Study Finds Affluents Believe Recovery Is Here
Despite all kinds of mixed economic tea leaves, a new study of consumer perception from Deloitte indicates that most Americans do believe financial recovery has arrived, and that view is especially strong among affluents.
"Consumer confidence is really strengthening," Scott Erickson, a partner in the firm's retail practice, tells Marketing Daily. "And people with higher incomes are more likely to believe we are in recovery."
About 63% of those in the survey say they are planning to spend the same or more with retailers this year than they did in 2009; 40% say they are more upbeat about the economy. And while 55% of consumers think the economy is in recovery, 65% of those who make more than $100,000 a year believe that is true.
The survey also reported a marked improvement in people's perceptions of their household status, with 64% reporting that their financial status is either better or the same compared with a year ago. When asked that question just before the holidays, only 56% thought their household financial situation was the same or better).
Still, with conflicting data appearing every day -- for example, Wal-Mart last week reported a sales downturn based on what it sees as a customer base struggling to pay for basic food items, while rival Target Corp. the next day reported a sales bounce, based largely on strong sales of discretionary items, like clothing -- "there's a really interesting dichotomy that retailers are struggling with," he says. And many consumers see that ambiguity, with 27% saying that although they believe the economy is recovering, it is at risk for falling back into recession.
Erickson says the data also show that even though consumers may feel confident enough to spend more, they have made significant changes in the way they do so. "While consumer confidence seems to be improving, it doesn't mean they are reverting to their old spending habits. There is much more of a focus on value, and they are looking for places that are going to give them better pricing." As a result, he says, retailers still have to scramble to hang on to them.
Perhaps the biggest changes, he says, are in technology, with 56% of those surveyed saying they now rely on social networking sites, and with 43% of those people using the sites for shopping information. Their cross-channel skills are sharpening too, with 33% buying more online than a year ago, and 75% doing online scouting before or during the shopping experience. (Half of them say an online review has influenced a purchase.) And 21% have used a smartphone in the shopping process.
They are also well aware of the way the recession has gutted many retailers, with 50% saying they believe retailers are offering more sales and deals, and 53% noticing there is less sales help in stores, and 43% conscious of less inventory.