If the pace of holiday shopping has been lackluster thus far, perhaps it's because consumers have been so busy answering pollsters' questions about how they'll spend this year. Anyhow, the past month of polling gives lots of detail on how people feel about spending this holiday season, and it hints at how they'll behave once we bid good riddance to 2009 and head into 2010.
While different methodologies yield different numbers for people's anticipated holiday spending, none of the reports are very upbeat. A report released last week by The Conference Board said households "expected to spend an average of $390 on Christmas gifts this holiday season, down from last year's estimate of $418." A Harris Poll, also released last week, found 46 percent of holiday shoppers saying they plan to spend less on gifts this year than they did last year. (It didn't provide an average dollar figure.)
Gallup's polling gives reason to suspect that holiday-shopping polls conducted earlier in the fall may have failed to capture the full measure of consumer pessimism as unemployment kept ratcheting upward. In an October survey, Gallup found respondents planning to spend an average of $740 on Christmas gifts. In its November polling, the figure had fallen to $638. The one consolation is that this figure isn't quite as bad as the $616 average recorded in Gallup's November 2008 survey.
Then again, a Deloitte survey, conducted during the weekend before Thanksgiving, found 30 percent of respondents saying they'll spend more on the holidays than they'd thought a month or two earlier. Among people who've shifted their thinking in this way, 43 percent said it's because they're "getting into the holiday spirit more"; 22 percent said they're "already spending more." The likely moral of divergent findings in various polls is that uncertainty about the economy has produced exceptional volatility in consumers' holiday-spending plans.
CUTTING THEIR LISTS OF RECIPIENTS
The Harris survey included an interesting wrinkle on how people are focusing their expenditures. "Despite the planned decrease in spending, 19 percent of holiday shoppers will increase their spending this year on immediate family members," said that research firm in its analysis of the findings. This nearly matches the 22 percent who'll spend less on immediate family. By contrast, just 7 percent plan to spend more on "extended family members," vs. 40 percent planning to spend less on those relatives. The report quoted Mary Bouchard, Harris Interactive's senior research director and lead retail industry analyst, as saying consumers are "shifting dollars away from spending on gifts for less significant relationships."
Polling by Penn Schoen Berland (PSB), meanwhile, suggests that while it'll be a lean holiday season for Tiny Tim and the Cratchits, it won't be so spartan for Scrooge and his fellow fat cats. This survey found respondents with income of $70,000-plus planning to spend an average of 27 percent more for the holidays this year than they did in 2008, while those in the under-$40,000 bracket will be spending an average of 14 percent less. While tenderhearted marketers will be distressed by the findings -- as will brands whose target markets lie among lower-income consumers -- it must count as good news for others that people with the most money at their disposal will be the ones most willing to boost their expenditures.
Gallup's polling certainly finds wide variations in the amounts people in different income brackets expect to spend on holiday gifts this year, The figure for those making $75,000-plus averaged $948, vs. $634 for the $30,000-74,999s and $308 for the under-$30,000s. The presence of children in the household wasn't as much of a dividing line as you might guess. Among respondents with children under age 18, the average anticipated spending figure was $694 -- higher, but not dramatically so, than the $625 among respondents without minor children. Nor was there a huge variation by age group. The poll's 18-34-year-olds expect to spend the most, at $657, but the numbers weren't wildly lower for the 35-54-year-olds ($619) or those 55-plus ($637).
SPENDING TIME VS. SPENDING MONEY
Whatever they spend, consumers will be intent on getting the most for their money. And, as surveys show, this means many will be investing time in their holiday shopping as a way of leveraging their lower dollars-and-cents investment. In a release this month from its annual holiday-spending survey, The NPD Group said 45 percent of respondents agreed with the statement, "I comparison shop before I buy." Thirty-seven percent said they "plan to buy all of my holiday gifts on sale." Asked how they'll go about doing their comparison shopping, 61 percent cited "online research," putting that source ahead of catalogues (35 percent), TV advertising (23 percent) and magazines (16 percent).
Another part of the NPD survey gave an indication of how financial constraints now dominate consumers' approach to holiday shopping. When respondents were asked to say which of several factors would influence where they shop this year, the biggest votes went to "overall value for the price" (62 percent) and "special sale price" (61 percent). Significantly fewer mentioned "quality of the products they offer" (45 percent).
The Harris polling noted similar priorities. Asked to say how important various considerations are to them when shopping for gifts this year, respondents gave the biggest "very important" vote to "Finding the best sales and discounts" (72 percent). It was far ahead of "Shopping where it's most convenient" (47 percent), "Shopping where I can get the best customer service"(37 percent) or "Shopping where I can find the 'hot' products of the season" (17 percent). It's clear that consumers have had an education in penny-pinching during the past year, and there's no reason to think they'll soon abandon those lessons. A holiday-shopping study by WSL Strategic Retail notes that consumers' "new habits are now firmly entrenched. . . . They are cautiously writing their lists, checking them twice, and only spending if they 'need it' and if they deem the value is right."
When it comes to buying online, free shipping will be a significant inducement. In the PSB survey, 57 percent of respondents said an offer of free shipping influences their purchase decisions. In The Conference Board's survey, likewise, 90 percent of online shoppers said free shipping is "a major incentive."
IS A SALE REALLY A SALE?
Consumers will approach their holiday purchasing with strict notions of what constitutes a sale. Polling for Consumer Reports at the tag end of October and beginning of November asked respondents to cite their pet peeves about holiday merchandising. Near the top of the list, cited by 68 percent, was "Fake 'sales.' If something is always 20 percent off, it's not on sale." Sixty-seven percent complained about "Coupons that exclude almost everything in the store," while 56 percent mentioned "In-store prices that do not match the same company's online prices."
The need to economize will exert its effect on the kinds of items shoppers buy as holiday gifts this year. The Conference Board's report finds "budget-friendly items" atop the lists of consumers who'll be buying gifts online, including books, apparel/footwear, toys/games and movies/DVDs.
Amid all this scrimping, though, marketers would be mistaken to think consumers in general view this season's holiday shopping as a dreary chore. The Harris Poll turned up plenty of positive sentiment when it asked respondents to pick from among some statements that might describe how they feel about holiday shopping this year. Twenty percent said they aren't shopping for holiday gifts at all. But just 18 percent chose "I dread the holiday gift shopping that I will have to do." A more stoic (but unenthusiastic) 21 percent picked "Holiday gift shopping is a chore, but it has to be done." On the cheery end of the spectrum, 23 percent chose "I am looking forward to the holiday shopping that I will have to do." And another 18 percent were unabashedly enthusiastic, choosing "I'm excited about shopping for holiday gifts." Bless them every one!
— Nielsen Business Media