White Paper
October 10, 2017, 12:52 PM EDT
Sixth Annual Path to Major Purchases
Author
Synchrony
Abstract:
Overall, consumers are taking longer to make big-ticket purchases. Their purchase journey has gone from 63 days to 81 days in one year. But, on the plus side, the average spend for big-ticket purchases has gone up to $2,055, a 9% increase from 2016 to 2017. This could be driven by an increase in consumer confidence and an upbeat assessment of the job market. This boost in confidence could be translating into higher spend at the retailer, be it for jewelry or major appliances.
Table of Contents
The consumer's path to big-ticket purchases
For the past six years, Synchrony Financial has surveyed the U.S. population annually to determine the number of steps consumers go through to make big-ticket purchases (those costing more than $500)1. Our most recent study has uncovered some important insights.
Overall, consumers are taking longer to make big-ticket purchases. Their purchase journey has gone from 63 days to 81 days in one year. But, on the plus side, the average spend for big-ticket purchases has gone up to $2,055, a 9% increase from 2016 to 2017. This could be driven by an increase in consumer confidence and an upbeat assessment of the job market2. This boost in confidence could be translating into higher spend at the retailer, be it for jewelry or major appliances.
Another significant insight: The path to big-ticket purchases for people purchasing online is different from those buying in-store. The most significant difference? The purchase amount. In-store buyers spend an average of $2,037, while the average online big-ticket purchase is $1,433. That's a whopping boost of 42% for those purchasing in-store.
Both online and in-store buyers start with online research
Let's start with the beginning of the purchase journey. Both online and in-store buyers kick off their purchase journeys in a similar way – by researching online. Seventy-eight percent of in-store purchasers and 88 percent of online purchasers begin with online research. Ensuring a seamless web experience during this stage is crucial for retailers selling big-ticket items. Websites with product information that is clear and easy to access are winners at this stage.
Online vs. in-store buyers – different paths to purchase
After initial research, paths for online vs. in-store buyers start to diverge. For those who ultimately purchase online, their entire purchase experience is more likely to be done digitally. First, they are much more likely to consult online reviews. Half of online buyers say they check these reviews, more than double the rate of their in-store counterparts. They are also more likely to research financing options. About 38 percent get financing online for a big-ticket purchase. Online buyers are much less likely to do any research in the store. Only one-in-four online buyers walk into a store to research a high-cost item.
Alternatively, the majority of in-store buyers (65 percent) do their research in the physical store. On average, they visit two stores before ultimately buying an item. Once in the store, shoppers are less likely to do comparison shopping, signaling the importance of the sales associate and the ability to have the product immediately. And, in-store shoppers are more likely to consult with friends and family. About a quarter of them say they talk with friends and family members, but only 19% of them check online reviews (remember, about 50% of online buyers said they checked online reviews). For these in-store buyers, word of mouth and the in-store sales experience are much more important for big-ticket purchases. Excellent customer service, knowledgeable sales staff and immediate delivery are key to this consumer group.