Study: Half of consumers to buy luxury items in next six months
New York — Survey results released Tuesday by Accenture found that half of U.S. consumers are likely to make a small luxury purchase in the next six months, including 53% who are likely to purchase specialty food or drinks, 48% to purchase luxury clothing and 48% to purchase luxury personal care products.
According to the Accenture Luxury Shopping Survey, which polled more than 2,000 U.S. adult consumers, splurging on a small luxury is the number one reason consumers buy specialty food or drinks, selected by 53% of those who expect to make these purchases in the coming months.
Similarly, high-low fashion is the top reason shoppers shop luxury apparel. More than half (57%) of those who intend to purchase luxury apparel will mix a few luxury items into a wardrobe of more affordable clothing.
“As consumers show an increasing willingness to splurge on luxury, retailers and brands can build loyalty by offering a strategic selection of smaller-ticket luxury items to complement their more significant products,” said Tom Jacobson, managing director of the Accenture Pricing & Profit Optimization practice.
In each of the three small-product categories polled, consumers indicated a strong preference for brick-and-mortar stores when shopping for luxury goods:
- On average, 36% prefer to shop in a physical store, while 19% prefer to shop online.
- Among those likely to purchase luxury food and drink, 50% prefer shopping at specialty grocery stores and 40% like shopping at mass retailers, while only 19% prefer to shop at online-only retailers.
- The top reason for shopping in physical stores is to see all the choices in person (38%). Nearly a third (30%) of shoppers in this category prefer online retailers to get the best price and one-quarter (25%) value the convenience of online shopping.
- For those who are likely to make a luxury apparel purchase, more than half (58%) picked department stores as their top choice, compared with only 29% who prefer a department store’s website and 36% who prefer online-only retailers.
- The top reason given for choosing the physical store is the ability to touch and feel the products, selected by 49%, whereas online retailers are preferred for finding the best deal (37%).
- Physical stores beat online shopping two-to-one for luxury personal care products (including hair care, skin care and makeup): 44% of shoppers in this category prefer drug stores and 40% prefer department stores, compared with 22% who prefer online-only retailers.
The study also found that showrooming, or viewing a product in a store and then going online to make the purchase, plays an important role in luxury purchases. In the past six months, one in five consumers visited a store to experience a luxury product in person and then purchased the product online.
Additionally, the study found that having access to special deals and bargains through group membership shopping sites has invited more luxury purchases. Among the 23% of consumers who have bought luxury goods and services from an online group that offers exclusive discounts to members, 58% say these sites have increased their luxury spending.
The Accenture survey identified a number of differences between Millennials and Baby Boomers when it comes to luxury shopping. More than a third (35%) of Millennials indicated their likelihood to purchase luxury goods is up over the past year, while 46% of Baby Boomers indicated their likelihood to purchase luxury goods has decreased in the past year.
The survey found quality is ranked the most important factor by 75% of consumers when buying luxury, followed by price at 69%. Only a quarter ranked brand name as most important.
Consumers increasingly optimistic about economy
New York — Experian Marketing Services said Monday that its Consumer Expectation Index shows an increasing optimism about the economy. According to the CEI, U.S. consumers’ forward-looking view of the economy is at its highest level since the onset of the recession. During the first half of 2012, the average CEI figure was 92.7, which is above the index’s average of the first six months for each year dating back to 2008. The 2012 figure measured eight points above those for the first half of 2008 and one point over those for the first half of 2011.
The CEI figures for the first half of 2012 show confidence among consumers planning to buy a new home within the year at its highest level since the onset of the recession. During the first half of 2012, the average CEI figure was 100.4, which is above the index’s average for the first six months for each year dating back to 2008. The 2012 figure measured 2.5 points above the first half of 2011. On a related topic, the CEI of those intending to refinance over the next 12 months was 4.3 index points above the first half of 2011, or 5% higher.
The same trend held true for consumers looking to buy or lease a new automobile, as the first half of 2012 showed the average CEI figure was 98.2, which is above the index’s average of the first six months for each year dating back to 2008. The 2012 figure measured 4 index points above the first half of 2011.
According to Experian Marketing Services, as we head into the 2012 holiday season, numerous events and factors could affect consumer confidence, but the latest CEI figures indicate the potential for a strong seasonal performance for retailers. The CEI figure for the week of Sept. 3, 2012 (the most recent single week for which data is available) was 7.4 points higher than it was at the same point last year and higher than it has been heading into the holiday season since 2008.
Further, key consumer groups are even more optimistic. On Sept. 3, the CEI of those adults who made an online purchase in the past year was 2% higher than the national average and 8.1 points higher than the CEI recorded for online shoppers at this time during 2011. This holiday season also could be very good for brands and retailers with big-ticket items to sell, since the CEI among adults planning to make a big-ticket purchase hit 117.9 the week of Sept. 3, 2012, compared with 103.5 the same week in 2011 and 100.5 in 2010. In fact, a CEI above 100 indicates that consumers are more confident than they were during the base line period, which was the first half of 2004, years before the recession began.
Couple those figures with a 6.9 CEI point increase year over year among full-time-employed consumers and these appear to be good indicators heading into the holidays, as the CEI tends to have a seasonal peak around Christmas and the holiday time period.
“The figures are pointing to increased optimism as we head into the 2012 holiday season,” said Bill Tancer, general manager of global research, Experian Marketing Services.
ShopperTrak: 10 best holiday shopping days
Chicago — ShopperTrak released a forecast on Tuesday that indicates certain days during the holiday shopping season will be quieter than others. The "10 best days to shop," according to ShopperTrak, are those with the least amount of foot traffic in stores. The weekdays after the busy Thanksgiving weekend top the list.
"This holiday shopping season — November and December — will be busier than in 2011. More shoppers will visit more stores," said Bill Martin, ShopperTrak founder. "But even though consumer demand will increase, retailers still will offer plenty of specials and discounts. The 10 lightest shopping days, in terms of foot traffic, will present an opportunity for shoppers to secure the best customer service and potentially the best deals."
These best days to shop will be Monday through Thursday following Thanksgiving weekend, with Tuesday, Nov. 27, taking the top place.
During the Black Friday weekend last year, 684 million store visits resulted in $20.8 billion in retail purchases. ShopperTrak predicts this Black Friday (Nov. 23) will again be the holiday season’s top-performing day for both retail foot traffic and sales.
After this burst of spending, most shoppers will temporarily reduce their shopping visits. Those who do return to stores Nov. 26-29, however, will be rewarded, as eager retailers will have more time to devote to individual customers as they inspect the sale merchandise.
"Black Friday is not for the faint of heart," said Martin. "Shoppers must brave the crowds to take advantage of good deals. If they can venture back out after just a few days, however, they’ll have the full attention of store employees and plenty of remaining discounts."
Resting after a shopping spree like Black Friday may feel prudent, but don’t wait too long, advised Martin. The "last-minute" crowds start to shop during the two weeks leading up to Christmas. Rounding out the 10 lightest days are Monday, Dec. 10, and Tuesday, Dec. 11. After that, the check-out lines grow and the parking lots fill. In fact, the following Saturday, Dec. 15, will be the third-busiest shopping day of the holiday season.