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Demographic Differences Surface in Economic Outlook and Holiday Intentions; Consumers Cite Technology as the Biggest Game Changer in Retail
NEW YORK (Profitable.com) While many consumers are uncertain about the economy heading into the holidays, a few important demographic segments are exhibiting more seasonal cheer, according to Deloitte’s 25th annual holiday survey of consumer spending intentions and trends.
Two-thirds (66 percent) of consumers surveyed indicate their financial situation is the same or better compared to this time a year ago, and 62 percent plan to spend the same or more on the holidays compared with 2009. However, half (50 percent) of consumers feel the economy is either in a recession or heading back into one.
Despite the mixed view, one group of consumers – the $100,000 and higher income bracket – is leading the upswing in sentiment with nearly half (45 percent) of households feeling the economy will improve next year, compared with 39 percent of all other survey respondents. Additionally, more than half (52 percent) say their job is extremely or very secure, 10 percentage points higher than the survey average. This group is also planning to splurge the most on the holiday season, spending a total of $826 on gifts this year, 77 percent higher than all survey respondents.
“Consumers who are feeling secure in their financial situation appear more willing to engage in some retail therapy, satisfying some pent up demand,” said Alison Paul, vice chairman and retail sector leader, Deloitte LLP. “At the same time, there are households that remain focused on necessities due to a job loss or other issues impacting their incomes. Other consumers report an improvement in their personal finances, yet remain cautious about the economy.”
Different spending habits appear across demographic age groups, with the 45 to 60 years old age group seemingly most affected by economic concerns. Four out of 10 (40 percent) respondents indicate their household financial situation is worse compared to last year at this time, compared with 35 percent of overall respondents. The highest number of respondents who said they will spend less this holiday season (46 percent) and that they have permanently cut back on the amount of money they spend (41 percent) came from the 45 to 60 years old age group.
Conversely, the 18 to 29 years old age group is ready to revisit retailers this holiday season after closely managing their finances, with nearly four out of 10 (37 percent) citing careful spending throughout the year as a reason they’re hoping to spend more on the holidays. While their expected gift spending is lower than other age groups, they may make it up in non-gift spending plans as they expect to spend 50 percent more than the average on entertaining at home, non-gift clothing, socializing and home/holiday furnishings combined, bringing their total holiday spend on gift and non-gift items to $1,394, compared with an average of $1,160 among all survey respondents.
In addition to gauging holiday spending intentions in the 25th Annual Holiday Survey, Deloitte asked consumers to share their views on the most significant shopping changes in their lifetimes. In response, consumers frequently cited the Web’s influence on their shopping. Almost half of consumers (46 percent) said that today they are smarter about prices as a result of comparison shopping online. Nearly four out of 10 (37 percent) indicate shopping is simpler because of the ability to shop in stores and online to find items they want. Also, one-quarter (25 percent) of consumers said the ability to check online recommendations from others has given them more confidence in buying a product.
“Among all the innovations over the years, respondents appear to value consumer technologies that provide convenience, simplicity, and access to information to empower them as shoppers,” continued Paul. “Today’s connected consumer is a precise and demanding consumer. Retailers that understand shoppers’ priorities and can provide consistent product, assortment and service across multiple channels will likely better engage consumers this holiday season and beyond.”
In addition to online channels, consumers are also turning to smartphones to make the most of their holiday budgets this year. The 18 to 29 years old age group is expected to drive a significant portion of mobile use this holiday season, with 37 percent planning to use their mobile phones during the shopping process. This group also ranks mobile/smartphones No. 1 on the list of products or technologies that had the most significant impact on their lives (60 percent).
Among all survey respondents, nearly one out of five (17 percent) plan to use their mobile phones during the holiday shopping process, and among these consumers, more than half (56 percent) plan to use their phones to compare prices or find store locations (54 percent). Additionally, nearly half (46 percent) plan to look for product information, while about four out of 10 will use their phones to shop (42 percent) or read reviews (39 percent).
For more information about Deloitte’s Annual Holiday Survey, including additional statistics, historical data and useful links, please visit http://www.deloitte.com/us/2010HolidaySurvey.
About the Survey
The survey was commissioned by Deloitte and conducted online by an independent research company between September 23 and October 10, 2010. The survey polled a sample of 12,418 consumers and has a margin of error for the entire sample of plus or minus one percentage point.
As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.