Holiday shoppers less worried but still frugal
Perhaps two years of penny-pinching practice has prepared Americans for yet another holiday season in tough financial times because consumers are overall less concerned with the state of the economy and more prepared to take a strategic and savvy approach to holiday shopping - armed with detailed lists and a strict budget in mind. Only 18 percent of consumers said they will be making their gift purchases without a shopping list, and 92 percent of consumers will do grocery store holiday shopping based on sales, discounts, product selection and in-stock items, according to research from Information Resources Inc., a Chicago research company. There is obvious reluctance to incur credit card debt through holiday spending, but attitudes and concerns surrounding gas prices, cost of utilities, job stability, the rise in food prices and the recession are all seeing a decline in how these factors will affect this year’s shopping rituals. Could it be that shoppers have simply grown accustomed to coping with the recession, living within their means and stretching their hard-earned dollars?
In comparison to 2008, concern about the price of food has dropped more than 20 percent in 2009 (98 percent in 2008 versus 77 percent in 2009). Expressed concern for the effect of gasoline prices on holiday shopping has dropped by 10 percent compared to 2008, and utility concerns saw a similar decline, down just over 9 percent from 2008. The overall effect of the recession on shopping decisions has decreased nearly 5 percent, but job stability concern remains top of mind, with a decline of only 1 percent.
Consumers plan to spend the same or less this year on holiday meals than in 2008. Nearly two-thirds of consumers plan to eat their holiday meals at home, half plan to dine at their friends’ homes and holiday parties, and almost all plan to consume alcoholic beverages during these holiday parties. More than 94 percent plan on spending no more than 500 on food, and 90 percent plan on spending no more than 200 on holiday beer, wine and spirits purchases. Only 11 percent of consumers mention they will shop without a grocery list, and private-label buying continues to be popular among shoppers. Seventy-nine percent say budgeting and 60 percent say matched quality to name brands remain leading reasons for the switch to private label.
More than 90 percent of shoppers are making gift-giving a priority, up nearly three percentage points from last year. Twenty-three percent of shoppers have a gift-giving budget over 799, down 13 percent from 2008, and 11 percent more plan on budgeting up to 499 for gifts in 2009 than in 2008. For more information visit http://us.infores.com.
Wants versus needs: Are Americans learning to live with less?
From the kitchen to the laundry room to the home entertainment center, Americans are paring down the list of familiar household appliances they say they can’t live without. No longer do substantial majorities of the public say a microwave oven, a television set or even home air conditioning is a necessity. Instead, nearly half or more now see each of these items as a luxury. Similarly, the proportion that considers a dishwasher or a clothes dryer to be essential has dropped sharply since 2006, according to data from Pew Research Center, Washington, D.C.
These recession-era reevaluations are all the more striking because the public’s luxury-versus-necessity perceptual boundaries had been moving in the other direction for the previous decade. In 1996, the share of adults who considered a microwave a necessity was just 32 percent. By 2006, it had shot up to 68 percent, and in 2009 it has retreated to 47 percent. Similarly, just 52 percent of the public in the latest poll say a television set is a necessity, down 12 percentage points from 2006 and the smallest share to call a TV a necessity since the question was first asked more than 35 years ago.
Along with a new creed of thrift, there’s another factor that appears to be shaping public judgments about certain items: technology adoption. Some consumer products, including some high-tech devices that have entered the marketplace relatively recently, appear so far to be recession-proof. A relative newcomer in the everyday lives of most Americans, the cell phone is among a handful of newer gadgets that have held their own on the necessity scale from 2006 to 2009. Moreover, it may have contributed to a drop in necessity ratings for the older-era appliance it has partially supplanted. People who consider a cell phone a necessity (some 49 percent of the public, including a disproportionate share of young adults) are less inclined than others to feel the same way about a landline phone. Sixty percent of adults under the age of 30 say a cell phone is a necessity, compared with 38 percent of those 65 years old or older.
An equally-dramatic generation gap opens when Americans are asked whether landline telephone service is a luxury or a necessity. More than eight-in-10 (84 percent) adults ages 65+ say a landline phone is a necessity, while only 49 percent of those under 30 agree. Younger adults are nearly four times as likely as older adults to say an in-home phone is a luxury (51 percent versus 14 percent).
