A combination of unseasonable weather, subprime mortgage and Wall Street woes, and higher oil prices have conspired to diminish consumers’ planned holiday spending, according to a Brand Keys consumer-spending study.
The average shopper intends to spend only 2% over last year’s spending estimate for gifts and good cheer, according to the Brand Keys survey of 16,000 consumers in the nine US census regions.
“Given that there isn’t as great an increase in anticipated spending this year, you’ll see retailers competing for fewer consumer dollars,” said Brand Keys President Robert Passikoff.
Still, nearly half of the consumers surveyed (52%) indicated that they have begun their holiday shopping earlier this year, with most indicating they’ve been looking for gifts (and sales) before the traditional post-Thanksgiving “Black Friday.”
Holiday Spending
For the first time in nearly a decade, however, the number of consumers who indicated that they were going to spend less has increased, virtually doubling compared with a year ago (30% versus 15%).
On average, consumers will be spending about $815.00, or only 2% more than last year, according to Passikoff.
Where Will They Spend Their Money?
Specific loyalty to retail channels is again in question as consumers indicated that they would use the full range of retail formats and channels.
“More shoppers, with wallets gouged by gasoline prices and seeking to avoid the crowds, lines at check-out, and the stress associated with bricks-and-mortar shopping, say they’ll go online to shop this holiday season,” noted Passikoff.
“They are also looking for retailers where there is a higher levels of customer service and more upscale merchandise. Attributes like those seem to pump up the price-value equation. That’s where the Department stores are going to benefit most and will most probably look to encourage multiple visits by customers.”
On What Will Money Be Spent?
“Just what might be expected, and similar to last years’ declared purchases. There’s been a slight bump in the electronics- technology category, up 10% from last year, and gift cards are up 15% from 2006,” noted Passikoff.
Consumers say they will spend money during the holiday season on the following:
”¢Â Gift Cards: 70%
”¢Â Clothing & Accessories: 54%
”¢Â Electronics/Computers/Phones: 63%
”¢Â CDs/DVDs/Video Games:55%
”¢Â Books: 30%
”¢Â Home Décor: 20%
”¢Â Travel: 5%
The only category that slightly down in terms of purchase intent is Travel, according to the Brand Keys data.
