Consumer Attitudes to Online Price Comparison Sites

Consumer Attitudes to Online Price Comparison Sites published by Datamonitor in October, 2009. This report consists of 42 pages and the price starts from US $ 4495.

Introduction

Abstract

Introduction

Online price comparison sites have become a important tool for consumers wanting research FS products themselves and take greater control of their finances.

Scope of this research

• Using global consumer data, this report provides insights on the potential for the development of price comparison sites globally
• The UK is the most advanced of aggregator markets. This report gives an in-depth analysis of consumer attitudes & behaviours in this country

Research and analysis highlights

The global financial crisis has increased the levels of doubt and confusion within the financial services industry. Consumers find the independence and transparency provided by price comparison sites particularly attractive in this confusing landscape.

PCS, although involved or indeed owned by financial institutions, have managed to emerge untarnished by the same distrust affecting the advisors and brokers. PCS have managed to maintain an image of independence, with the appearance of having the best interests of the consumer at heart.

There is a perception that it is the younger, more technologically aware consumers who are using the PCS to their full advantage. However this doesn' t appear to be the case when looking at our data. The two largest demographics among the bought segment are the 35-49 year olds and the 50-64 years olds.

Key reasons to purchase this research

• Understand the global opportunity for developing aggregator sites outside of the UK
• Understand what consumers want from these sites and what promotes loyalty to the site over the FS provider
• Access Datamonitor' s FS Consumer Insight survey data to better understand consumer attitudes and behaviours

Table of Contents

OVERVIEW

• Catalyst
• Summary
• Methodology

THE GLOBAL RISE OF PRICE COMPARISON SITES

• Globally, consumers are attracted to price comparison sites as an alternative method of buying FS products
  • UK consumers are most likely to use PCSs to make a purchase, indicative of the developed market

• Datamonitor' s FS consumer insight survey data reveals high potential for expansion in some EU markets, though barriers to growth do exist
  • The Spanish market reveals potential but it will be hard work prising custom away from the primary bank channel
  • The high use of PCSs for utilities but low knowledge of FS PCSs indicates strong market potential in Italy
  • Consumers that aren' t using PCSs prefer to go direct or to receive advice from a face-to-face relationship

• On a global basis, motor insurance is most commonly purchased through PCSs
  • Insurance products dominate within the UK' s developed PCS market

• Different consumer preferences are revealed when it comes to researching FS products through PCSs compared to purchasing products using PCSs
  • Purchases through PCSs are not necessarily driven by price alone
  • Regional preferences influences the decision making behind product purchases

• Prior use is the main driver of which PCSs consumers choose, followed by advertising
  • Consumers return to a PCS they know, or are drawn in by the internet and other advertising
  • There is significant loyalty to the PCS Industry

CASE STUDY: THE UK PRICE COMPARISON MARKET

• UK Consumers trust PCSs more than any other FS provider, significantly more than brokers
• There is a significant opportunity to convert ‘Researchers' and ‘Opportunities' into the ‘Bought' consumers
  • PCSs should have clear objectives for each distinct consumer segment

• Understanding the Bought customer segment is key in this well developed, highly competitive market
  • PCSs are as readily accepted by older consumers as they are by younger ones
  • PCS buyers don' t appear more financially aware than the population as a whole, implying other motivators
  • Trust remains a strong differentiator between the three segments
  • The Bought segment are more concerned about price than branding and are prepared to shop around to meet these desires

• The individual consumer segments reveal different approaches to making their financial decisions
  • Bought consumers are at ease using the internet for financial advice
  • The largest differences between ‘Bought' consumers and other segments are in the use of internet resources for advice and the prioritization of looking for the cheapest/highest return product
  • The Researchers and Opportunities segments have a higher tendency to seek out advice from their primary bank and friends/family

• Datamonitor' s Emerging Consumer segments highlight important attitudinal segmentation within the PCS industry
  • PCSs see a higher use and purchase rate within the Budget-driven consumer segment
  • Recession-Proof consumers have a lower conversion rate from research to purchase
  • Trust in PCSs is high enough to assuage even the fears of the cautious consumers
  • Conscientious consumers take advantage of the PCS offering to better organize their financials

ACTION POINTS

• Action Point: PCSs must maintain a wide range of products if they are to support customer retention
• Action Point: PCSs should be looking to increase the level of human interaction they offer to consumers or create that impression
• Action point: Building the reputation of PCSs as well as end product is critical if customer retention is to be increased
• Action point: Cross-selling and packaging opportunities must be taken advantage of for FS products
• Action Point: Price comparison must be part of a service of value comparison
• Action point: PCSs within the competitive UK market must move into relatively uncharted territory for the PCSs, and soon, if they are to take advantage of recessionary pressures.

APPENDIX

• Definitions
  • Emerging consumer segments

• Methodology
• Further reading
• Ask the analyst
• Datamonitor consulting
• Disclaimer

TABLES

• Table: Branches per thousand members of the population
• Table: Reasons for not using a PCS and the country with the highest percentage response rate

FIGURES

• Figure: Globally some consumers remain unconvinced by PCSs
• Figure: PCSs see much greater success in the more mature UK market
• Figure: Consumers who reject PCSs prefer to go direct or seek other means of advice
• Figure: Using PCSs for Insurance products is much more popular in the UK, along with use as a whole
• Figure: Car Insurance and Credit cards remain the main FS products bought through PCSs
• Figure: Car insurance remains topping the products researched, joined this time by home insurance
• Figure: Price remains critical but additional features and brand name are similarly important
• Figure: Globally prior use and search engine results are the two top drivers of site choice
• Figure: Advertising has raised the profile of PCSs in the UK but prior use remains the chief driver
• Figure: The PCSs inspire loyalty amongst consumers but to the industry rather than the site itself
• Figure: UK PCSs appear to be offering better services reflected in higher loyalty and a higher commitment to purchasing
• Figure: Price Comparison sites are the most trusted financial institutions within the UK
• Figure: Nearly 40% of consumers have bought using PCSs but there remain strong segments of the population who remain reticent
• Figure: PCSs should have clear objectives for each distinct consumer segment
• Figure: 35-49' s top the PCS usage figures,
• Figure: No clear relationship between financial awareness and those who have bought using PCSs
• Figure: Budget-Driven Consumers appear to have a higher conversion between awareness of PCSs and product purchase
• Figure: Recession-Proof consumers are neglecting to make the final step to purchase through the PCSs
• Figure: Cautious consumers are willing to make decisions based on PCS advice and are comfortable purchasing products through the site
• Figure: Conscientious consumers take advantage of the service offered by PCSs
• Figure: Moneysupermarket puts a face to their experts

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