Despite Continued Economic Impact, Shoppers Ready to Spend This Holiday Season
Though Americans are still operating with the recession in the back of their minds and many have fundamentally changed their shopping habits, some findings from NRF’s first holiday survey imply consumers won’t only be focusing on low prices and basic necessities this year. According to NRF’s 2010 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, U.S. consumers plan to spend an average of $688.87 on holiday-related shopping, a slight rise from last year’s $681.83.
Holiday Budget Allocations
As in years past, most holiday gift-givers will spend the largest portion of their budget buying gifts for family ($393.55) and friends ($71.45), though they’ll still carve out room in their budget for small tokens of appreciation for both co-workers ($18.26) and others ($34.82). Total spending on gifts ($518.08) is expected to rise 2.1% from last year, which is in line with NRF’s 2010 holiday forecast. Americans will also spend an average of $41.51 on decorations, $26.10 on greeting cards and postage, $86.32 on candy and food, and $16.86 on flowers.
“Consumers will still shop with the economy in the back of their minds, but we’re starting to see shoppers take baby steps toward a new normal,” said NRF President and CEO Matthew Shay. “As Americans open up their wallets for more discretionary gifts like jewelry or take advantage of sales to buy for themselves, retailers will begin to truly believe that the worst may be behind them.”
According to the survey, 61.7% of shoppers say the economy will impact their spending, down from last year’s 65.3%. Many shoppers say they will compensate by spending less (81.5%), comparison shopping online (30.9%) or with newspapers and circulars (28.1%), shopping for sales (54.1%) or using more coupons (40.6%). Although the economy continues to impact shoppers, a number of survey results indicate that shoppers may be ready to emerge from their shells this holiday season.
Factors Influencing Purchases
When asked which one factor will be most important when shopping this holiday season, the majority of shoppers said that sales or price discounts (41.8%) or everyday low prices (12.7%) were most important. While those factors either declined or remained flat this year, two other categories rose in importance. The number of people who counted customer service as the most important factor rose from 4.4% last year to 5.3% this year, while shoppers who touted quality as the overriding factor rose from 11.8% to 12.7%.
“Price is paramount during any recession, but when the economy begins to recover other factors take on greater importance,” said Phil Rist, Executive Vice President, Strategic Initiatives, BIGresearch. “When shoppers consider other factors like customer service and quality in buying decisions, retailers have the ability to highlight a variety of other features to help their company stand out from the competition.”
While many traditional categories like clothing (48.2%) and books (47.3%) will appear on a majority of wish lists this year, one item will appear more often than a year ago: jewelry. As a potential sign that discretionary gifts may become more popular, 23.0% of people will ask for jewelry this year, a significant 10% jump from last year’s 20.8%. Gift cards will remain the most requested holiday gift this year with 57.0% of people asking for plastic.
As another sign that shoppers feel a bit of breathing room in their budget, the number of people who say they will make a holiday purchase from a discounter dropped from 70.1% last year to 65.1% this year. Popular holiday shopping destinations will include department stores (54.5%), grocery stores (46.7%), the Internet (43.9%) and clothing stores (33.6%).
Shopping via Mobile Devices
Americans aren’t only shifting where they’re shopping – how they’re shopping is changing, too. Mobile devices like iPhones and Androids are becoming more popular among consumers, and many shoppers plan to use these devices this holiday season to look for gift ideas, compare prices and find items in nearby stores. According to the survey, over one-fourth of American adults with a smartphone (26.8%) will use these devices to research or make holiday purchases, and that number jumps to 45.0% among young adults 18-24. Retailers are expected to take advantage of this trend by offering more robust mobile apps and websites, along with enhanced features like mobile reviews, to cater to Americans looking to shop from their phones.
Yet another hopeful indicator: the number of people who plan to take advantage of holiday sales to make non-gift purchases for themselves will rise 8% this year (52.9% in ’09 to 57.1% this year), with the average holiday shopper spending $107.50 on themselves, up from $101.37 last year.
Though the holiday season won’t kick off for many retailers until at least November 1, a sizeable number of shoppers are already planning ahead. According to the survey, 37.2% of Americans will begin holiday shopping by Halloween. Women are the most likely to begin shopping by the end of October (42.1%) while young adults 18-24 are among the least likely (27.7%).[Source: “2010 Holiday Consumer Intentions and Actions Survey.” BIGresearch/National Retail Federation (NRF). 19 Oct. 2010. Web. 20 Oct. 2010.]