.

RETAILERS FACE QUALITY-CONSCIOUS XMAS SHOPPERS LOOKING FOR DISCOUNTS --------------------------------------------------------------
e-tailers Will Double Last Year's Sales with More Shoppers Spending More
---------------------------------------------------------------
Annual Xmas Survey Predicts Sales Up 6.2 Percent But Finds Americans Less Optimistic This Year

(NEW YORK) Nov.2, 1999--Packages under the Christmas tree may be nicer this year as shoppers seek quality merchandise, but Americans are slightly less optimistic in the closing months of the millennium than they were a year ago, according to the annual national poll of consumer spending plans by a leading consumer research and marketing strategy firm.

"Shoppers are willing to spend more for quality gifts, resulting in an overall increase of retail sales this Christmas of 6.2 percent, but they will be buying fewer items," said Britt Beemer, Chairman of America's Research Group, the Charleston, SC firm, which has accurately predicted Christmas retail sales for five years in a row. Some of the key survey findings are -

  • Americans plan on spending about $717 on Christmas gifts this year, more than $130 less than last year's estimate.
  • They plan to spend slightly more on individual presents this year, with an average gift costing $35.05. o The number of shoppers planning to spend in the $1,000 to $2,500 range is about half the level of last year (11.7 percent down from 19.4 percent in 1998).
  • 68.8 percent of Americans feel good about their lives, down from 71.2 percent in 1998.
  • If given $1,000 to spend, 26.1 percent of Americans say that they would pay their bills with it rather than purchase something new.

Although shoppers are concerned with the quality of merchandise, they expect less satisfaction in finding what they want (32.9 percent). This contrasts with the perception of consumers last year when 45.6 percent said that the quality of merchandise offered was better than in previous years. Christmas shoppers in 1999 will be looking for sales and deep discounts.

Seventy-two point eight (72.8) percent of shoppers believe that retailers will lower their prices just before Christmas and 78.1 percent believe that 50 percent off is a legitimate discount. "In one the merriest findings of the survey, shoppers on the Internet this Christmas will double in number this year," Beemer said, "and one in eight of all American households will use the Internet for Christmas gift giving."

  • This year 8.3 percent of Americans believed that they would shop on the Internet more, contrasted with 4.6 percent in 1998. o
  • About 10.2 percent of all shoppers say they will definitely purchase over the Internet and 4.2 percent are undecided but "probably will" shop via e-commerce. o
  • These consumers will spend 80 percent more than they did last year on-line or about $180.51 each. Last year, they averaged only $107.17 each.

The "brick and mortar" e-tailers, those which have store locations, will benefit more than pure e-tailers, according to Beemer, as Christmas shoppers on the Internet will look first at the "brick and mortar" e-tailers at a rate of 57.8 percent, while pure e-tailers will get consideration from only 16.7 percent of those shopping on-line.

Sporting goods tops the list of "hot" purchases on the Internet this year (32.3 percent), with books (28.4 percent) and video games (23.6 percent) close behind. Rounding out the top five Internet purchases planned are toys (19.6 percent) and home videos (12.8 percent).

"Christmas shopping has yet to begin with only 10.1 percent of consumers completing their holiday purchases, but shoppers are cautious about what they will find in retail stores this year," Beemer reports. "More of them (66.2 percent) are concerned about the time spent shopping and will go to the stores during the week rather than the weekends to avoid the crowds. In addition, fewer people expect to find helpful employees in stores (65.8 percent contrasted with 72 percent last year). Over half expect stores to be short handed and anticipate waiting in lines."

Top Christmas gift items on Santa's list overall are toys (34.6 percent), women's clothing (26.3 percent), children's clothing (22.9 percent), perfume and cologne (19.1 percent) and sporting goods (18.9 percent). Computer games, including Sony's Play Station and Nintendo, are the most popular toy items (40.5 percent). Doll babies are number two in toys (18.1 percent). Bicycles (17.6 percent), sports equipment (17.3 percent) and hand-held electronic games (16.4 percent) fill out the top five toy preferences.

"Consumers are planning to travel less and entertain at home more this holiday season continuing their cautious outlook," Beemer said. "While 32.7 percent of consumers said they will travel less, only 20.5 percent said they will entertain less, compared to 27.8 percent in 1998." They are also divided on when they will go on vacation with 25.8 percent taking time off after Christmas and 22.5 percent taking it before Christmas.

The survey was conducted by telephone October 29 to 31, of 1000 adult respondents. It has a margin of error of 4.3 percent. This is the sixth Christmas retail business survey conducted by America's Research Group.

Britt Beemer founded America's Research Group in 1979. His research clients, many of the leading corporations of America, including Furniture Brands, JC Penney, Eckerd Drugs, Sealy Mattress, and Barnes & Noble.

Beemer is the author of Predatory Marketing, which provides insight into his 20-year history of helping companies gain market share, published three years ago in hard cover by William Morrow & Co., and in paperback the following year by Broadway Books.

Return to ARCHIVE INDEX

CONTACTS:
Barbara Burns (212) 486 1140
Britt Beemer (800) 723 3253

Copyright © 1998 by America's Research Group