Tuesday, October 12, 2010 | Edited by Daniel Moores
||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)
||Bigger TVs, DVR and Wi-Fi among Hot U.S. Home Technology Trends
As Americans' voracious appetite for home entertainment and technology continues to expand and evolve, so do the devices, gadgets and accouterments to support the craving. Nielsen's Q2 2010 Home Technology Report identifies the key technology trends that are hot and the ones that have cooled based on a two-year trend review of self-reported survey data.
The survey is based on a sample of 1,372 households. Telephone interviews, using a computer-assisted telephone interviewing (CATI) system, were used to collect the information from the sample households. Interviews were conducted with a randomly selected household member at least 12 years old.
- Bigger and Better TVs
Upgraded television sets in the form of bigger screen sizes larger than 41 inches and better resolution continue to outfit in-home theaters. Specifically, HDTV sets have increased 26.9% and LCD flat screens are up 48.2% from Q3 2008 to Q2 2010.
- Home Internet Access
Internet and broadband access in the home continues to rise – up 2.5% and 3.8%, respectively between Q1 2010 and Q2 2010. Currently, 85.3% of Americans have some kind of Internet access either through home and/or work.
- Home Wi-Fi
The freedom of untethered connectivity helps the trend to go wireless continue. Having a wireless network in the home increased 8.2% from Q1 2010 to Q2 2010 and 24% over eight quarters.
- Digital Video Recorders
Demanding schedules have made time-shifted viewing a must-have for 40% of U.S. homes who currently have a DVR device. And DVR adoption continues, increasing 14.5% from Q1 2010 to Q2 2010.
- MP3 Players
Almost half (46%) of all U.S. homes now have at least one MP3 Player. Apple's iPod is still the dominant player in this category, capturing 63% of all MP3 Player-owning households.
- Apple iPad
The Apple iPad launched on April 3, 2010, and was added to the Nielsen Home Technology Report survey shortly thereafter (May 2010). According to the Q2 report, 3.6% of U.S. homes now own an iPad and this hot trend will be closely followed.
(Source: Nielsen Wire, 09/30/10)
- Satellite Radio
While crystal clear audio, uninterrupted playlists and anywhere access make Satellite Radio an enticing experience, it experienced only modest growth over the past eight quarters, up just 5.5%.
- Video Cassette Recorders
VCRs continue to disappear from U.S. households as DVRs and DVD players provide both greater functionality and better playback clarity at an increasingly affordable price. Add the fact that U.S. movie studios are no longer releasing movies in the VHS format and you can expect the VCR to become just another trivia question for a digital generation no longer familiar with yesterday’s analog technologies. Currently, VCR ownership within U.S. homes is 70.2%, down 10.6% from Q3 2008 when it was 78.5%.
- Digital Video Disc Players
DVD players are down 0.6% from Q1 2010 to Q2 2010. With 87.9% of U.S. homes already owning a DVD player, the "hot" growth phase for DVD players has long passed.
- Personal Digital Assistants
The PDA is also becoming a rare sight these days within U.S. households. PDA ownership has declined 25.5% since Q3 2008 and will likely continue. Credit the Smartphone that provides both handheld computing capability and a phone for much of the PDA's steady market share decline.
||Study: Insurance Marketers Missing Opportunities
A study from the Chief Marketing Officer Council shows that insurance marketers are too focused on new acquisitions and are missing ways to grow business with existing customers.
For the most part, consumers are happy with their insurance experience, but 12% those surveyed say they resent not hearing from companies until it is time to pay the bill. The biggest communications oversight seems to be silence on the part of the insurance companies.
According to the findings of "What's Critical in the Insurance Vertical," more than 55% of consumers polled have held their existing insurance policies for more than five years and are open to receiving information from their trusted providers on new or complimentary services. And 21% of consumers purchased or increased the value of their existing policies after receiving communications, according to the study from the Palo Alto, Calif., group. However, only 7% of marketers in the insurance vertical value up-sell and cross-sell tactics as critical to route to revenue.
The report, sponsored by InfoPrint Solutions Co., reveals that insurance marketers could increase their business by executing data-driven, targeted retention marketing strategies. Yet many feel they must focus on acquisition strategies or servicing the needs of top-performing or strategic accounts.
Insurance marketers need to break the cycle of "data paralysis," according to Sandra Zoratti, vice president of global solutions marketing at InfoPrint Solutions Company and the author of the report.
"To me, there are two key findings which point to the fact that insurers are clearly not leveraging or maximizing value in their current customer base through data-driven cross-sell and up-sell opportunities which help drive incremental revenue, improved loyalty and increased customer lifetime value," Zoratti tells Marketing Daily. "Simultaneously, insurers continue to focus most of their marketing spend on new customer acquisition which is a more costly avenue to pursue, especially when their current customers are making it clear that they would buy more from their current insurer if asked."
For the report, more than 100 insurance marketers provided insights on how they market and sell insurance, while over 1,100 consumers provided feedback on their experiences shopping for insurance and selecting providers. The insurance industry's net premiums total more than $1 trillion annually. There are more than 2,700 property/ casualty insurers and more than 1,100 life/health insurers in the U.S., according to the Insurance Information Institute.
(Source: Marketing Daily, 09/27/10)
Daily Sales Tip: When the Prospect Says Yes, Then Does Nothing
This situation occurs in about 1 in 3 sales training sessions I conduct. It's one of my favorite (not really) things to hear from salespeople:
I GOT THE VERBAL!
You got the verbal? You got nothing.
If you're a professional salesperson, you probably already know this. If you're new or struggling, here's the tip:
IT'S NOTHING UNTIL IT'S SOMETHING.
Deals go bad. Prospects lie. Things change. All of these events can change the VERBAL in a New York minute. So what should you do?
1. Watch what they do, forget what they say. If someone gives you a VERBAL, take it at face value and keep your own emotions and expectations in check.
2. Drive the process. Once the VERBAL comes, it's your job to drive to an end. Share the crystal clear steps: i.e., Thanks, Joe. Here is a document that outlines specifically what happens next.
3. Stay mentally behind the deal. Everyone around you will want to "get excited." Not you. You stay even-keeled. You get excited when the money hits your checking account.
Last but not least. No matter who asks, never again say: I GOT THE VERBAL.
Source: Bryan Neale, sales trainer/consultant