The annual Deloitte consumer survey of Christmas spending predicts that Irish consumers will once again be the highest spenders in Europe this festive season. However, the survey finds that for the third year running, Irish consumers plan to spend less this festive season. The annual survey finds that Irish consumers predict that on average they will spend 1.7 per cent less this Christmas. Last year, Irish consumers indicated that they would spend 7.44 per cent less. In 2010, there was a 10.6 per cent reduction planned in spending.
The survey, which was carried out in the second and third week in September, predicts that the average spend per household in Ireland will be €965.80, with an average of €499.60 spent on gifts, €288.30 spent on food and drink and €177.90 spent on socialising. The average figure in Europe overall is €590.90.
The survey provides some interesting insights for retailers around the purchasing strategies and the importance of a multi-channel strategy as we enter the festive season.
Unsurprisingly, price is now the decisive factor for the vast majority of Europeans (92 per cent) when it comes to purchasing decisions. Irish consumers have indicated that they will do the following to ensure their spending is kept in check:
44 per cent of Irish consumers will buy more products and gifts that are on sale
30 per cent indicate that they will focus more on buying less expensive gifts
29 per cent will shop more at less expensive stores
In 2012, Irish consumers plan to make fewer purchases using credit. Over a half of respondents indicated that they plan on reducing their exposure to loans from family, specialised consumer credit loans and credit from retailers this festive season. 42 per cent of consumers plan to use savings for a larger proportion of their purchases than in 2011.
In addition, over a third of those surveyed in Ireland plan to increase their usage of loyalty point schemes. In terms of loyalty schemes, Irish consumers have indicated that their preference is for schemes which earn points offering vouchers to spend in the store (24 per cent) or with several retailers (24 per cent). There is also a strong preference for immediate discounts (23 per cent).
Encouragingly, Irish consumers are also more likely in 2012 to support the local economy, with 65 per cent indicating that they will buy locally made products, up from 58 per cent in 2011.
This year the survey identified the ways in which Irish consumers search, compare and buy products. 43 per cent of respondents indicated that they use both websites and stores for searching for products and 55 per cent use both for comparing products. In terms of buying products, 72 per cent of respondents indicated that they will buy in-store, while 28 per cent will use both e-commerce and m-commerce methods of purchasing.
In terms of using a mobile phone to buy a product, a quarter of Irish consumers have indicated that they have already done so, while nearly a half (47 per cent) indicated that they will do so in the future. Payment security was identified as the biggest deterrent to purchasing gifts via mobile phones.
Of those Irish consumers who indicated that they will be using social media, 64 per cent will do so to find discounts, 61 per cent will do so to read reviews and 51 per cent will do so to research gift ideas.
When asked what retailers should invest in to improve their shopping experience, the top three areas identified by Irish consumers were lower prices, customer relationship and e-commerce for ease of comparability.
Retailers who can match their offering to these consumer preferences will be the winners this festive season.
Richard Howard, Partner, Deloitte