Consumers say that their average household holiday budget will rise 5% this year, according the 2002 American Express Retail Index on holiday shopping, a national consumer poll.
This year’s holiday budget is expected to be $1,656, a modest increase from the $1,564 projected in 2001. The 2002 number is still below the annual survey’s 2000 projected high of $1,684. This year, consumers appear cautious and describe much of their purchasing as being driven by practical considerations, such as sales and bargains.
The 2002 American Express Retail Index shows that consumers plan to spend:
· $1,073 on gifts, up $29 from last year
· $238 for holiday entertaining, up $22 from last year
While consumers indicate that they will spend more this holiday season than last, the Index shows that more shoppers this year are setting budgets for their purchases—65%, up from 60% last year. And new evidence suggests shoppers are waiting and watching for sales and special promotions. Significant numbers of consumers (86%) say sales will drive their shopping decisions. Internet shoppers, in particular, are looking for bargains. Of those consumers who say they will make purchases online, 95% indicate that they will be looking for bargains.
Another indication of this trend toward thrifty and prudent shopping is the rising number of early bird shoppers-those who began holiday shopping right after last year’s season had ended. This group has nearly doubled this year to 11%, up from 6% in 2001. January and February are typically times when consumers can pick up bargains.
Half of all consumers (48%) say the word “practical” best describes their gift-giving style this holiday season-significantly more than those who say their gift-giving style will be “meaningful” (24 percent), “fun and whimsical” (15%), “sentimental” (8%), or “lavish” (1%).
“Consumers appear willing to spend money this holiday season, but with an eye towards deals and bargains,” said Paul Dottle, senior vice president, retail industries, American Express. “Retailers that can deliver the most value to these shoppers will be the big winners this year.”
Though consumers will be searching for bargains this holiday seasons, most (61%) say the economy will not influence their gift-buying decisions. Less than a third (30%) say the economy will have a negative effect and, as a result, they will budget less this year than last.
Clothing and accessories top most gift givers’ lists cited by 89% of shoppers, the same percentage as last year. Other popular gift items include gift certificates, cash or gift checks (72%), music, tapes, CDs or DVDs (70%), toys and games (66%), perfume and cologne (53%), books or magazines (51%), tools (39%), home furnishings (34%), computers and accessories (31%), experiential gifts such as a night out or spa visit (27%), health or sports equipment (26%), gourmet food (22%), patriotic gifts (19%), and career accessories (15%).
For the most part, what consumers want to receive for the holidays and what they plan to give are comparable. The Index identifies the top three gifts Americans want to receive this year are clothing (76%), gift certificates, cash or gift checks (72%), and music, tapes, CDs or DVDs (54%). While travel-related gifts – such as a vacation, airfare or other trip component – ranks sixth on Americans’ wish lists (38%), only 6% of Americans say they plan to give this gift.
Category winners in this year’s Index include books, rising to 51%, up from 44%, and experiential gifts, chosen by 27%, up from 20%. Toys and games dropped to 66% from 72%.
Index findings about the most popular shopping destinations are similar to last year’s results. Nearly nine in 10 shoppers (86%) plan to visit a mall or shopping center, the same percentage as in 2001. In addition, 64% of consumers plan to visit, stand-alone stores, 35% will utilize catalogs and 32% will visit factory outlet villages.
Mass merchandisers, such as Wal-Mart and Target, were cited as the most popular retailers by 79% of consumers, nearly identical to the 81% who chose them in 2001. Other survey results mirrored last year’s finding. Seventy-three percent of shoppers will visit department stores (vs. 76% last year), 55% will visit toy stores (vs. 61 percent), 54% will visit bookstores (vs. 51%), and 53% will shop in music and video stores (vs. 54%). Other popular retailers include discount department stores (48%), specialty clothing stores (45%), sporting goods stores (44%), electronics stores (43%), and warehouse clubs (38%).
Forty-six percent of shoppers will use the Internet this holiday season, up from 42% in 2001. Twenty-seven percent will browse for gift ideas, 26% will compare prices, 18% will purchase gifts, and 18% will send cards and/or photos electronically. These numbers are comparable to last year.