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This holiday season, consumers are expected to continue to spend their money cautiously and will expect thoughtful and knowledgeable customer service when they do choose to go into a store, the National Retail Federation (NRF) said in a recent conference call.
New York--This holiday season, consumers are expected to continue to spend their money cautiously and will expect thoughtful and knowledgeable customer service when they do choose to go into a store, the National Retail Federation (NRF) said in a recent conference call.
NRF Senior Director Kathy Grannis and Pam Goodfellow, consumer insights director at Prosper Insights & Analytics (formerly BIGinsight), held a conference call Oct. 29 for journalists giving additional insight into their 2013 holiday consumer spending survey.
The NRF expects overall holiday spending to increase 4 percent as compared with 2012. The individual average spent on gifts, however, is expected to decline from $550 to $536. “We are going to continue to see a very thoughtful consumer when it comes to spending their money on gifts for others,” Grannis said.
Here are a few highlights from the call.
--“One for you, one for me.” Grannis said self-purchasing during the holidays has increased in recent years because of the discounts retailers have been offering. The trend will continue this year though not quite at the same pace as 2012.
According to the NRF, 57 percent of consumers will buy something for themselves this holiday season, spending an average of $130, down slightly from 59 percent in 2012. “It looks like there’s still a chance for the ‘one for you, one for me’ mindset,” she said.
--Consumers are in a practical state of mind. A total of 29 percent of consumers surveyed said they would opt for more practical items this holiday season, up slightly from 27 percent last year. In addition, 14 percent said they planned to make their holiday gifts, up from 13 percent in 2012.
Goodfellow said while practical presents will be popular, they expect consumers to invest in a few special items to place under the tree as well. “I don’t think it’s all going to be coats and socks and those kinds of mundane gifts,” she said.
She noted that gifts cards remain the No. 1 most desired item among consumers surveyed.
--Sales are important, but they aren’t everything. Price and sales are paramount when consumers are picking the place where they want to spend their money, but lowest price is no longer their sole consideration.
Receiving helpful and knowledgeable consumer service will be even more important than it was last year in attracting consumers to a store, according to the NRF.
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“It’s not going to be a lowest-price-point type of year (like) we saw during the recession,” Goodfellow said, adding that quality and customer service will factor in along with sales and discounts.
She adds that consumers won’t be afraid to buy higher-priced quality items but will do comparison shopping and showrooming to make sure they get it at the best price possible.
--Consumers aren’t happy with the government. Goodfellow said when they surveyed shoppers in October during the shutdown, consumer confidence in the economy was at its lowest point since December 2011, the last time the government faced a debt crisis.
She notes that the debt crisis of two years ago crushed consumer confidence and negatively impacted the holiday season.
“But I think this type of thing is the new normal for consumers,” Goodfellow said.
While she doesn’t expect shoppers to return to the “wild” pre-recession spending days where they were running up credit card debt, it’s not a foregone conclusion that this year’s government crisis will impact the holidays in the same way it did in 2011. Consumers are no longer as rattled by the federal government’s issues.
--Free shipping’s almost becoming a given. A total of 3.4 percent of consumers said shipping promotions would be a factor in their gift-buying decisions, up from 2.9 percent last year.
Additional research from Shop.org, the arm of the NRF that focuses on online retailing, shows that 35 percent of online retailers already offer year-round free shipping, up from less than 30 percent at this time last year. “I don’t think retailers have much of a choice but to look into free shipping year-round,” Grannis said.
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