||Consumers Celebrating Practicality This Holiday Season
Consumers Maintaining Family Traditions and Entering Holiday Shopping Season Equipped with Lists and Frugal Strategies
This year, 49 percent of consumers are heading into the holiday shopping season concerned about the economy. This and related sentiments are affecting how, where and when shoppers make their gift, and holiday-celebration related food and beverage purchases.
New research, titled "SymphonyIRI Group Special Report: Holiday Shopping 2010," finds that 59 percent of consumers plan to spend less than $500 on holiday gifts this year, and 28 percent plan to purchase fewer gifts. The report goes on to explain that 25 percent of consumers will trim back spending on holiday celebration-related food and beverages. These findings point to a new holiday season that will continue to see practical and frugal shopper habits.
Despite this year's tight budgets, consumers still plan to maintain traditions by continuing their holiday celebrations and purchasing gifts for their friends and loved ones. For example, 60 percent of consumers indicate that they will purchase "very nice" gifts for their loved ones but do what they can to keep costs down, and two-thirds of consumers will work to pull off a fancy holiday celebration, but again, do what they can to keep costs down. Among all of these shoppers, however, spending will be conservative. In related findings:
"The bright spot here is that consumers do not plan to completely halt their spending despite a lack of confidence in the economy and concerns about their immediate financial futures," said Susan Viamari, editor, Times & Trends, SymphonyIRI. "Shoppers across all income brackets plan to shop at a variety of channels and will execute a combination of money saving tactics to complete their holiday gift and celebration purchases."
- 2010 will see an increase in the number of consumers who plan to budget no more than $199 this year on gift shopping -- 23 percent, up 8 points from 2009 (15 percent) and 12 points from 2008 (11 percent).
- Twenty percent of consumers are going out less frequently and entertaining at home more often this holiday season versus "typical" years
Tight Budgets Equal Strategic Shopping
Consumers are shopping in a deliberate, preplanned fashion in an effort to reduce expenditures on gifts and holiday celebration-related food and beverages. As with 2009, this year, consumers plan to enter stores with shopping lists in hand. Strong majorities of consumers will plan ahead and create gift and grocery lists with the same or increased frequency than they did last year.
In order to get the best deals on gifts and groceries, a large majority of consumers will also seek out deals prior to entering stores while also keeping an eye out for in-store promotions:
Consumers Spread the Love across Channels When Shopping for Food and Gifts
- When it comes to purchasing gifts, nearly three-quarters of consumers plan to compare products on the Internet as much or more than they did last year, while nearly half plan to take better advantage of in-store promotions and newspaper/circular coupons.
- Similarly, for holiday celebration-related food and beverages, three-quarters of shoppers will leverage Internet and e-mail coupons with the same or increased frequency, and just under half of shoppers plan to take better advantage of in-store promotions and newspaper/circular coupons.
- About one-third of survey respondents plan to stick to their shopping lists and avoid purchasing unplanned items during their gift and grocery shopping trips.
Mass merchandisers and supercenters, such as Walmart and Super Kmart, and online stores will be frequented most by shoppers making holiday gift purchases:
Consumers are indicating a strong willingness to search for the best price for their holiday celebration-related food and beverage needs this year.
- Mass merchandisers and supercenters continue to attract shoppers from across income groups; mass merchandisers will be a bit more heavily shopped by lower-income households, while upper-income households will skew slightly toward supercenters.
- Online shopping will also be heavily leveraged across income segments this year, but skew slightly to wealthier shoppers ($55,000-$99,000 income range and $100,000 or more). Key drivers of Internet shopping are convenience, product information, selection and price.
With affordability top of mind, store brands will be assured a place at the holiday dinner table, as 80 percent of shoppers will purchase store brand solutions with the same or increased frequency this year versus last year. Shoppers are drawn to these products because they are less expensive (cited by 82 percent of respondents), the quality is about the same as nationally branded products (cited by 43 percent), and because promotions make store brand products more attractive (32 percent).
- Eighty-eight percent of shoppers will shop in mass merchandise and/or supercenter outlets this year, with each of these channels cited heavily by shoppers across income segments.
- Seventy percent of consumers will shop at grocery stores.
- One-third of shoppers, who fall mostly in higher-income brackets, plan to shop at club stores, including 38 percent of those in households earning $55,000-$99,000 and 47 percent of those from households earning $100,000 or more.
- Eighteen percent of consumers plan to shop dollar stores, with those in the lower-income brackets citing a slightly higher propensity to visit this channel (27 percent of those in households earning under $35,000).
Holiday Shopping Season Kicks Off Earlier
In an effort to alleviate budgetary strain, this year's holiday shoppers are equipped with coping strategies adopted over the past couple of years. Nearly half of all shoppers surveyed plan to begin their holiday shopping before November, citing the desire to take better advantage of sales (46 percent), to ensure products are available (39 percent) and to spread spending out over time rather than making fewer larger purchases (39 percent).
Cash, Gift Cards and Functional Items Top Gift and Wish Lists
Not only are consumers planning to be mindful about how much, where and when to spend their holiday shopping dollars, they are also indicating that they will strive to be practical when it comes to selecting gifts -- perhaps a sign of the times where necessity trumps luxury.
This year, "what gift seekers want" and "what gift givers plan to give" are in sync, as gift givers and recipients have practicality top of mind. Cash and gift cards top both lists this year with functional items coming in a close second:
Cash Is King When Paying for Goods
- Fifty percent of those surveyed would like to receive a gift card as a present and 66 percent plan to give gift cards this holiday season. Twenty-three percent of respondents plan to increase the amount of cash or gift cards they plan to give this holiday compared to 2009.
- Sixteen percent of respondents would like to receive clothing, and 8 percent would like to receive books as a present. Luckily for these gift seekers, 49 percent of shoppers plan to purchase functional items, such as clothes, books and items for the home. In fact, 24 percent of respondents intend to purchase more functional items this year versus what they purchased in 2009, according to those surveyed.
Twenty-five percent of consumers intend to use their credit cards less this holiday season, instead opting to increase use of cash (20 percent of respondents) and debit cards (18 percent), as more consumers look to minimize debt. Across all income groups, cash is the preferred method of payment. Across all households earning less than $100,000, one-quarter of respondents indicate that they will use credit cards less when paying for their holiday goods.
"The economy continues to transform, and with that, consumers are evolving," said John McIndoe, senior vice president, Marketing, SymphonyIRI. "As a result, today's retail environment is even more complex than we have seen historically. Through comprehensive and ongoing surveys, such as this newly released Holiday Shopping 2010 survey, SymphonyIRI is providing insightful information that reveals opportunities for CPG manufacturers and retailers to serve and satisfy consumers and secure ongoing shopper loyalty."
(Source: SymphonyIRI Group, 10/04/10)
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