A Look Inside Consumer Holiday Spending

For many people holiday gift buying has become as much a part of the holiday season as jingle bells, roasted chestnuts and jolly old St. Nick. So much so that their holiday spirit can be affected by what happens at the register. According to recent Convergys research into the 2010 holiday shopping season, 69% of consumers said that their holiday spirit can be influenced for the better or worse depending on how they are treated at the register. When you consider how tight Scrooge was with his money, it’s something for retailers think about.

Luckily, people are much more predisposed to giving during this time of year, which is good news for retailers who are banking on big gains from a successful gift buying season to close out their year on a high note. Because it’s such an important couple of months to companies’ bottom lines, Convergys spent the first two weeks of December surveying more than 750 consumers to learn more about their shopping habits, expectations and preferences this holiday season. The following are some of the more interesting findings regarding holiday shopping in 2010:

• Although 42% of consumers said that their financial situation is better than it was last year, many are still recovering from the economic recession. Only 17% plan to spend more this year compared to last year, 52% will spend about the same, and 31% plan to spend less.
• On average consumers expect to spend approximately $588 on gift shopping this year. Young consumers (18-29) were the most likely to anticipate an increase in spending this holiday season, however they are also the most likely to be spending less than $200, which does not necessarily translate to significant revenue gains. Late Gen-Xers and early Boomers (40-59) may be the most lucrative demographic as they were the most likely (26%) to anticipate spending $1,000 or more.
• Overall consumers are more likely to have done the majority of their shopping in a physical store (57%) as opposed to online (43%). Nearly 6 out of 10 say shopping in a physical store was more satisfying that shopping online; however the more a consumer intends to spend, the more likely they are to be doing the majority of their shopping online.
• The more a consumer expects to spend, the more they value quality and ease of customer support. Low prices and free shipping are still important considerations, but become less so when the consumer plans to spend more.
• Past experiences and customer support are more important than product selection, brand reputation, return policies and financing. These are the differentiators that aren’t about lower prices or free giveaways, like shipping.
• Don’t underestimate the buying power of men this year. Men are 33% more likely than women to anticipate an increase in spending this year and 30% more likely to be spending $500 or more. They are also late shoppers. As of Dec. 14 85% of men had not completed their shopping, which suggests the big gains retailers are expecting may still lie ahead.
• These late-shopping men are in good company. As of Dec. 14, 82% of all consumers still had shopping to do and another 27% had not even started, representing even more revenue in the retail pipeline.

Of course, the best way to capture consumer spend during the holidays is to sell the items they most want to buy. When asked “what tops your holiday wish list,” here’s what the survey respondents are wishing for (in order of preference):

1. iPads
2. Money or gift cards
3. eReaders
4. TVs
5. PCs or laptops
6. Cars
7. Clothes
8. Theater electronics

For many retailers, the real holiday crunch will come following the gift buying, when consumers call customer service departments with questions regarding their purchases or seeking technical help to set up their new PCs or laptops, TVs, or theater electronics.

For more information about Convergys contact center solutions for retailers, please visit http://www.convergys.com/industries/retail/index.php.