How Do Americans Feel About Their Appliances and Computers? - 7investing 7investing
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How Do Americans Feel About Their Appliances and Computers?

The American Customer Satisfaction Index (ACSI) took its annual look at these categories and found some compelling results.

November 3, 2021

The pandemic has been a very strange time for so many reasons. We’ve all spent a lot more time at home and that has come with all sorts of challenges. One of those challenges has been that we’re relying more on our home computers and appliances. Many of us worked from home for an extended period while a lot of Americans had kids who attended school from home as well.

That led to us asking more from our computers and our appliances than we normally do. It may sound silly, but when you eat three meals a day at home that increases the workload for your stove, microwave, refrigerator, and other appliances. It’s a unique set of circumstances but it was a period where circumstances put added stress on computers and appliances at a time when supply chain woes made buying new computers and appliances more challenging than it normally is.

The American Customer Satisfaction Index (ACSI) does an annual survey on how the American consumer feels about these categories. As had been the case in many of its survey areas during the pandemic, Americans have been more forgiving due to the unique circumstances than you might expect. ACSI Managing Director David VanAmburg joined the Nov. 1 edition of “7investing Now” to discuss the results and what they mean.

A full transcript follows the video.

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Dan Kline:David VanAmburg welcome back to the program. We’re gonna call this take two, because we did this a little bit before we had some internet glitches. Hopefully, it will go better today. But David, you are the managing director of the American Customer Satisfaction Index. So your job is essentially overseeing this massive project that rates customer satisfaction, as we’ve gone through the pandemic here. Has there been any overall trend that you’ve seen? Before we get into the specific report we’re going to talk about today? Have there’s been has there been any overall trend that just sort of pops up that colors these results? Because these are not normal times? As I’m sure you know.

David VanAmburg  16:23  No they’re not normal times. And I think we’ve talked about each one of these industries over the months, you and I, throughout 2020. And every time we said, all right, let’s just take these with a grain of salt. And then when we get to 2021, we’ll be talking about something different. And we’re in 2021 and we’re still not really talking about a whole lot that’s different. Because we still aren’t out of this, right. It’s better, certainly. And yes, overall, that is the trend we’re seeing, we saw a huge drop off in customer satisfaction in the aggregate nationally. The whole sort of household consumption experience, really fell off a cliff in 2020. And it’s not really improving, per se, at this point in 2021. But it’s leveled off. We’ve kind of troughed and I think we’re seeing maybe the inklings of a little bit of a rebound in customer satisfaction. Nothing huge yet, but hopefully, more good to come.

Dan Kline  17:22  So we’re going to talk about your computer and household appliances, reports. There’s something you mentioned to me, that actually surprised me. I brought up that people were a little more tolerant, because they took whatever computer they could get. I told you earlier that I had to buy a couple of laptops, I had to briefly buy a desktop because we just couldn’t find a laptop. But you actually saw a bit of a shift in what types of computers people are buying.

David VanAmburg  17:45  We saw a little bit of a shift towards desktop computers. Could be as you were talking earlier about availability. You go to the store, and you really want a laptop, but the desktops are not the things that are going like hotcakes anymore. Two thirds of the purchases in the past year, according to our study were laptops. And that’s not surprising. And that’s probably part of the problem, right, all the laptops are gone, or most of them are gone.

So there’s a little bit more of a trend towards purchasing desktops for that reason. And also, I think, just kind of anchored to the reliability and the power of desktops for a lot of folks who are being told right now, just go ahead and keep working from home, somewhat indefinitely until things really change. So the idea is, well, I’m gonna get something really, really powerful, and really good. And have a true mini office setting in my own home, rather than, a laptop or a tablet, which are great, but they don’t have the the power of a lot of these really good desktop machines.

Dan Kline  18:48  No, and many people were working in offices where even if they have a laptop, they’re plugging it into a dock. They’ve got the big monitor, they’ve got the keyboard. I know it was very tricky for my wife to be one day a week in the office, maybe two for the last few months and really had to duplicate her office setup for eyestrain reasons. So this can be tricky. But overall, people were actually happier with with computer makers, right? Like it’s picked up a little bit.

David VanAmburg  19:13  That’s right, we saw a little jump from 78 to 79 on ACSI’s zero to 100 scale. So a little bit of an improvement driven mostly, interestingly, perhaps surprisingly, enough by a big gain for call center satisfaction. People who had issues, problems, looking for patches, upgrades, whatnot, calling into these PC makers call centers, contact centers. The PC makers did a better job. Now, one could argue that they are stepping up in the context of the times. They know so many more people are working from home. So many more people are relying so much more heavily on these devices now, and they better step up to the plate. They better actually do a good job of helping them resolve whatever issues they have.