“Old-tech” household appliances have fared the worst in the public’s reassessment of the line between luxury and necessity in their daily lives. Of 12 items tested, six dropped significantly in the necessity rankings from 2006 to 2009, while the other six basically held their own. All of the “old-tech” household appliances on the list dropped in their necessity ratings. For example, the proportion of people who rate a clothes dryer as a necessity fell by 17 percentage points in the past three years. There are similar declines for the home air conditioner (16 points), the dishwasher (14 points) and the television set (12 points).
A few of the “middle-aged” household appliances and services also declined. The microwave is currently viewed as a necessity by less than half the public, a 21-point drop since 2006. The proportion who rate cable and satellite television service as a necessity fell 10 percentage points since 2006.
In contrast, none of the newer information-era gadgets and services has fallen in Americans’ assessment of what they absolutely need to have. Home computers continue to be seen as a necessity by half of the public, unchanged from three years ago. High-speed Internet access is seen as a necessity by about three-in-10 adults. Two items that came onto the consumer scene in this decade, iPods and flat-screen TVs, are still seen as a necessity by a very small share of the public, but that share hasn’t declined during the recession.
Finally, there’s the automobile - the ultimate survivor. It’s been around for nearly a century, but in good times or bad, it retains its place at the top of America’s list of everyday necessities. For more information visit http://pewresearch.org.
Car-buying preferences correlate with magazine readership
With automakers scheduled to introduce more than 50 new or substantially redesigned vehicle models through the end of 2010, print advertising will continue to serve as an important tool for consumer targeting, model awareness and product differentiation, according to the 2009 Power Auto Offline Media Report - Summer Edition from Westlake Village, Calif., automotive research company J.D. Power and Associates. The report measures media viewing and readership habits of new-vehicle drivers, focusing primarily on magazine readership, but also includes television viewing, radio listening, Internet usage and newspaper readership.
Despite downturns in magazine advertising and the demise of several magazines during the past year, magazine readership among new-vehicle drivers in 2009 is at its highest level since 2002. The average new-vehicle driver reads issues from 11 different magazine titles, on average, within a six-month period, up from an average of 10 magazine titles - a figure that remained static for the past five years. In light of this, advertising in print magazines can be a reliable method of establishing early impressions of new-vehicle models among prospective buyers.
Among 27 new-vehicle segments, 30 percent of all new-vehicle launches through the end of 2010 are concentrated within the compact-basic, compact-conventional and mid-size premium-conventional segments.
“The real challenge for marketers is that consumers may be deciding between a variety of existing and newly-launched models in a particular vehicle segment,” says Jon Osborn, research director at J.D. Power and Associates. “Targeting customers early in the shopping process with messages that differentiate between competing models will be critical in capturing share-of-mind and sales close rates.”
For example, consumers considering a vehicle in the compact-basic segment, where four new models are scheduled to launch, tend to be both fuel-conscious and concerned about the environment. Drivers of compact-basic vehicles are more likely to read science, technology and outdoor enthusiast magazines such as Discover, Wired, Outside and Bicycling.
Just as individual models within a vehicle segment can differ widely, there are also important demographic and behavioral differences among the potential buyers at which these vehicles are targeted. In the compact-conventional segment, there are vehicles ranging in median price from 17,000 for the Ford Focus to 27,300 for the MINI Cooper. The median income of a Ford Focus buyer is approximately 64,000, while MINI Cooper buyers report household incomes of approximately 115,000. In this same segment is the Toyota Prius. This model is typically driven by consumers who are 57 years of age, on average - more than 10 years older than the typical MINI Cooper driver.
“Advertisers attempting to reach potential Toyota Prius buyers may find success in such publications as Time and National Geographic, whereas Popular Mechanics and Prevention are better at reaching Ford Focus buyers. Ads placed in Architectural Digest and Food and Wine Magazine are particularly effective at targeting MINI Cooper buyers,” says Osborn. For more information visit www.jdpower.com.
