Christmas Spending Survey 2011 |
2012 survey: View the latest survey results
Festive fun, savvy spending
by Richard Howard, partner, Deloitte
The annual Deloitte consumer survey of Christmas spending predicts that Irish consumers will once again be the highest spenders in Europe this festive season, despite the fact that the average spend per household in Ireland will be €943 down from €1,020 in 2010 and a reduction of €411 since 2008.
The survey, which was carried out in the second and third week in September, shows that of the average spend in Ireland this festive season, €520 will be spent on gifts, €258 will be spent on food, and €165 will be spent on socialising.
Download and view the survey report (PDF)
It is somewhat encouraging for retailers that the drop in spend is not as significant as last year, and it’s interesting to see that Irish consumers have regained the crown of top spenders in Europe.
That said, the prudency and increased frugality observed in previous years remains a feature of Irish spending. Be it buying fewer gifts, buying more own brand products or an increased focus on utility and durability, retailers must meet the needs of an increasingly experienced and savvier Irish consumer, one which is here to stay. Consumers now expect more for less.
Consumer behaviour
In terms of sales and marketing channels, it appears that Irish consumers are in line with their counterparts in Europe when it comes to how they shop. They are increasingly using the various channels available to them for both researching and buying their purchases. 51% of Irish respondents will use both offline and online channels to search for purchases, and 57% will use both to compare products.
However, half will make their purchases in physical stores; 39% will buy from both channels. 55% of Irish respondents indicated that they use social media outlets to search, compare or both. Just 22% of Irish respondents indicated they have used their mobile phone to buy a product; however 42% indicated that they will do this in the future.
Therefore, by combining the respective benefits of the internet and physical shops, all of shoppers’ needs can be met, thus underscoring the importance of adopting a cross channel strategy. For example, online channels score highly in terms of speed of shopping and around the clock shopping; however, in terms of after sales service and ease of exchange, physical shops are the preference for Irish consumers.
What retailers may increasingly need to look at is making online facilities available at their physical premises – for example, the availability of a Wi-Fi connection or computers in store will enable consumers compare products there and then and help the decision making process. However when asked to rank the areas in which retailers could improve their shopping experience, e-commerce ranked third, behind both lower prices and the customer relationship – value for money is front of mind.
Of particular note for retailers is the fact that Irish consumers will increasingly be using loyalty point schemes this year. In addition to the 42% of respondents who indicated that they will be using these to the same degree as last year, 39% indicated that they would increase their usage.
70% of Irish respondents indicated that they would buy gifts in traditional department stores; 68% in speciality chains and 59% in hypermarkets. Hypermarkets are the top choice for buying food, as identified by 84% of respondents, followed by normal sized supermarkets (41%).
An increased number of respondents now intend to do their Christmas gift shopping in November, up 7% on last year to 28%. A third plan to do their Christmas shopping in the first two weeks in December.
2012 Outlook
While our survey focused primarily on the festive season however, it provides some longer term insight into the behaviours of consumers and their priorities. Looking ahead to the new year, 36% of respondents believe their spending power will deteriorate in 2012, consistent with last year’s figure of 37% and 2009’s figure of 35%. In terms of cutting back next year, Irish consumers indicated that they were prepared to cut back on eating out (81%), household goods (81%), entertainment (76%), clothing (77%) and holidays (72%).
This gives retailers the opportunity to consider or review strategies and actions they can take and here we highlight just a few of these:
• Purchasing channels – review both on and offline for a cohesive strategy, as consumers increasingly go direct to retail and manufacturing websites for research and instore to purchase
• Evaluate pricing strategy – lower pricing is top of consumers priorities
• Ensure customer relations are top of your agenda
• More information around the benefits of products – consumers place a higher value on functional products
• New purchasing trends – grouping up to buy gifts; second hand items become niche
For further information see our detailed Christmas spending survey report below or contact any member of our consumer business team or your usual Deloitte contact.
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