Dan Kline  20:07  That is not usually how customer service goes. So I’m glad to see that. So Apple (NASDAQ: AAPL) still led the survey, but they came in about the same as last year with an 82, which I believe was a pretty good number on your report. But at the bottom here, and then we’ll talk about Apple in a second. Samsung dropped by 2%. But they’re still in the the sort of middle of the report. The real drop, was Amazon (NASDAQ: AMZN) dropped by 5% from a 78 to a 74. Do you think that’s largely because Amazon doesn’t make serious devices? Like, I’m not sure like your Kindle was meant to become like your work replacement? It’s meant to like watch the Avengers while you’re on a plane.

David VanAmburg  20:42  Yeah, I don’t want to get in trouble for calling it not a serious device. I suppose Amazon would would shoot me for that. But yes, I mean, in the sense that this is one that isn’t quite an apples to apples comparison. They are tablets, so they get into this study as a result of manufacturing the Kindles. But a Kindle isn’t a Dell desktop, it isn’t a Surface Pro, it isn’t some of these other devices that the other manufacturers on this list make. So yes, in that sense it’s taken a hit, but it’s a much more limited kind of technology relative to the rest of the industry.

Dan Kline  21:18  So the second piece of this report is household appliances, and household appliance scores actually fell a little bit. And I would argue, I had never thought about what brand name my appliances were. We bought a new refrigerator freezer during the middle of this. And my wife was insistent we not going to Samsung. Which is actually the top rated one on your report. But she had read something somewhere. And of course, the only company that made what we wanted was Samsung. And of course then we finally bought something and it arrived four months later. And then we sold that house a month later. So I wasted like two grand.

But that being said, do you think this fell because we’re asking more from our appliances? Like we’re all home, like the fridge had to work a lot harder, the microwave was not just heating your food, it was like a friend. Like, is some of this just expectations?

David VanAmburg  22:06  Yeah. And, also probably circumstances surrounding real use, right. I mean, things are going to wear more, break more, you’re going to have more issues, when you’re suddenly using that microwave to make your food, your kids food, because they’re learning from home because of virtual school last year, and all kinds of things. I mean, we were just in the house all the time. I’m not used to making lunch for my kids, they go to school, and they have lunch in the cafeteria there.

But every day it was preparing food, which means that then using the dishwasher, and lots of appliances, getting used a lot more. Which means you can end up with more breakage. And breakage could even be, in our one anecdotal instance, it wasn’t the microwave stopped working, it was that we literally cracked the handle of the door. It just kind of it just pulled off, and I had to have a service guy come in and replace it. So I think wear and tear, in addition to just, the expectations of, I’m home all the time with these lovable, wonderful appliances, and I’m going to use them a lot more. And maybe they aren’t quite as great as I thought they were when I didn’t have to use them so much.

Dan Kline  23:22  We also had a microwave issue, the “1” stopped working, so I could put something in the microwave for 59 seconds or 72 seconds or whatever it was. But I couldn’t hit “1” and have it be a minute. But that didn’t seem like something you replace your microwave for.

So yeah, now is some of this. And this is a very small drop. It’s a one point drop. So it’s not like it’s a giant. But do you think also supply chain was an issue. Like I mentioned, we bought a refrigerator freezer, and we ordered it on Memorial Day, and it showed up on Labor Day. Like that is literally how long it took for what would normally be a stock item. There was some dissatisfaction there. Not just with the maker, but also with Lowe’s (NYSE: LOW) where you bought it, also with XPO logistics (NYSE: XPO) that delivered it and did kind of a terrible job. Like so, I wasn’t feeling great about that refrigerator freezer, but it actually didn’t have anything to do with the refrigerator freezer itself.

David VanAmburg  24:16  Yeah, definitely supply chain issues. And really across the durables. I mean, we all know about the microchip problem with autos, right.

Dan Kline  24:25  Consumer electronics as well, your refrigerator uses chips too.

David VanAmburg  24:29  Exactly. So, I was gonna say that extends to the availability of the range of models and things that you might like to have for a refrigerator or a dishwasher or a PC. You go to Best Buy and you just can’t find the model you really want so you settle for something else and you’re not as happy with it. And the difficulty there, Dan, is that we’re talking about durables, if I head to Kroger (NYSE: KR) and my wife’s looking for a certain Coke Zero product and it’s not on the shelf, I’ll get her something else, maybe she’s not entirely happy about it because it wasn’t available. But a week later, it’s going to be and it’s a Coke.

We don’t consume these durable products every week, every month, every year. We want to make big ticket purchases that we expect to have around for a long, long time. So we want to get it right. And we want what we want, right? We don’t want to settle for something else that we’re stuck with for maybe years. So I think that has a big impact in terms of supply chain. Bigger than on non-durables or other kinds of, services that we that we consume.