Educated women lead the digital couponing charge
Saving money is very much in vogue among young consumers, but don’t expect to find all cost-conscious young adults crouched over the Sunday fliers with a pair of scissors. A study from Scarborough Research, New York, shows that text messages and/or e-mail are an emerging method for households to obtain coupons, specifically among young, affluent, educated females. Users of text message and/or e-mail coupons are 14 percent more likely than the average adult to be ages 18-24; 51 percent more likely to be a college graduate or have an advanced degree; and 6 percent more likely to be female.
While not the leading medium for household coupon obtainment (the Sunday newspaper and other means such as in-store circulars and regular mail still remain the most popular), digital couponing is gaining a following among American consumers: 8.6 million (8 percent) of U.S. households currently acquire coupons via electronic methods. Text and/or e-mail coupons differ from circulars and direct mailing in that they tend to be highly relevant and include targeted recipients, most of whom have opted-in.
The top local market for text message and/or e-mail coupon users is Providence, R.I. Twelve percent of households in Providence typically obtain coupons via text message or e-mail. Washington, D.C.; Atlanta; San Diego; Austin, Texas; and Chicago, where 11 percent of households get coupons via this medium, are also among the leading markets for this activity. For more information visit www.scarborough.com.
Social networks a-twitter with movie buzz
Moviemakers, take note: Social networkers are highly engaged in grassroots movie marketing efforts. Specifically, 10 percent of social networkers said that they had posted a trailer to a social networking site. In addition, 39 percent of social networkers had reviewed a movie online, while 25 percent of non-social networkers had done the same, according to Digital Consumer Portrait: The Social Network Influence On Movie Behavior, a study from Stamford, Conn., research company InsightExpress.
In general, movie trailers are most commonly found by searching for the film’s title online, with 49 percent of all respondents (social networkers and non-social networkers) reporting this behavior. Browsing general movie sites was the preferred tactic for 29 percent of respondents, while 27 percent clicked on an online ad and 25 percent stated that they like to visit the movie’s Web site. In terms of age, 84 percent of viewers 18-24 years old watch previews before going to see the entire show, followed by 74 percent of viewers 25-44 years old.
Although opening weekend receives a good amount of attention from industry watchers and moviegoers alike, most people do not feel the need to see a movie within days of its release, regardless of their excitement level. In general, men are more likely than women to see a movie about which they are excited on opening weekend, with 32 percent of males and 17 percent of females reporting this behavior. An analysis of opening-weekend attendance by age shows that 42 percent of individuals 18-24 would attend, followed by 27 percent of 25-44-year-olds.
However, a look at the social networking population shows marked difference in opening-weekend enthusiasm. Thirty-one percent of social networkers agreed with the statement “It’s important to me to see a movie I’m excited about on opening weekend,” compared to only 16 percent of non-social networkers. For more information visit www.insightexpress.com.
Budget-conscious dining here to stay
It’s no secret that the recession has caused U.S. consumers to cut back on spending related to dining out, but a study of food-service customers conducted by New York research company Data Development Worldwide (DDW) shows that consumers are not likely to easily or quickly return to spending more even as the economy improves. When asked whether an improving economy would change their behavior, a majority of respondents indicated they would actively continue to find ways to keep their spending in check.
When consumers do dine out, the majority finds ways to spend less during each visit. Thirty-seven percent of customers actively use coupons, and other money-saving activities include ordering less-expensive items; ordering tap water; skipping extras like appetizers, sides and desserts; and buying combo or bundled meals.
“We’re finding that at least for the near-term, consumers plan to maintain their value-based behavior when dining outside the home,” says Chip Lister, managing director of DDW. “This puts a great deal of pressure on the food-service industry to develop ongoing menu offerings and pricing strategies and tactics that take this into account. It’s a time when the industry needs to consider ways to be stimulative - to give their customers an opportunity to get used to an improving economy.”
Survey results may be of particular interest to those toward the top of the food-service chain. The upper tier of casual-dining establishments has taken the biggest hit, with nearly half of customers acknowledging that they’ve reduced the frequency of visits. For more information visit www.datadw.com.