Computer hardware

Discount Store News, Oct 20, 1997

Computer hardware products saw one of the most dynamic shifts in Power Brands this year as IBM slipped out of the top spot for the first time since DSN began tracking the category

Packard Bell ranked first with both consumers and retailers by a wide margin and took its place among this year's Power Brands. It is preferred by 23% of consumers and ranked the top performing brand by 10% of retailers.

Wal-Mart is the only retailer of the Big Three to carry computer hardware products, and employees surveyed named Packard Bell the top performer.

IBM fell to second place with just 13% of consumers and 3% of all retailers naming it a top performer. A.S.T., retailers' second top performing brand, didn't get a mention from consumers.

Apple continued its steady decline, dropping in overall rankings to fourth place from the No. 2 spot last year, due to the company's much publicized problems. Of particular note, 22% of Empty Nesters named Apple their favorite brand last year but didn't even give it a mention this time around.

The company's negative publicity had a strong effect across demographics. Once famous for its loyal supporters, just 16% of Baby Busters and 6% of Baby Boomers ranked Apple a favorite, a drop from 20% in both groups last year.

Nintendo made this year's preferred brands list at No. 5 due to strong sales and increased availability of N64, even as Sega dropped off the list entirely.

Compaq received fewer retailer and no consumer mentions this year, despite introducing two low-priced desktop PCs to the market. This low rating is possibly due to reported product shortages during the initial product rollout.

1997 didn't see much change in consumers' attitudes and brand loyalty toward computer hardware products. More than in any other category, shoppers place their trust in brands they know. Computer hardware tied with cosmetics for the lowest ranking of all categories in consumer willingness to buy a private label or store brand.

Brand recognition is so important to consumers in this category that they occasionally name favorites that do not manufacture computer hardware. 3M ranked third among consumers as their brand of choice. The company does make peripherals and ergonomic work surfaces but is primarily known for its office supplies. 3M barely registered a blip with retailers: just 2% gave it a mention.

The category is still new enough that many consumers have yet to establish favorite manufacturers. Just 69% identified a favorite brand among computer hardware products, two points higher than 1996. But brand loyalty, once formed, is particularly strong. Seventy-one percent said they would skip the purchase altogether rather than buy another brand.

Shoppers also strongly indicated that a private label or store brand in this category is an unacceptable option. Although the number went up slightly this year, just 33% of consumers surveyed said they would consider buying a store brand.

As consumers become more familiar with computer hardware products and manufacturers, they are more likely to develop strong brand preferences. The Power Brand list showed a strong brand reliance, especially among the younger demographic groups that are more computer literate than both Baby Boomers and Empty Nesters. No respondents in the youngest age group said they would consider buying a private label or store brand vs. 14% of Empty Nesters.

Conversely, consumers are less confident than ever that they will be able to find the brands they want at their primary discount store. So while shoppers are slowly developing more distinct brand preferences, they feel less likely to find them in the discount channel.

Retailers are mildly optimistic about store sales this year, but the majority are unsure whether business will be up or down. PC sales received a much needed shot in the arm this year with the introduction of low-priced models containing higher-end technology. This trend may continue as hardware manufacturers continue to slash prices, bringing state-of-the-art technology to market with lower prices.

Discounters

Brand             1997   1996

Packard Bell      10%    29%
A.S.T              8     --
IBM                3     10
Hewlett Packard    2      6
Nintendo           2     --
Sony               1      1
Macintosh          1      2
Apple              1     --
Compaq             1      5
3M                 1      2
Discount Store Shoppers

Brand          1997   1996

packard Bell   23%    12%
IBM            13     22
3M             13      3
Apple           7     22
Microsoft       3      5
Sony            3      5
Seagate         1     --