Despite warnings of subdued confidence, consumers are continuing to purchase digital devices from local retail outlets as technology products continue to decline in price, new research has found.
Although the cost of living is rising, almost 16 million digital devices were purchased by Australians in 2011, according to the Canon Consumer Digital Lifetstyle Index and GFK Retail and Technology research.
The average selling prices per device fell by 63 dollars over the previous year, contrasting sharply with the overall 3.1 percent increase in inflation.
Canon director of consumer imaging Jason McLean said consumers are continuing to receive quality products at lower prices, which is taking place in tandem with severe price deflation and increasing costs of doing business.
“While prices are moving to find their natural point of balance, our market is forced to contend with competitive disadvantages in the form of higher costs of doing business and the GST exemption of imported products under 1000 dollars.”
McLean also believes misleading online price comparisons prevent consumers from determining the real value proposition being offered in local stores.
“It is common to see unfair price comparison using local (recommended retail price) versus tax-free selling prices in the global market. The price paid at the register is the only fair price comparison and I encourage consumers to always check the value to be had in-store”
A report conducted by Ernst and Young for the National Retail Association stated a high tax-free import threshold in Australia is a key element in differentiating the Australian and overseas online retailers, which McLean said equates to 14 percent of the sale price on average.
“As an industry we’re absorbing the price deflation right to the bottom line and at some point this could threaten the viability of local operations.”
Canon welcomes the upcoming parliamentary inquiry to examine and resolve competitive issues.