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Awareness of Environmental and Global Issues Affected Holiday Spending

by MarketingCharts staff
Awareness of Environmental and Global Issues Affected Holiday Spending
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Most holiday shoppers surveyed expressed a willingness to pay more for eco-friendly gifts and said they took note of the country where items were made, KPMG said.

Moreover, money was tighter this year. Whereas an average of 36% of shoppers reported spending more each year during similar surveys from 2003 to 2006, just 30% of respondents in 2007 said they spent more than the preceding holiday season on gifts:

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Among the findings of the report:

  • Some 88% of the survey respondents said they were very concerned about the environment, and 74% said they buy environmentally friendly products.

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  • Some 60% said they were willing to pay more for environmentally friendly items, and 55% said they make a special effort to patronize retailers with a “green” reputation.
  • In addition, 40% of consumers said they checked the country of origin on potential gifts, with 31% using such information to decide against a purchase.

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  • Some 79% of those decisions not to buy an item involved products from China, and toys were involved more than half (52%) of the time.

Other influences on purchase decisions, according to the report:

  • Well-stocked retailers with a customer-friendly return policy continued to attract business:
    • 76% of shoppers said their spending decisions were influenced most when a store had the item they expected.
    • 58% cited a store’s return policy as influential.
  • Some 47% said newspaper ads affected where they shopped.
  • 43% said a coupon figured into the decision where to shop.

Where consumers shop, according to the survey:

  • Some 28% of respondents who shopped in stores said they spent the most at mass retailers (Wal-Mart, Target and other similar stores).
  • 14% said they spent more at power retailers (Toys R Us and Best Buy, etc.).
  • 12% said specialty stores (such as Gap and Radio Shack).
  • 10% said midline stores (such as Kohls, JC Penney and Sears).
  • 8% said department stores (such as Macy’s and Dillard’s).

Wallet share* ups and downs, according to KPMG:

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  • The internet and power retailers grabbed more of “wallet share” – 4 points and 7 points, respectively.
  • Specialty stores, catalogs (such as Gap, Disney) and warehouse retailers (such as Costco, BJ’s) gained 1 point each.
  • Mass merchants dropped 2 points, and department stores and off-price (TJX, Old Navy and other similar stores) retailers each lost 1 point of wallet share.

In addition, retailers’ well-documented rush to jump start the holiday season by advertising heavily and lowering prices – even before Thanksgiving – had little influence over when consumers began their shopping, the survey found.

“The KPMG survey respondents said they shopped basically at the same time they do every year, and sales or early promotions did little to change their patterns,” said John Rittenhouse, a KPMG retail partner and its “national leader” for Operations Risk Management.

* Wallet share denotes whether consumers are spending a larger or smaller portion of their holiday shopping budgets, where they are making purchases, and why.

About the study: The survey,` designed and managed by The Gordman Group, was conducted randomly by telephone with 815 shoppers.