With the media full of bad news and dour forecasts for this holiday season (store closings, layoffs and cutbacks – oh my!) I went in search of some happier, or at least less-depressing, holiday-related news. A quick Web search netted several interesting nuggets.
Give to charity
While we all know there is often a disconnect between what consumers say they are going to do and what they actually do, PayPal’s 2008 Holiday Survey, conducted by Ipsos, found that nearly three-quarters (73 percent) of online shoppers intend to give to charity this season, compared to 60 percent in 2007. The survey was conducted in October, when our economy was in full-scale meltdown, so it’s admirable that so many people plan to give to the less-fortunate, even as they themselves teeter on the brink of that status.
While 71 percent plan to give the same amount to charity again this year, 10 percent actually plan to increase their giving. Charitable giving is strongest among older online holiday shoppers (those 45 and above, at 83 percent) and among the most affluent (with salaries of $100,000 or more per year, at 85 percent).
Least-wanted gifts
Planning on giving a loved one a new tie? You may want to reconsider. According to a survey conducted by Opinion Research Corporation on behalf of eBay Inc., neckties are the gift people most dread this holiday season, with 24 percent of respondents ranking them as their least-wanted holiday gift.
And save the flowers and candles for Valentine’s Day: after neckties, these gifts ended up on the least-wanted list for both sexes, at 12 percent and 8 percent, respectively.
Who is usually the bearer of these unwanted gifts? It’s not a friend or co-worker. Thirty-two percent of all respondents reported that an immediate family member (spouse/significant other, sibling, parent or child) is most likely to give them the gift they least want this year.
The most-desired gift this holiday season is the one people choose themselves. More than two-thirds of respondents (64 percent) ranked gift cards at the top of their wish list, followed by clothes, shoes and personal electronics as the most-wanted types of gifts. Nearly half (48 percent) of respondents said they would most like to receive apparel, with jeans and a blouse/shirt at the very top of fashion fans’ holiday lists. Additionally, of those respondents who indicated they most wanted personal electronics this year, 26 percent said they pined for a laptop.
Luxury goods sales slow
Alas, even those for whom economic woes are no cause for worry appear to be cutting back. Results from a Bain & Company study show that the luxury goods market, once thought immune to the ebbs and flows of economic fluctuations, has begun to feel the effects of the worldwide economic slowdown and will likely enter a recession in 2009.
The study found that the growth of global luxury goods sales will slow to 3 percent in 2008, reaching EUR 175 billion. The slower growth rate stands in stark contrast to the 9 percent growth seen in 2006 and the 6.5 percent growth seen in 2007.
Turning to 2009, luxury faces its first recession in six years, as exchange-rate fluctuations and economic turbulence eat into the confidence of many luxury consumers in mature markets. The study predicts as much as a 7 percent decline in global luxury sales for 2009, using constant exchange rates, in contrast to a possible 2 percent decline when using current exchange rates.
However, the study’s authors cite an increase in spending on luxury goods over the next five years by high net-worth individuals in emerging markets such as Brazil, Russia, India and China, ranging between 20 percent and 35 percent, as cause for optimism.
Continue holiday rituals
Bucking the trend of bad news, Chicago researcher IRI issued a press release claiming that consumers will still be opening their wallets quite a bit this holiday season. It’ll just take a good deal to get them to do so. “We expect a consumer backlash this holiday season and a reverse of the misery effect consumers have felt this year,” said IRI Consulting and Innovation President Thom Blischok in a press release on the firm’s Rethinking Retail: Holiday Shopper Insights and Recommendations study. “Shoppers have affirmed loud and clear they will continue their holiday rituals, but will temper their spending through increased use of merchandising and promotions. Santa’s sleigh will be full, but functional and affordable gifts will win out over discretionary items.”
Gifts and gadgets will no doubt continue to rule this season, but consumers are also placing increased value on time at home with their family and friends, both as a way to save money and as a defense against the gloom of the outside world. Ninety-four percent of respondents said that spending time with family is more important than last year; 80 percent plan a greater emphasis on holiday meals and entertaining over last year; 65 percent will focus more on religious celebrations.
In an attempt to keep family traditions alive while watching expenses, 74 percent of shoppers will take more advantage of in-store promotions this year over last year. Fifty-six percent will take advantage of sales or promotions seen on TV or heard on the radio. Fifty-three percent will use coupons in newspapers more, and 43 percent will seek out more two-for-one and similar promotions.
“Shoppers are looking for ways to save money while they preserve their holiday experience,” said Blischok. “They are spreading out their spending to better fit their budget as well as taking advantage of early sales. They will be very creative in finding ways to save money. In addition to promotions, consumers will make better use of credit card- or store-reward points and utilize Web sites, blogs and social networking media to find deals.”
More than two-thirds (69 percent) of shoppers will spend the same on holiday meals this year. They will turn to coupons and in-store promotions to extend their budgets, with 58 percent stating they will use newspaper coupons more and the same number stating they will take more advantage of in-store promotions.
Private-label rules the table
And when it’s time to sit down for those holiday meals, private-label seems set to rule the table: 91 percent will use at least some private-label products to prepare their holiday meals. Seventy-nine percent of those who will use private-label products state they will do so to help them extend their budgets; 51 percent will use private-label products “whenever possible.”
“The consumer’s focus on private-label this season both reflects their desire to keep up appearances on the holiday table and represents a significant opportunity for CPG manufacturers and retailers,” said Blischok. “If positioned correctly, superstores and club outlets have the potential to use promotions to dominate this holiday season. Manufacturers and retailers must communicate effectively the new affordability equation: affordability = satisfaction + usage + savings.”
IRI recommends the following four strategies for CPG manufacturers and retailers this holiday season:
• Identify and align on the most-important shopper groups. Manufacturers and retailers should focus 80 percent of their resources on these primary targets and just 20 percent on other groups.
• Ensure that market messaging is driven by telling a story about affordability as well as functionality. Deliver unique experiences to make targeted shoppers feel like manufacturers and retailers know their changing needs.
• Make promotions compelling. Develop imaginative ways to promote products and experiences - motivate vs. manipulate. Initiate merchandising and promotions now to attract those shopping early.
• Collaborate to maximize shopper share-of-wallet. Manufacturers and retailers should work together as never before and remember that “winning” is a function of the offering, timing, relevance and value to the shopper.