Consumers Willing to Pay More for Innovation Despite Hard Times
Contrary to expected buying behavior, Retrevo Pulse, a live report that tracks pricing and demand data for consumer electronics, indicates consumers are willing to pay higher prices for new and innovative products. Trends suggest companies that innovate and develop customer-centric products attract more buyers than companies that simply lower prices and maintain the status quo.
“We’ve seen prices successfully rise for leading edge products that meet customer’s needs,” says Retrevo CEO Vipin Jain. “Despite a 15% year-over-year decline in the overall demand for consumer electronics, there are companies that are innovating and succeeding in driving demand up while raising prices.”
The Retrevo Pulse shows higher Average Selling Prices (ASP) and demand for digital cameras and DVD/Blu-ray players driven primarily by new and innovative features. As standard definition DVD players have become a low-priced commodity, consumers purchase the newer Blu-ray technology with a corresponding higher price tag, raising the overall ASP for video disc players by more than 20%. More than a third of video disc players now shipping are Blu-ray players. Similarly, more than 50% of digital cameras shipping now have optical image stabilization and face recognition technology enabling a higher price, driving up ASPs for digital cameras by more than 10%.
The Retrevo Pulse also indicates that one of the hot categories last holiday season, Home Theater Systems, is seeing a decline in both demand and price. Even though the category has gone through a product refresh cycle, there have been no significant product developments, dissuading consumers from making a purchase, and less than 5% of home theater system products ship with integrated Blu-ray players.
“Today’s shoppers aren’t just looking for the lowest price,” says Vipin Jain, President & CEO of Retrevo. “They’re looking for long-lasting technology and they’re willing to spend more to acquire innovative products. To compete, manufacturers need to deliver new and improved versions of products that meet their customer’s needs, not just their pocketbooks.”
Comments
Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!