Consumers willing to spend more this holiday season, IRI survey finds
Consumer confidence hit a high in third-quarter 2014
Consumer confidence hit a high in the third quarter of 2014 after zigzagging in previous quarters this year, according to the latest Information Resources Inc. (IRI) MarketPulse survey. This uptick is good news for marketers, because shoppers are rolling into the holiday season on a high note and are willing to spend a bit more, it notes.
In fact, the National Retail Federation is predicting that retail sales will be up by 4.1 percent in November and December. Overall, 2014 holiday sales are expected to reach $616.9 billion, which is more than a 3.1 percent increase compared with 2013, IRI reports.
”Marketers have a lot to feel good about as we enter the 2014 holiday season,” said Susan Viamari, editor of Thought Leadership for Chicago-based IRI, in a statement. “Despite the bumps along the road, consumer confidence is definitely on an upward trajectory and this is clearly evidenced in holiday spending plans.”
IRI compiled a Shopper Sentiment Index, which offers insight into how the economy is impacting consumers and changing how they approach grocery shopping. The index provides perspective in terms of price sensitivity, brand loyalty and changes in spending required to maintain desired lifestyles. A Shopper Sentiment Index score of more than 100 reflects consumers who are less price driven, more loyal to favorite brands and better equipped to maintain their desired lifestyles without changes.
In the third quarter, the Shopper Sentiment Index was 121.4, which is the highest point that the index has reached since it was launched in 2011. In addition, 20 percent of Americans said that they feel their financial situation has improved during the past year, and 25 percent expect continued improvement in the coming months.
This holiday season, 5 percent of consumers say they will spend more on food and beverages, compared with 4 percent in 2013 and 3 percent in 2011. Furthermore, budgetary cutbacks are becoming less pervasive, with 28 percent of consumers intending to spend less this year, compared with 33 percent in 2013 and 36 percent in 2012.
“The operative word here is ‘caution,’” Viamari said in a statement. “These aren’t huge gains, but they are cautious gains. And a 2 percent increase in the overall holiday pie for CPG marketers is definitely good news, where a point gain can make a huge difference to the top line.”
When it comes to holiday shopping, nearly everyone is entering the process with a shopping list in hand, IRI’s MarketPulse survey reports. Getting on consumers’ shopping lists is critical, because 33 percent of consumers say they are cutting back on additional/unplanned purchases this year, it notes. On the flip side, impulse purchases should not be ruled out completely. Thirty-three percent of consumers say they will leverage in-store promotions, so compelling in-store promotions are still a must for CPG marketers, it adds.
Furthermore, consumers will rely more heavily on online coupons from a variety of cyber locations, including manufacturer websites, retailer websites, email, group couponing sites and social networking sites.
”Marketers are certainly in a position to unwrap a nice boost in sales this holiday season,” Viamari concluded. “But, maximizing this opportunity will require marketers to communicate a clear and concise value proposition early and often throughout the shopper journey.”