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Audio retailing has been a tough business in recent years, but two just-released surveys are suggesting that with the right combination of economic factors and dealer preparedness, things could turn around for smart retailers over the coming holiday season.

Last week, Deloitte Research chief economist Carl Steidtmann forecast a jump in consumer spending during the holiday season as a result of increased cash flow to consumers. "Consumers are coming into a great deal of cash, based on various economic factors, and historically when consumers find themselves with this much additional cash, they spend it," said Steidtmann. "After two mediocre holiday selling periods in a row, retailers and their suppliers will be going into the holiday season of 2002 riding on a tidal wave of consumer cash. [Our data] predicts a rise in spending over last year ranging from 2.5% in the first half of 2002 to a more robust 5.5–6% by year end."

Steidtmann says his research draws on four indicators, including initial unemployment claims, real wage gains, taxes (personal income burden), and real home prices to fuel the index. Covering 25 years of historical testing, the index, Steidtmann says, is believed to be one of the more accurate for predicting consumer behavior.

So, if consumers have the cash, what is the best approach for a dealer to get them to part with it? Another study, this one released by the Consumer Electronics Association (CEA), suggests that much of the decision-making process of the consumer-electronics buyer occurs well in advance of reaching a store.

According to the study, "In most cases, a majority of consumers (68%) know which brand and model they will purchase well before going to the store. A product's quality, performance, and features, as recommended by other owners, friends, or family, have the greatest impact on consumer choice, making it difficult for retailers to influence product choice."

The CEA's Sean Wargo adds, "Consumers weigh a variety of factors when determining where they will shop and what they will buy. In that environment, the key for the retailer is simply getting the consumer into the store. This survey reveals just how important it is to balance pricing and a positive retail environment with friendly sales staff and strong return policies in order to gain and maintain loyal customers."

The survey results also indicate that consumers do view retailers as a knowledgeable source for product information, but rely on other sources to make their final purchase decision. Almost half of survey respondents say they consult retail salespeople when researching a particular product. Based on consumer perception, among those considered to be very or somewhat knowledgeable, are associates at computer stores (87%) and sales people at high-end electronics stores (84%).

However, the CEA notes that consumers purchasing electronics tend to be wary of retail staff, with only 15% of survey respondents saying they "completely or somewhat trust" store salespeople. This falls short of the trust bestowed upon friends or relatives who own the product (84%) or the product manufacturer (39%). The lack of trust contributes to consumers' reluctance to turn to a salesperson when undecided about which brand or model to buy—only a third of consumers (33%) say they do so.

All is not lost, though. According to the CEA survey, retailers have other ways of influencing consumers' choice of store. Though respondents say having the lowest price is the most important factor in choosing a retailer, participants also consider past experiences (83%), product variety (83%), and return policies (82%) when determining where to purchase consumer electronics products.

And then there is advertising, which also influences choice of retailer. Once ready to buy, 78% of those surveyed say they go to a store that has advertised the desired product. Consumers say they also look to retailers for available and friendly sales staff, with an overwhelming majority of respondents saying they consider these two qualities to be important factors when choosing a retailer (75% and 70%, respectively). In fact, 59% of respondents say they rely upon retail staff for getting help with locating product in the store.