Austerity remains the norm for year-end average budget
Deloitte Christmas study 2013DOWNLOAD
Brussels, 7 November 2013 – For the 16th time, Deloitte has released the findings of its annual Christmas survey which investigates the year-end holiday season purchasing intentions among European consumers. Despite a modest rise in of the average budget of Belgian households this year, consumers remain cautious. Primary needs have the priority, to the detriment of discretionary expenses. Consumers are shopping smarter to find well-priced practical gifts: impulse purchases are not an option and price remains a crucial factor. Belgian consumers typically lagged the European consumers in terms of E- and M-commerce. In 2013 the gap has become smaller, in particular M-commerce shows high potential in Belgium.
Consumer confidence: mixed feelings about economy and purchasing power
As Europe’s debt crisis continues and as governments push ahead with drastic measures to reduce public deficits, consumer confidence has continued to suffer. But a light at the end of the tunnel appears to be increasingly evident.
As in 2012, the number of European consumers who believe their purchasing power is declining outnumber those who believe it has increased. These consumers are predominantly situated in Southern Europe where the impact of the crisis has been felt most severely. In Belgium, however, the situation appears to be improving. Where 13% of consumers believe their purchasing power has declined in 2013, 30% believe they have experienced an increase.
On a more positive note, fewer European consumers have a negative perception about the economy (with 50% saying that their country’s economy is in recession, compared to 55% in 2012 and 63% in 2011). In Belgium, recessionary feelings still exist among 35% of consumers, a clear improvement compared to 2012 when 50% of respondents stated that the economy was in recession.
For 2014, pessimism about the economy should continue to recede as fewer consumers worry about the economic situation deteriorating further. However, where pessimism about the future is declining in France, Belgium, Switzerland, Germany, Greece, Ireland, Italy and Portugal, the opposite is true for the Netherlands, Ukraine, Russia and Finland, where pessimism continues to gain ground.
As taxes cripple household budgets, discretionary expenditures are becoming scarce
In 2013, European consumers plan to spend on average €450 for the end-of-year period, marking an increase of 0.7% compared to last year, and the first recorded rise since 2008. This increase has mainly been observed in Northern European countries: Germany (+6.7%) and Switzerland (+3%). However, a further decrease is expected in Greece (-12.8%). In Belgium, households expect to spend approximately €503, an increase of 0.6% compared to actual spending of last year.
In this period of tax pressure and inflation of resources, the categories of spending which increased the most are those linked to primary needs. Unnecessary spending will be cut once again. European consumers indicate spending less in 2013 compared to 2012 on leisure and entertainment (40% of respondents), holidays and occasional spending (38%) and clothing (36%).
Koen Neijens, Consumer Business Partner at Deloitte Belgium, comments: “Belgian consumers do not differ from European consumers in this respect. They continue to be cautious and give priority to primary needs: they report spending more money on groceries, energy bills, taxes and healthcare. Taxes in particular have been taking an increasingly higher share of household budgets over the last few years. Governmental measures to reduce public deficit directly impact households’ budget.”
Tasks to be completed before Christmas: find well-priced practical gifts
In recent years, the economic crisis has directly affected consumer purchasing behaviour: impulse purchases are no longer an option and price has become a crucial factor. As in 2012, useful gifts are a priority. Globally, consumers are taking even more care of their budget by trying to find less expensive solutions.
Europeans continue to invest time to find the best deal. While more than half of Europeans say they still purchase their gifts between December 1st and 24th, our findings since 2010 show that people tend to plan their spending further in advance to the detriment of the week before Christmas. Furthermore, 80% of Europeans will be targeting sales (similarly to 2012, immediate discounts are preferred by the majority over other options), with more than 70% of Europeans planning to search the internet.
“Online search for items remains a strong trend in most countries. More than ever, the internet is becoming an essential tool to help consumers evaluate what, where and how to buy. And where the average European consumer is increasingly turning to the internet to obtain product information, Belgians are proving less inclined to go online. On average, 6 out of 10 Belgian consumers use internet to search for product information or to compare products while the European average is 7 out of 10,” adds Koen Neijens.
E-commerce and M-commerce: a booming trend in Europe but Belgium is late to the party
Convincing Belgians to shop online remains difficult, with only 17% of Belgian consumers purchasing gifts online compared to the European average of 32%. Germans are champions in this category (almost half of their gifts are purchased online), whereas Belgium sits far below the European average. 83% of the Belgians still prefer to buy gifts in a physical store compared to a European average of 68%. Nevertheless, the gap between Belgian and European consumers has continued to shrink in 2013.
Koen Neijens adds: “What consumers particularly like about the “cross-channel experience” is that they can use the respective advantages of e-commerce and physical stores to meet their expectations. On the Internet they find information that is not available in stores, such as consumer reviews/opinions and product and price comparisons. The main advantages of physical stores continue to be the possibility of exchanging products, followed by after-sales service and payment security.”
Finally, 26% of European consumers indicate that they have already purchased via M-commerce (using their smartphone or tablet), with figures reaching one out of three consumers in Germany, Switzerland and Luxembourg. Furthermore, 56% are prepared to do so in the future.
Belgium is significantly behind compared to other European countries (14% of consumers having used M-commerce versus the European average of 26%). Koen Neijens is however confident in the future: “There clearly is a lag in our current use but the potential to close the gap exists: Belgians’ intentions to use their smartphone and tablet in the future are not different from other Western European countries”. In 2012, only one out of five Belgian consumers indicated they believed they would use their smartphone in the future. This has increased to one out of two consumers, showing the increased potential of the growth of M-commerce. In particular men and young consumers are most likely to embrace M-Commerce.
Another year with gift vouchers under the Belgian Christmas trees
Like in 2012, consumers throughout Europe prefer to receive cash gifts (in 15 out of 17 countries). Books continue to be very popular as well and are actually the preferred choice when people need to buy a gift for someone else in 11 of the 17 European countries studied.
In Belgium, consumers still prefer to buy gift vouchers. Although trips, entertainment tickets and smartphones are among the Top-10 gifts that Belgians desire most, they are not in the Top 10 of gifts actually offered.
Among the noteworthy differences between men and women are laptops/computers, smartphones and DVD/Blue Ray/CD’s which are all favored by men but not to be found in the wish list for women. Women favor beauty care, jewelry and clothes, none of which are high on the wish list for men.
The most popular gifts for teenagers are video games, cash and books. For children, video games, model construction toys and action toys are the most popular.