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Consumer Attitudes to Online Price Comparison Sites

Datamonitor
October 29, 2009
SKU: DFMN2500506

Abstract Table of Contents Search inside this report Related Reports

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

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

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.

Reasons to Purchase

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

Overview
Catalyst: Summary; Methodology; Table of Contents; Table of figures; Table of tables
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 Financial Services Consumer Insight Survey data reveal 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 prizing custom away from the primary bank channel; The Spanish banking sector remains the strongest distribution channel for financial products and will be a difficult challenge for the PCSs; The high use of PCSs for utilities but low knowledge of FS PCSs indicates strong market potential in Italy; Consumers' awareness of PCSs differs across countries; Consumers that are not using PCSs prefer to go direct or to receive advice from a face-to-face relationship; There exist country-specific differences in reasons for PCS take-up; 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 do not 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 consumers or to create that impression; Action point: Building the reputation of PCSs as well as end product is critical if customer retention is to be increased; Developing a quirky brand image has short term success but is hugely costly to maintain; Gocompare has launched a campaign on a similar premise but has been met with mixed responses; Moneysupermarket's more serious approach looks likely to be withdrawn; Branding is crucial but large-scale campaigns are costly, depress margins and success is elusive; 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, and soon, if they are to take advantage of recessionary pressures.
APPENDIX: Definitions; Emerging consumer segments; Cautious consumers; Budget consumers; Recession-Proof consumers; Conscientious consumers; Methodology; Further reading; Ask the analyst; Datamonitor consulting; Disclaimer

Consumer Attitudes to Online Price Comparison Sites

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