The level of consumer confidence being reported by BIGresearch in the wake of its latest monthly survey is up two points from August – and while that’s certainly a good thing, it’s also hard to get very excited about a new reading that puts less than a quarter of Americans – 22.7% — in the combined confident and very confident columns. And while it may be better than August, it compares unfavorably with the 27.4% reading of September 2010, and BIG says it’s the worst September since it started keeping track 10 years ago.
51.1% claim to be practical or realistic consumers, up significantly from August when 46.8% made that claim and September 2010 when it was given voice by 47.6%. BIG looked at it another way and got similar results – 58.4% say they will focus their spending on needs rather than wants, compared to 55.5% in August and 53.8% a year ago.
35.9% are concerned that layoffs are coming in the next six months, which is actually an improvement over August’s 40.5% reading, but again, it represents lost ground compared to a year ago when the reading was 32.0%. At this point, 51.2% think layoff levels will remain stable. Asked about their own prospects, BIG said the attitude is “bullish” – only 3.8% are living in fear of an imminent pink slip. That score is within two tenths of a percent of both August 2011 (3.6%) and September 2010 (4.0%).
Fiscal responsibility is the order of the day for consumers – 33.6% plan to pay down debt; 33.1% plan to decrease overall spending; 26.7% are planning to increase savings; and 22% are going to rely on cash rather than credit for purchases. All of these readings represent increases year-over-year.
However, rising prices in staple categories are forcing spending whether the cash is at hand or not, which means that despite household fiscal austerity policies being in place, there is still a place for credit card use. Groceries, gas and clothing are being put on the plastic more and more over the last two years.
BIG notes that the American Automobile Association says that a gallon of gas costs a good dollar more than it did a year ago. That is driving consumers to their credit cards, and it is also leading to less driving.
Consumers are looking for sales, making fewer shopping trips, making sure the shopping trips they do take are closer to home; and once they’re at a store, they’re looking for store brands and generic products. Comparison shopping is also very much in vogue.
The optimism seems to have been worn out of consumers in general – and this is especially true when it comes to gas prices. 46.1% think they will still continue to inflate and will be higher at the end of the month of September. Only 9.3% think prices will start to come down. Still when all is said and done, sentiment is somewhat better on this count than in August, when consumers expected to be paying $3.81/gallon by 8/31 – the anticipated 9/30 price is eight cents lower at $3.73.
BIGresearch has been anticipating the economy showing off its Grinch side, and at this point, the continued economic doldrums are pointed exactly in that direction. Apparently a lot of consumers are still on the fence when it comes to holiday spending plans, but of those who had an answer for BIG, 36.5% are going to spend less than in 2010; 30.6% are going to be on par, and a scant 5.6% are looking to spend more. BIG said, “So, while holiday shoppers don’t appear to be reverting to the Grinch-like tendencies we saw during the recession, much like last year, they are shaping up to again be very budget-focused and sale/promotion-oriented.”
Conditions are ripe for more reliance on the internet for holiday shopping – no lines, competitive pricing, no trip to the gas pump, 24/7 hours of operation and free shipping all play a part.
Looking at retail categories that may be in play this season, BIGresearch wrote, “Women’s and Men’s Apparel, Shoes, and popular gift categories such as Toys, Electronics, and DVDs have improved from a month ago, as have Home Décor and Furniture. Results are mixed compared to Sept-10, reflecting consumers’ deflated confidence and increasing pragmatism over a year’s time. Additionally, all categories improve from recession-addled Sept-09. Positive results this month are tempered when compared to pre-recession Sept-07, where categories fail to improve.”
BIGresearch added, “Good little girls and boys might find computers, mobile devices, jewelry, and TVs under the tree this year, as six month purchase intentions have risen for these categories compared to one year prior. Furniture and autos have also improved, while vacation travel and digital cameras remain relatively flat.”
RBR-TVBR observation: It’s looking like another challenging holiday season. We know consumers will be looking for value and convenience, and we also know that increasingly, retailers should be able to really focus campaigns on local customers who don’t want to put a lot of miles on their vehicle.
This is the perfect time for retailers who want to succeed to rely on the services of their local television and radio stations. We’d be pounding home this message incessantly – we have what you want, at a price that you’ll like, and we’re right here in your own backyard.
As broadcasters, it’s your duty to help these retailers out and explain what they need to do to get holiday shoppers through their doors – and how you are just the person to give them the boost they need.
