Monday, December 21

Counting Consumers: Consumer Reports


If anyone is looking for more evidence that The Futures Company might be right in predicting a dramatic shift in consumer conscience and confidence in 2010, the newest Consumer Reports survey seems to support a portion of it. Consumers are spending slightly less and are less willing to take on debt during the holidays.

Highlights From Consumer Reports Survey

• Consumers traded in unique finds and specialty stores for mass merchandisers (41 percent), online retailers (39 percent) and department stores (21 percent). The primary reason given was bargain hunting.

• Consumers are increasingly using cash as a primary form of payment (76 percent), with debit cards (51 percent) and credit cards (48 percent) falling by a wide margin.

• Consumers who are using charge cards intend to charge less ($636 vs. $723 in 2007), and plan to pay off any debt faster than previous holiday seasons. Last year, 61 percent had paid off holiday credit card debt by January; only 27 percent carried that debt beyond March. And 13.5 million Americans still carry 2008 holiday debt.

• Consumers are planning to purchase 15 gifts, with women out-spending men 16 to 13. Most of these gifts are classified as practical.

• Consumers are planning to shop between Christmas and the new year, with almost half taking advantage of post-holiday sales (81 percent) or purchasing gifts for themselves they did not receive (69 percent).

Overall, consumers planned to spend less on gifts. While spending plans are down, the holiday season has been welcomed by retailers. The Retail Index, which is a component that measures purchases made in November, rose 24 percent at the start of holiday shopping. This is despite consumer sentiment being low, as few have experienced financial improvement during the last six months.

What retailers and advertisers might glean from holiday shopping patterns is that consumers are focused on making smarter purchases, less willing to take on debt, and more likely to respond to common sense-driven marketing messages over affluence-driven purchases. Almost 80 percent also relied on social media for recommendations from friends and family and to find better deals, even if they made their purchases off line.

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