Consumer Buying Cautious, But Rising Online

by , Sep 7, 2012, 4:32 PM
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Citi Research held a global call with analysts Friday providing updates on consumer spending and insight into advertising and marketing trends for brands.

The analyst firm said this year -- like last -- parents are basing back-to-school purchases on needs rather than wants, and wait until school begins to fill necessary shopping lists. Marketers should pay close attention to signals. As purchases are delayed, so should back-to-school ad targeting. Another tactic would continue running campaigns deep into September.

Consumers continue to use credit to make purchases, but at slower rates. American Express notes that purchase volume dropped from 12% in Q1 2012 to between 6% and 7% in Q2 among affluent consumers. In recent earnings reports, Visa executives noted that consumers don't see a consumer retrenchment, whereas MasterCard hasn't seen the same.

Industry data suggests an increase in spending online despite the recent macroeconomic uncertainty, according to Citi analyst Mark Mahaney. He points to data from comScore, excluding travel and event tickets, that suggests online retail spending rose 17% year-on-year in July, up from 15% sequentially. Amazon, eBay, Priceline and Expedia all point to increases in spending.

While Amazon and Zappos have nailed ecommerce strategies, some marketing experts believe platforms and apps available to integrate on social sites like Facebook have done little to boost online sales. In fact, many believe the model has failed marketers.

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