Which brings us neatly to this month's mixed bag of consumer confidence reports. Market research company GfK is reporting that consumer confidence has taken a battering and has moved down on its scale to -1 when it comes to whether people are going to make a big purchase in December. Meanwhile, we have the same British public portrayed in a very different light by the Office for National Statistics (ONS) and the supermarket Asda. According to the ONS, we have just experienced the 20th month in a row of increased consumer spending, with consumers shelling out nearly 5% more this November than last. Asda reckons alcohol, petrol and holidays are all 6% cheaper this year, meaning that families were spending £11 more per week in November this year compared to 2013.
So on the one hand, consumer confidence is down and people are worried about the future enough to not be making major purchases. On the other hand, the UK public has more disposable income than before and is spending it. Which is right?
Well, actually, I think that although there is no dip in consumer confidence, both sets of research are right -- and the reason is Black Friday. This American import went to shoppers' heads this year. We all saw the fights over televisions and for those who didn't fancy a scrap over a supermarket display, there were Web sites that crashed and burned under the strain of online bargain hunters.
So with interest rates lower than we have experienced in a generation, the country employing more people than it ever has before alongside fuel and food prices dropping, it's no wonder that Black Friday was a big success. At the time, however, retail experts lined up to tell us simple people something we knew wasn't true. Black Friday, the tale went, doesn't eat into Christmas sales, it's a separate event and people will still be out there shopping in December for gifts to put under the tree. Of course, anyone without an 'ology' in shopping could have told you what was blatantly obvious -- the Boxing Day sales had come a month early and everyone wanted to get their big-ticket items ticked off on either Black Friday or Cyber Monday. Little Johnny doesn't really need two iPads and the front room only requires a single smart TV.
Hence, the ONS figures are by far the most revealing. Rather than claiming to show anything about consumer confidence, they stick to the data. Spending shot up in November and it has since been down year-on-year -- consumer electronics spending, for example, is down 4% to 5% this December compared to last. It could be that everyone's going to go mad today and over the weekend when most stores have their cutoff date for Christmas delivery. Or could it just simply be that Christmas came early for shoppers who filled their boots at the end of November -- and if they truly do need any other major items for the house, they'll be keeping their proverbial powder dry for the Boxing Day and New Year's sales. I know which option I believe in (hint... it's the second one).
One of the Hargrave family mottos I repeat to the kids is that you should never underestimate how dumb some very clever people can be -- the other one, by the way, is "enjoy the picnic, ignore the wasps." So, marketers should always trust their gut instinct and not always be led by the assumptions seemingly smart people are making about their data. Consumers are going to buy fewer big-ticket items in December, they say, so confidence must have crashed -- it's just a ridiculous argument. It's like interviewing drivers leaving a petrol forecourt and asking them if they intend to fill up again at the weekend. The fact that many won't need to doesn't mean they've lost confidence in the economy. They simply don't need to.
So the story of this festive season has clearly been the massive success of Black Friday. It gave retailers and shoppers an early bonanza as big-ticket items got snapped up -- giving couriers a fright, but at the same time, three weeks to deliver the glut of this year's presents.
Of course, people aren't buying big-ticket items in December. So if you're penning a report about how this means consumer confidence is down, please open a huge can of common sense and take a gulp. Then watch consumer confidence reawaken when the sales are back on again.