New York; Oct. 5, 2010 - The overwhelming majority of shoppers will maintain a tight grip on their wallets as they hit the stores this holiday season, with 83 percent expecting to spend the same or less on holiday gifts compared to 2009, the latest Accenture (NYSE:ACN) consumer holiday shopping survey shows.
“The 2010 holiday shopping season will be spectacularly unspectacular for many consumers, but that will suit retailers who remember well the turbulence of Holiday ’08,” said Janet Hoffman, managing director of Accenture’s Retail practice. “Our data suggests that consumer spending will be flat compared to last year, aided by a continuation of conservative discounting by stores and the limited discretionary income of many shoppers. In 2009, the trust that retailers showed in their forecasting and ordering systems to control their inventory was crucial to their success. They will need to exercise that same trust and discipline again if they are to be a winner this season.”
The annual Accenture Holiday Shopping Survey also revealed that discounts will be the key motivator for most consumers this year, despite moderate reductions by retailers in 2009. More than three quarters (87 percent) of respondents will not be moved to buy without a discount of at least 20 percent, and one quarter of (25 percent) said that they will be expecting an aggressive discount of 50 percent or more in order to make a purchase.
The study also highlighted a rise in consumer apathy toward the “Black Friday” shopping tradition. More than half of consumers (53 percent) said that they were unlikely to shop on Black Friday, or they have not yet decided (48 percent in 2009). Conversely, the popularity of online shopping continues to grow, as 69 percent of respondents said they will be buying holiday gifts online this year, up from 64 percent in 2009.
“The growing ambivalence toward the traditional Black Friday shopping trip is being driven by a number of factors,” said Hoffman. “The increase in the number of homes with broadband Internet access means that many shoppers will prefer to stay at home and bag the offers online rather than brave the crowds. Combined with this, over recent years we’ve seen retailers maintain their discounts throughout the season rather than focusing activity around Black Friday.”
Spending Outlook – Lack of Budgeting and Discretionary Income to Put Pressure on Consumers
Only 13 percent of consumers said that they had been saving money throughout the year for their holiday shopping and one third (32 percent) believe that their dollar will not stretch as far as in 2009. Additionally, 25 percent felt that paying for the holiday season makes it a stressful time of year, which could potentially impact their spending.
Of the 83 percent of shoppers who said they will spend the same or less on their holiday shopping, 53 percent claimed it was because they have less discretionary income this year. And, one third (33 percent) have concerns about the economy. The majority (60 percent) plan to reduce their spending by just $100 or less compared to last year.
Two thirds of consumers (65 percent) plan to spend at least $250 on their holiday shopping this year, in line with spending in 2009 (62 percent). However, fewer consumers (53 percent) will be setting a budget for their holiday spending this year compared to 63 percent in 2009.
Almost half of consumers (47 percent) said they will make sacrifices and cut back on gifts for themselves, while 43 percent will cut spending on gifts for friends. However, they are least likely to reduce spending on their children (24 percent).
Discounting in 2010 – Discounts Still the Priority for Consumers
The vast majority (93 percent) of consumers said that discounts and sales for items were either important or very important for their holiday purchases. In fact, 40 percent said that they would buy all or mostly discounted items (36 percent in 2009), and only 13 percent said that they were willing to pay full price to buy specific gifts this year.
The survey indicated that consumers were not pleased with the level of discounts made available last year. In fact, 38 percent of respondents said it was the number one area that retailers needed to improve for this year.
“The low number of consumers putting money aside for their holiday gifts and their lack of discretionary income means that the spending of many shoppers will be constrained by the level of available credit and their monthly salary,” Hoffman said. “This means that consumer expectations of what discounts they expect to see in-store does not seem to have been dampened by last year’s more conservative reductions by retailers. Companies will need to find different ways of demonstrating great value to their customers by making offers that protect the brand integrity but also provide value to the consumer.”
Online Shopping Grows but Consumers Still Testing the Relevance of Shopping Via Social Media for Holiday Gifts
The popularity of shopping online for holiday gifts continues to grow, with 41 percent of respondents buying at least half of their holiday gifts online and 38 percent planning to spend between $100 and $250 online.
However, although one in five consumers (21 percent) said that they had used Facebook for shopping in the past year, 88 percent said that they would not be buying holiday gifts via a social network, mobile phone or smartphone. One quarter (26 percent) attributed their reluctance to privacy or security worries, and one in five shoppers (20 percent) were unclear about the benefits they would receive by using these channels for shopping.
Free shipping continues to be the biggest motivation for an increasing number of consumers to shop online (43 percent this year, up from 35 percent in 2009), whereas one quarter (25 percent) said they will shop online to find better discounts than in-store.
“Holiday shopping is a 24/7 event,” Hoffman said. “A growing number of consumers are shopping seamlessly across multiple retail channels as part of their everyday life and there is a growing reluctance to pay a premium, in the form of shipping costs, to shop online. Our research also shows that there is an opportunity for retailers to grow in the social media channel this holiday season for those that can clearly communicate its benefits and make shoppers feel secure.”
Where and When Consumers Will be Hitting the Stores
Discount stores will once again be a key destination for shoppers (81 percent this year, marginally less than 85 percent in 2009) while online-only retailers are growing in popularity, with 43 percent of respondents planning to shop with them (37 percent in 2009). Holiday dollars will also be spread across electronics stores (33 percent), department stores (44 percent) and specialty stores (36 percent).
Four out of five consumers (79 percent) said that they were likely or very likely to shop more on tax-free shopping days during the holidays if it was offered by their city or state.
Half of consumers (50 percent) will do the bulk of their holiday shopping from Black Friday onward. And most (52 percent) of those shopping late in the season will do so because they expect the best discounts to be available, whereas for almost one third (31 percent) of consumers the motivation of shopping late is simply to have more time to save for gifts.
What Consumers are Buying this Year
Gift cards (56 percent), apparel (57 percent) and toys (41 percent) will be the most popular choices for gifts this year. Forty four percent of consumers will buy up to three gift cards, and 85 percent will spend up to $50 on each gift card.
One surprising statistic in this year’s holiday survey is the low number of consumers planning to buy the hot technology items of the year as holiday gifts. In fact, only four percent expect to buy a tablet computer and just seven percent have an e-reader on their shopping list.
Additionally, the study suggests that “self-gifting” is not expected to be a big trend in the 2010 holiday season. More than half of respondents (52 percent) said that they tend to spend less on themselves around the holidays in order to buy gifts for family and friends, and only 13 percent said that they liked to treat themselves to gifts during the holidays.
Hoffman suggests that this may affect one category in particular. “Since it is still women who do most of the holiday shopping, this trend of cutting-back in spending on oneself may have an effect on the women’s apparel segment,” Hoffman said. “This has been a recurrent theme throughout 2010, and it looks set to continue into the holiday season.”
Accenture conducted an online survey using a representative sample of 526 U.S. consumers in September 2010.
Accenture is a global management consulting, technology services and outsourcing company, with approximately 204,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$21.6 billion for the fiscal year ended Aug. 31, 2010.Its home page is www.accenture.com