Dan Kline  25:33  So is this just an area where these results may show something different? But they also may not? We’ve had this discussion, a lot of times, where you might look back five years from now and tell everybody not to consider your 2020 and your 2021 reports without having a little bit of an asterisk on them.

David VanAmburg  25:54  Yeah, I mean, to some extent, I think that’s going to be true. And that’s going to be true throughout the economy. Economists are going to talk about the wild swings in spending and GDP growth or shrinkage over these last two years that look really crazy right now on long term graphs. What do they mean? They mean, there was a pandemic in 2020, and 2021. They don’t necessarily speak to larger infrastructure issues that are endemic in economic problems as we try to grow ourselves as an economy. So I think the same should should be noted when it comes to how satisfied we are with all of these things that we’re purchasing and consuming in a really upside down world for the last few years.

Dan Kline  26:40  David VanAmburg, managing director of the American Customer Satisfaction Index, I will ask one last question. And I’ll ask it because this is how I feel. And I want to know, do you think if people are being more understanding? Because if I went to the grocery store 18 months ago, and I wanted gluten free rotini, and all they had was penne, I would have been like mad. Like, how are they possibly out of the pasta shape I want. Now, if they have gluten free something, I’m going to be okay. And I realize there’s a certain percentage of the population that isn’t going to deal with this. But as a country, have we maybe gotten relaxed a little bit about exactly having our specific needs met? Because things have been out of stock?

David VanAmburg  27:21  I think in that sense, yes. I mean, I think we’re not tolerant in all kinds of other ways that we probably don’t want to get into. Airline flight attendants being beat up over mask rules and stuff like that. But when it comes to availability of merchandise, yes, I think generally speaking in a retail environment, over the last 18 months. Anything we need to buy, anything that we’re really excited to find, where we’ve become a bit more tolerant, that it just may not be available. I think we’re a little less frustrated. Now I think initially, everyone was extremely frustrated as there was runs on toilet paper, and you name it, in the early part of the pandemic.

But I think we’re a little more tolerant, now that Amazon’s out of that particular size, or that color or whatever. It’ll be interesting to see what happens during the holiday shopping season. Because there have been a lot of warnings out there about supply chain having a huge impact on kids toys, for example. And just the availability of inventories for various things as people start shopping, starting around Halloween and getting through the Thanksgiving holiday and into the, into the December holidays.

Dan Kline  28:35  Obviously, in the first few months of the pandemic, when you couldn’t get things like toilet paper that you needed. That’s very stressful. And then when it became, well, I can get toilet paper, but it’s some weird Chinese brand I’ve never heard of, you’re just so thrilled to get it. I call it, and I think I’ve said this to you before, the golden age of Brawny paper towels. Nobody goes to the supermarket, and be like you know what I want, Brawny paper towels. But if they’re the only ones on the shelves, you’re pretty happy. And I’ve always pictured their corporate HQ just high fiving the whole pandemic. Because they had a resurgence. But we did become a little bit more willing to not use exactly our flavor or exactly our size. I’ll give you the last word here.

David VanAmburg  29:15  Yeah, I’ll just add to that, to the comment that you just made. The thing that I think, and this is my personal anecdote, but I have many friends who have experienced the same thing. It’s not frustrating, but I think all of us can point multiple times to things that we’ve looked for in the store and couldn’t find and wondered to ourselves, “why in the world are they out of that”? Like you think, that’s something I can’t imagine that many other people buy or eat and yet it’s gone. And maybe gone for weeks and weeks and weeks. And then you just think, is that ever coming back? You know it could be some obscure brand, not necessarily an obscure company, it could be something Kraft makes but it’s not one of their, it’s not a main item, Kraft mayo or something, right. It’s just some other little thing, and you think, week after week I go to Kroger or wherever, and it’s still not there. It’s just one of those really interesting phenomenon, the stuff that seems to be running out. Because it’s not toilet paper anymore, right. It’s not like the basic stuff. It’s just some interesting products that you can’t find now.

Dan Kline  30:20  And some of that is manufacturing choice, Kraft may decide, wow, we’re selling a lot more ketchup, we have to put more resources on ketchup and less resources on whatever this product is. And I also think consumers, and I’ll have just a very quick comment on this, don’t understand ordering cycles. So I mentioned gluten free before, I largely eat gluten free for allergy reasons. And I like a certain companies baguettes. But that’s not a big company on the shelves. So I’m sure that the Publix I go to doesn’t order just the baguettes, when they’re out, they have a certain dollar ordering point where it’s worth it to place that order, which is why when they have them, I buy a lot. And I’m sure other people have the same behavior. So they’re always out of stock. So we’re learning the nuance of customer satisfaction during this. And I’m really curious as we go through these reports next year, the next couple years what that is going to look like. David, thank you for joining us today on 7investing Now.

As always a pleasure. Thanks, Dan.


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