Deloitte: Holiday season looks bright, especially online
New York – Despite many forecasts of a gloomy holiday season for retailers, Deloitte is predicting an increase in consumer spending. Deloitte’s 28th annual survey of holiday spending intentions and trends indicates shoppers surveyed plan to spend an average of $421 on holiday gifts this year, up from $386 last year. They also expect to buy an average of 12.9 gifts, ending a five-year decline in the number of gifts they plan to purchase.
The amount consumers plan to spend on non-gift items for themselves or their families rose 14% from 2012, while spending on home and holiday furnishings jumped 25% from last year. In addition, 54% of consumers believe the economy is on the rebound, an increase of 22 percentage points in the past two years.
The Internet moved into the top spot among holiday shopping destinations for the first time in its 15 years represented in the survey, bumping discount/value department stores from the No. 1 position. Nearly half (47%) of consumers plan to purchase items online, followed by 44% at discount/value stores. More than three-quarters (76%) of consumers cite convenience as a reason for shopping online, followed by price (63%).
The omni-channel shopper is most likely to make retailers’ spirits bright. Those who shop a combination of store, Internet and mobile channels plan to spend a total of $1,643 on the holidays, 76% higher than those who shop in the store only. Nearly eight in 10 (77%) consumers say that if a product is not available on a store’s website, they will go elsewhere, while only 13% would go to that same retailer’s store. In addition, 45% of all respondents indicate they would switch to an entirely different store chain or website if they can’t find the desired item in a retailer’s store.
Other findings include:
- Nearly three-quarters (73%) of consumers say their holiday spending will be influenced by coupons or promotional offers.
- More than seven-in-10 (71%) say they plan to take advantage of free shipping offers, while nearly half (47%) expect free returns. More than four in 10 (44%) shoppers intend to take retailers up on price-matching guarantees, 36% will shop extended hours and 35% plan to order online for in-store pickup.
- Retailers may also have good reason to roll out the promotions early this year: the number of consumers who say they expect to complete the majority of their shopping by early November (30%) rose five percentage points from last year. One-quarter (25%) of consumers plan to shop on Black Friday and 24% plan to do so on Cyber Monday. Forty-five percent indicate that Black Friday isn’t as important as it used to be.
"The survey reveals a brighter consumer spending outlook than we’ve seen in several years," said Alison Paul, vice chairman, Deloitte LLP, and retail & distribution sector leader. "Consumers are feeling more generous about gift spending, and we are encouraged by their plans to spend more on going out for celebrations, decorating their homes and treating themselves and their families to ‘early gifts’ while holiday shopping this year. The government shutdown and debt crisis had the potential to dampen consumer sentiment, however, the settlement likely averted any significant impact on the holiday season. The timely resolution of those issues may also give consumers an extra confidence boost just as promotions start hitting the stores and the shopping season gets underway."
Whirlpool raises full-year guidance following third quarter results
Following third quarter results, Whirlpool is increasing its full-year diluted earnings per share guidance to $10.45 to $10.65 from the previous range of $10.05 to $10.55, and its full-year adjusted earnings per share to $9.90 to $10.10 from the previous range of $9.50 to $10.
The company reported net earnings of $196 million for the quarter, or $2.42 per diluted share, compared to net earnings of $74 million, or $0.94 per diluted share, reported during the same period last year.
Adjusted to exclude the impact of foreign currency and Brazilian tax credits, diluted earnings per share improved to $2.72, compared to $1.80 in the prior year, mainly driven by higher revenue, ongoing cost productivity and the benefit of cost and capacity-reduction initiatives.
Sales in the quarter were $4.7 billion compared to $4.5 billion reported during the same period last year. Excluding the impact of foreign currency and Brazilian tax credits, sales increased more than 5%, led by strong growth in North America.
"We continue to execute on the plans we set out at the beginning of the year," said Jeff M. Fettig, chairman and CEO. "Our innovative products and industry-leading brands are driving increased consumer demand and revenue growth. That growth, combined with our actions to increase margins, is translating into record earnings."
Whirlpool North America reported third-quarter sales of $2.6 billion compared to $2.4 billion in the prior year, an increase of more than 8%. The region reported operating profit of $289 million, 11% of sales, compared to $227 million, approximately 9% of sales, in the prior year. Higher sales, ongoing productivity and the benefit of cost and capacity-reduction initiatives more than offset higher material costs and investments in marketing, technology, and products.
The company now expects full-year 2013 U.S. industry unit shipments to increase by approximately 9%.
Whirlpool markets Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Brastemp, Consul, Bauknecht and other major brand names to consumers in nearly every country around the world.
Accenture report finds $1.3 trillion of revenue at play in today’s ‘switching economy’
New York – Despite having more data and insights into consumer desires and preferences, companies in the U.S. have failed to meaningfully improve customer satisfaction or reverse rising switching rates among their customers. As a result, there is a potential $1.3 trillion of revenue at play in the U.S. market represented by the ‘switching economy’, according to new research released by Accenture.
The research revealed that 51% of U.S. consumers switched service providers in the past year due to poor customer service experiences, up 5% from 2012. Switching rates were highest among retailers, cable and satellite providers and retail banks, making companies in these sectors the most vulnerable, but also giving them potentially the most to gain.
The survey found that customers are increasingly frustrated with the level of services they experience: 91% of respondents are frustrated that they have to contact a company multiple times for the same reason; 90% by being put on hold for a long time; and 89% by having to repeat their issue to multiple representatives. There are also frustrations with marketing and sales practices: 85% of customers are frustrated by dealing with a company that does not make it easy to do business with them; 84% by companies promising one thing, but delivering another; and 58% are frustrated with inconsistent experiences from channel to channel.
Other findings include:
- Overall customer satisfaction fell by 1% since 2012, while customer loyalty rose 1% and willingness to recommend a company rose 2%.
- 81% of customers who switched providers in the past year said the company could have done something differently to prevent them from switching, with customer service equally important as price.
- 48% of U.S. customers use third-party online sources, such as official review sites, and 25% use customer reviews and comments from social media sites, to find out information about a company’s products and services.
- 71% of customers use word-of-mouth.
- 75% of respondents now use one or more online channels when researching companies’ products and services and 33% use mobile devices to access these online channels.
- 82% of customers say they feel companies they buy from cannot be trusted on how they use personal information provided to them.
“Changing customer behaviors in the digital marketplace and low levels of customer satisfaction are fueling a switching economy that presents opportunities as well as threats. But too many companies are playing not to lose instead of playing to win in this switching economy,” said Robert Wollan, global managing director, Accenture Sales & Customer Services. “Growth is harder to come by in many sectors but the switching economy presents a source of new, sustainable, profitable growth for companies that are playing to win and gain market share. To win requires an aggressive approach that goes beyond implementing technology to creating genuinely engaging customer experiences that today’s nonstop customers are seeking but obviously not finding with their current providers.”