a PC, according to the Consumer Decision Process Annual Survey, which has quantified the influence of income and education on the amount consumers spend on specific CE products.

International research firm Parks Associates recently completed this survey of over 5,000 U.S. consumers on their 2008 purchases and 2009 purchase intentions. The research, part of the Consumer Decision Process Service, examines ownership and attitudes toward product categories such as PCs, MP3 players, LCD and connected TVs, home networks, and Blu-ray players.

Results from the survey show that consumers with a graduate degree spend, on average, $100 more for a computer than consumers with only a high-school degree. Income levels also affect the final price for computers, as households with $200,000 in annual income spend over $150 more for a laptop compared to households with $50,000 in annual income.

“The prices consumers pay for PCs and laptops are remarkably elastic, especially when compared to products such as DVD players, game consoles, and home networks, where prices are basically flat across different income and educational groups,” said John Barrett, director, research, Parks Associates. “These results allow us to measure the impact of specific consumer attributes, such as level of education, and use that to predict both the products consumers are interested in and how much they’ll pay for certain items.”

For example, Barrett says, higher-income households would be more willing to pay a little extra for a better laptop, whereas they see less value in paying extra for a high-end DVD player. As a result, high- and low-income households pay basically the same for a DVD player.

Tricia Parks, CEO, Parks Associates, and Vipin Jain, CEO, Retrevo, presented research from the Consumer Decision Process Annual Survey on June 3 at CONNECTIONS™: The Digital Living Conference & Showcase. Their presentation, Navigating the Changing CE Purchase Process, discussed the impact of the recession and the need for flexibility in selling CE to consumers, especially as the power of brand has diminished.

For the full press release, click here.

Blu-ray Buyers in 2008

The one consumer electronics product about which I'm being asked the most this year is Blu-ray. Hollywood, the retailers, and of course the consumer electronics manufacturers are trying to figure out how sales are doing, particularly in this challenging economic environment. We got some clues from the industry last week that indicate that the aggressive price promotions for Blu-ray players seems to have paid some dividends.

Our own Digital Media Evolution study also offers some interesting insight. I had the chance to review the first findings from our team last night, and the data looks solid. Reported purchases of Blu-ray players (this would have been through the end of November) was north of two million units. It's really interesting to see how intended purchases for 2008 (from our Changing Consumer Electronics Purchase Process research from late 2007) have diverged in 2008. To our surprise, many consumer electronics categories did better in 2008 than the consumer intentions from last year would have indicated. Most pronounced were mobile and portable device sales, including digital cameras and mobile phones. It looks like smaller consumer electronics products are certainly out-performing the bigger-ticket items right now, and our new research indicates some interesting results about gifting intentions for these smaller items.

CEA and Sony say Blu-ray is Doing Well

I had the chance to attend CEA's Webcast this afternoon Holiday Update and Post Black Friday Analysis. They indicated that 54% of Black Friday buyers purchased consumer electronics products.

CEA says that 2.2 million Blu-ray players have been shipped (purchased) so far this year, and that we're on track to hit 2.75 million units before year-end. I've been more conservative on Blu-ray players, forecasting 2.35 million sales for all of North America for 2008, but it would be nice to be pleasantly surprised here.

Sony offered some good news regarding its own Black Friday experience. On a corporate blog, they noted that sales of their BRAVIA LCD televisions, Blu-ray Disc players and Reader electronic book devices all exceeded expectations.

Holiday Purchase Intentions and Recession-proof Gaming Industry?

We now have incredibly fresh data on consumer purchase intentions between now and January 1, 2009. We put a survey into the field late last week titled Digital Media Evolution, and a significant focus is on consumer electronics purchases made this year and those planned for the rest of 2008. I've organized the data under some major themes.

What Will Consumer Electronics Purchases Look Like this Year?

About half of consumers surveyed (49%) indicate that they will purchase fewer consumer electronics this year due to economic uncertainty. Interestingly enough, 17% of consumers plan to spend more on consumer electronics this holiday season, even as they reduce gifting for other products.

How Much are Consumers Planning to Spend?

Twenty-eight percent of consumers don't plan to spend for any consumer electronics this year, but 19% plan to spend more than $500. For gaming software, 49% don't plan to buy, but 16% plan to spend $100 or more.

Top Planned Holiday CE Purchases

When asked "How likely is your household to purchase any of the following products before January 1, 2009," gaming software (either for the console or the PC) tops the list. Smaller electronics look to be more popular this year.

There was in interesting article in CNET today about the gaming industry and whether it's recession-proof. However, here's a stat that was cited that simply cannot be true:

"[Forty-six] percent of consumers expect to purchase a video game system of some kind on Black Friday, the day after Thanksgiving."

That simply cannot be 46% of all consumers. Maybe 46% of consumers who plan to purchase a consumer electronics product? Even that seems way too high.

We'll see come Monday what the end result of Black Friday was. The wife and I had discussed buying an HDTV for the bedroom, but I'm convinced that we may see even better deals right after the Christmas holiday, so I'm waiting. Plus, who in their right mind wants to crawl out of bed at 4 a.m. the day after Thanksgiving?