Can Demand Keep Up For Tech As Buyers Become Less Satisfied?

ANN ARBOR (WWJ) -- Customer satisfaction has dropped for household appliances and electronics, but pent-up demand and a consumer penchant for the newest technology has kept sales strong, according to a report released Tuesday by the Ann Arbor-based American Customer Satisfaction Index.

The ACSI's Household Appliance and Electronics Report 2013 measures customer satisfaction with three durable product categories: household appliances, personal computers (including desktops, laptops and tablets), and televisions and video players.

For all three, customer satisfaction retreated 1.2 to 1.3 percent from last year.

Windows-8 Devices Can't Catch Apple

Customer satisfaction with computing devices -- including desktops, laptops and tablets -- fell 1.3 percent to an ACSI benchmark of 79 on the 100-point scale. That's just short of the generally accepted ACSI standard of excellence of 80.

The industry continues to experience a shift in demand away from desktops and laptops to tablets and mobile devices. Tablets (ACSI score of 81) enjoy a small -- but significant -- lead over both laptops and desktops (tied at 79).

"ACSI research shows that consumers have high expectations and companies are under a good deal of pressure to keep up with demand for faster, more powerful devices that offer new and improved features," says Claes Fornell, ACSI founder and Chairman. "Companies that can innovate while maintaining high levels of customer satisfaction are the ones that will win."

Apple continues to have a wide lead in ACSI. Up 1 percent to 87, it outpaced the entire field of Windows-based manufacturers by 8 to 12 percent. Hewlett-Packard ran a distant second with an ACSI benchmark of 80 (up 1 percent), followed by Dell at 79 (down 2 percent). Toshiba (up 1 percent) and Acer (down 3 percent) were below the industry average at 78 and 77, respectively. The aggregate of smaller manufacturers (such as Samsung, Lenovo, and Asus) lagged well behind after dropping 5 percent to 76.

"Microsoft's revamped Windows 8 operating system does not seem to have provided a bounce in sales or in customer satisfaction for these manufacturers," said ACSI Director David VanAmburg. "Moreover, the vast majority of devices offered by HP, Dell, and other smaller PC makers are desktops or laptops -- a category that consumers find less gratifying than tablets."

Whirlpool Stays Strong; Electrolux Tumbles

Customer satisfaction with major household appliances such as washers, dryers, dishwashers, refrigerators, freezers, ranges, and ovens does not change much from year to year. The scores have ranged between 80 and 82 for more than a decade. This year, the industry's customer satisfaction dipped 1.2 percent to 80.

"The challenge for the appliance business is that the drop in customer satisfaction comes at a time when pent-up demand is driving sales of these and other big-ticket items," Fornell said. "In the short term, all appliance makers are likely to benefit from the upturn, but once demand slackens, an improvement in customer satisfaction would be helpful for further revenue growth."

Market share leader Whirlpool continued to top the industry with an ACSI benchmark of 82, despite a slight 1 percent dip. Whirlpool edged out GE and the aggregate of smaller manufacturers such as LG, Samsung, and Bosch -- tied at 80. Electrolux was the only company with a substantial deterioration in customer satisfaction, falling 5 percent to the industry's bottom rung at 78, after being within a point of Whirlpool a year ago.

Televisions & Video Players Set the Bar

Like other durable product categories, customer satisfaction with televisions and Blu-ray & DVD players retreated in 2013, down 1.2 percent to an ACSI benchmark of 85. Nevertheless, out of the 43 industries tracked by the ACSI, the combination of great quality, innovative products and affordable price, makes TVs and video players without equal in customer satisfaction. No industry has a higher ACSI score. Sales have been strong since the end of the recession until last year, with consumers migrating to flat screens. Smart TVs are likely to be the next destination for consumers looking to combine the benefits of a multitude of home electronics.

The full report is available for free download at www.theACSI.org. Follow the ACSI on Twitter at @theACSI and Like us on Facebook.

The ACSI is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States. The ACSI uses data from interviews with roughly 70,000 customers annually as inputs to an econometric model for analyzing customer satisfaction with more than 230 companies in 43 industries and 10 economic sectors, as well as over 100 services, programs, and websites of federal government agencies.

ACSI results are released on a monthly basis, with all measures reported on scale of 0 to 100. ACSI data have proven to be strongly related to a number of essential indicators of micro and macroeconomic performance. For example, firms with higher levels of customer satisfaction tend to have higher earnings and stock returns relative to competitors. Stock portfolios based on companies that show strong performance in ACSI deliver excess returns in up markets as well as down markets. And, at the macro level, customer satisfaction has been shown to be predictive of both consumer spending and GDP growth.

The Index was founded at the University of Michigan's Ross School of Business and is produced by ACSI LLC. The ACSI can be found on the Web at www.theacsi.org.