Despite the political turmoil in Washington, our economy continues to roar along. The National Retail Federal has just announced that March retail sales were up 0.8 percent unadjusted year-over-year.
“As every salesperson knows, it's not always easy to convince people to buy things — especially things they don't want," Peter Economy writes for Inc. Check out his tips on how to avoid coming off as a sleaze.
Despite showing no signs of spending less in recent months, a new Deloitte survey found that nearly three-quarters (74%) of Americans believe higher prices could slow their spending in the months ahead. More than seven out of 10 (71%) respondents cite concerns about higher energy prices, up from 54% at this time last year, and nearly one-half (47%) point to higher medical costs. To help make savvier buying decisions in the wake of the recession, many consumers are turning to mobile and social connections. Four out of 10 (40%) consumers surveyed interact with retailers through social networking sites to find out about promotions, browse products, or review recommendations. "With day-to-day expenses on the rise, retailers must be innovative and offer more than just low prices to attract customers," said Alison Paul, vice chairman and U.S. retail sector leader, Deloitte LLP.
Despite signs that the economy is turning around, consumers are still acting cautiously. For example, almost two-thirds of U.S. adults (63%) say they have purchased more generic brands in the past six months to save money while an additional 12% say they have considered doing so. According to Harris Interactive, Americans are doing other things to save money such as brown-bagging lunch, cutting back on visits to a stylist, cancelling magazines or newspaper subscriptions, etc. There are also some generational differences in what people are doing to save money. For example, Gen Xers (those aged 34–45) are more likely to brown bag lunch (56%) and cut back on hair styling (43%), while Matures (those aged 65 and older) are more likely to cancel a magazine subscription (45%).
While traditional retailers remain the favorites, more registered couples are considering home improvement retailers for their registries. Kitchen, bed and bath remain the most popular categories on a couple's wedding registry, with kitchen appliances/electrics topping the list at 91%. Less traditional gift items like power tools (18%), outdoor gear (20%), lawn care/patio items (19%), and grilling/outdoor entertainment (39%) are also being registered for at a variety of stores. As expected, the Internet is playing an increasing role in registry setup and management and the economy is also affecting more couples' registry choices.
A new Harris Poll finds that more than half of all adults are saving money by purchasing more generic brands, while over 40% are brown bagging more often and cutting back on visits to hairdressers and barbers. Over 30% have switched to tap water and canceled one or more magazine subscriptions. Smaller percentages, but many millions of people, have also cut down on dry cleaning, cut back or canceled cable television service, canceled a newspaper subscription, stopped buying their morning coffee, changed or canceled their cell phone service, increased their use of carpooling or mass transit and canceled their telephone landline service.
With an understanding that many of today's shoppers use Facebook and Twitter regularly, and because these tools are more cost-effective than traditional advertising, 47.1% of retailers surveyed will be increasing their use of social media this holiday season, according to a recent Shop.org study. In addition, to provide consumers with an extra incentive to start shopping, one-third of retailers (34.3%) say they will offer holiday deals earlier this year. Online retailer are also compensating for the economy by offering incentives such as free shipping. Four out of five online retailers (79.4%) will offer free shipping with conditions (such as minimum purchase) at some point during the holiday season, while more than half (57.4%) also plan to offer free shipping without conditions.
The Second Annual Benchmark Survey on Consumer Coupon Behavior, conducted by HarrisInteractive for RetailMeNot, found that consumers are increasingly defining their spending habits by whether or not retailers offer coupons. According to the new survey, 30% of online adults will not make a purchase at an online store if they can't find a coupon for that store, up from 27% in 2008. The survey also revealed that coupon use in the current economic environment is on the rise across nearly all demographics, but is highest among the employed and educated (college graduated).
As the U.S. economy suffered in 2008, the environment provided an opportunity for some online retailers to focus on gaining market share while other retailers struggled. For many, that concentration proved successful: according to a recent survey from Shop.org, one-third of online retailers (33%) said they increased market share during the downturn. As the economy begins to stabilize and consumer confidence grows, online retailers are hopeful for the future with guarded optimism. Four out of five online retailers (60%) believe the U.S economy will improve within the next year, and half (50%) think their web business will actually fare better than expected in the next 12 months.
More consumers feel confident that the economy will improve before the end of 2010 and this new attitude will lead investors back into the market. What may be different this time is that investors plan to come into the market armed with more information about where they want to put their money. This trend means that financial marketers from banks to brokers have a chance to win new customers by using educational ad campaigns.
Fewer consumers expect to reduce their spending on back-to-school items compared to last year, although economic concerns will continue to weigh on their shopping plans, according to a new survey by Deloitte. The number of people on the look out for value is up, as 74% plan to buy more items on sale.
Industry professionals are criticizing the results from a recent Harris Interactive poll. The poll found that 66% of Americans say ad agencies bear some of the blame for the recent economic turmoil.