Tuesday, September 15, 2009

Christmas Shopping 2009

Important stuff to know if you are in retail, advertising or marketing. This is from RBR.com:

Holidays: They’re making a list!


That’s the good news, according to a new study from researcher Information Resources Inc. IRI refers, of course, to consumers, who are beginning to emerge from their bad economy bunkers and are making plans to enjoy the upcoming holiday season.

The bad news is this: The lessons of the last year are not going to just shrivel up and drift away – this holiday season consumers will be practical, thrifty and very budget-conscious – hence all the list-making.

IRI Consulting & Innovation President Thom Blischok explained, “While consumers are beginning to awaken from the economic sea change just in time for the beginning of the holidays, they are taking very thoughtful and strategic approaches to their purchasing and are sifting hard through such questions as ‘What do I really need?’, ‘What does my family need?’, and ‘What can we still live without?’ Despite what appears to be a permanence of ‘strategic selection,’ last year’s dismal holiday retail results are being left behind as consumers are slightly more optimistic about the economy and are much more savvy about how they attack their holiday gift and meal list.”

IRI based its findings on a survey of about a thousand households.

Consumers are more optimistic about most economic indicators
Consumers have an improved outlook on many general economic issues, which is contributing to an improved outlook for the upcoming holiday season. Concerns about rapidly rising food, fuel and utility prices are still there, but they are diminishing significantly.

In particular, concerns about a rapid rise in food costs have diminished considerably, although they remain high. But in 2008, 98% of the household surveyed listed this as a concern, compared to only 77% this time, an impressive 21% decrease.

Of the major economic worries consumers have been grappling with all year, only concern about employment stability remains at a high level consistent with previous months. And that will be more than enough to put a damper on spending, particularly of the plastic variety. It is another factor that will drive the list-making urge this year.

Entertaining on a budget
Among the simplest ways to save money involves food, and the most basic strategy is to eat in rather than out. IRI finds that the vast majority will be getting together with friends and family for meals, but they will be in a private residence, not a restaurant.

And budgeting will be a factor for home consumption. 94% plan on spending $500 or less on food and $200 or less for beer, wine and spirits. Shopping will be done with an eye on price, and private labels will certainly hold their own against nationally advertised brands – in fact, IRI estimates that 90% of consumers will make use of private labels this holiday season.

When going out to purchase food and drink, consumers will be armed with a list – 2009 is not the year for large amounts of impulse buying.

Consumers want to maintain traditions of holiday gift-giving, but again the frugal habits developed over the course of the year will be evident. IRI says only 23% plan on spending more than $799, down 13% from 2008.

The key words are budget and list – consumers will tend to plan their purchasing strategy before entering a store or going online, and will be hunting for bargains to stretch their purchasing power.

IRI suspects that electronic gifts will be on the lower end of the scale – it suggests that items like iPods and Blue-ray disc players in the $100 range will be popular.

There is also expected to be an emphasis on practical gift-giving. The question “what would so-and-so like” will give way to the question “what does so-and-so need.”

That said, IRI notes that many consumers have learned over the course of the year to find inexpensive splurges, and items fall into that category one way or another may have a very successful holiday season.

In 2008, IRI says 41% of consumers did some of their shopping online. That number is expected to increase by 18% this year.

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