Scrooge Hasn’t Left the Building
Consumers are increasingly willing to indulge their “wants” over their “needs.” In a Big Research survey, 54.1 percent said they are focused on necessities. While still high, it’s three percentage points lower than in October and a point lower than a year ago.
But other surveys have contradicted that finding. The ARG/UBS survey found those buying something nice for themselves at an all-time low of 28.6 percent. (Compare that to the 49.4 percent of 2002.)
Such conflicting signals are setting up this season to be a nail biter—right to the bitter end, as many consumers are expecting to hold out in the hope of steeper discounts closer to the holiday.
Who Wins, Who Loses?
Dollar stores and discounters will remain popular places for bargains and for those strapped for cash. Meanwhile, high-end retailers will likely benefit from increased spending on luxury goods.
But what happens to those in the middle? They’ll have to draw on the loyalty of their customers and look for creative promotions.
Gerzema expects companies expressing the right values will succeed. Brands like ETSY, which offers “handmade” Christmas gifts, strike the right chord with consumers who want to be more self-reliant.
Others such as Zappos.comwill be hailed for their customer service, while brands like FootLocker will suffer, Gerzema said. He also expects premium brands, like Burberry and Theory, to triumph over mass-market mainstays, such as Gap’s Old Navy.
Electronics also are expected to be hot this year. A survey by the Consumer Electronics Association found that consumers will spend an average of $232 on gadgets and gizmos. That’s a five-percent improvement over 2009—and the highest ever in its 17 years of tracking spending habits.