Economy Watch: Holiday Shoppers Willing to Spend But Want Discounts

holiday shoppingRetailers can expect an increase of nearly 20 percent of Black Friday shoppers over last year, and indications are they're willing to spend more. Of those shoppers surveyed, 50 percent reported they would be in stores on November 29 –willing to spend but also looking to save, according to a Christmas & Holiday Shopping Forecast released by America's Research Group and Inmar, 

Even with desire up, the study suggests, it will require deep discounts from retailers to close the deal. Almost a third of shoppers (31.2 percent) say they will be motivated only by 40-50 percent -off sales. Big bargains were important last year at 25.9 percent, but this year they're even stronger.

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"If retailers give consumers mega discounts throughout the season, it will be a very strong season," says Britt Beemer, chairman and CEO of America's Research Group.

Shoppers will also be more active online this year, with 25.8 percent describing themselves as shopping "often" via the Internet. This is up from 17.6 percent making the same self-designation in 2012. But, it won't be all high-tech when it comes to looking for deals and opportunities to stretch holiday budgets. More than two-thirds (67.2 percent) of shoppers will look at newspaper inserts as part of their pre-shopping preparations.

"The circular is still an important tool for shoppers when planning their purchases," says John Ross, president, Inmar Analytics. "Newspaper inserts are convenient, transportable, visually informative, very useful for product and price comparisons and effective in creating excitement regarding a prospective purchase."

According to the Forecast, consumers are loosening up on credit card usage, the survey notes. When asked how they expect to pay for most of their purchases in the coming months, 22.9 percent reported they'll opt for credit card spending – compared with the 16.1 percent willing to borrow last year. This coincides with Americans feeling less pressured from debt. This year, 13 percent described themselves as having to cut back on spending due to bills and debt. Last year, 21.8 percent were taking the same position. The impact this change will have on holiday gift buying will be significant.

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"Good news for retailers. Consumers are feeling better overall this year about their debt, their jobs and they're willing to pull out the plastic," says Beemer. "We're seeing a greater sense of freedom when it comes to spending money, and more saying ‘if I like what I see, I'll buy it." 

As for targeted purchases, electronics will, again, be at the top of many holiday shopping lists. America's appetite for flat panel TVs remains strong with 19 percent of households planning to make a television purchase this year; this number holding steady from last year.

"The big winner is computers," says Beemer, "with 20 percent of shoppers planning to make a PC or laptop purchase in the next three months. That's a big increase over the 14 percent with the same plan last November."

More consumers in the market for these premium consumer electronics will be heading to Walmart for their purchases. Walmart also wins against other retailers when it comes to layaway. Of those shoppers planning to make purchases this season by using store layaway programs, nearly half are choosing to do so at Walmart.

"The success of retail sales for Christmas 2013 now rests in the hands of the retailers who must decide whether getting shoppers in their stores is more important than higher earnings and fewer discounts," says Beemer.

The ARG/Inmar research consisted of 1,000 telephone interviews conducted November 8-11, 2013.


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