While it's no news that Americans are likely to spend less this holiday season, a new survey suggests they will find more creative, personal ways to do it.
The survey, from the National Retail Federation/BIG Research, finds that while consumers say they will spend about $682.74 on holiday-related shopping this year -- a 3.2% drop from last year's $705.01 -- they will spend more on food and candy, up about $10 to $90.26.
"We're in new times," says Phil Rist, EVP, Strategic Initiatives, BIGresearch, based in Worthington, Ohio. "Homemade food gifts are a way to reduce the budget and show that personal touch, as opposed to simply buying someone a cheaper gift. And even people who give someone a fruit basket they bought at a grocery store are part of that new practicality. You know that gift is going to be used, as opposed to a sweater that will sit in someone's closet."
With 65.3% of respondents saying the economy will affect their holiday plans this year, consumers will be laser-focused on price. Sales and price discounts are the most important factor to 43% of respondents in where they will shop, while factors like selection, quality, convenience and customer service all declined from last year.
"The big issue continues to be jobs," Rist tells Marketing Daily, "and while it's nice that people are talking about recovery and that Wall Street is making gains, consumers won't feel safe to shop as long as they're hearing so much about unemployment."
He expects that gift card sales will decline again this year, as they did last season. "It's because you can't get a deal on them. A $50 gift card costs $50, no matter what, and that's less appealing when you know bargains are out there." And while in some ways the cards can be seen as more personal --- "giving a teen a gift card to Aeropostale, for example, shows you know what they really want -- a card to a big mass merchandiser is less so," he says. Food-related gift cards will continue to be an exception, whether they are for groceries or restaurants. "They're seen as very practical."
Overall, NRF is forecasting a 1% decline in total holiday spending, to $437.6 billion.
In a separate study, NRF/BIG reports that online retailers are hoping to appeal to bargain hunters with special offers, and "free shipping" come-ons will be as common as sidewalk Santas. Some 79.4% of online retailers plan to offer the perk at some point during the season, with 57.4% providing it without conditions.
More than a third say they have increased their free shipping budgets from last year, and 30% will make their offers earlier. And 47.1% are upping their commitment to social media this holiday season, adding or improving their Facebook and Twitter pages, blogs or RSS feeds.