Performics Study: Generations X and Y, e-Commerce Assisting the Economic Recovery

December 16, 2009

Younger generations report increased spending, greater optimism about the future; Consumers’ use of the Internet fuels smarter, more informed spending

CHICAGO – Performics today released its eighth month of consumer behavior findings from its “2009 Online Buyer Economic Trend Study.” The findings show Generations X and Y (consumers age 18 – 44) assisting the economic recovery by continuing to splurge in 2009 on certain types of purchases and looking to the future with optimism.

As the year draws to a close, Performics questioned consumers about their confidence in their economic situation and areas where they may have splurged in 2009.  We also analyzed recent behaviors across age groups. On average, more than half of the respondents think their current household economic situation is the same or better this year compared to their situation a year ago. While consumers cut back on a variety of expenses in 2009, rising consumer confidence throughout the past two months has positively affected reported spending, while the disparity of behaviors and attitudes among age groups has clearly emerged.

“We hoped we would see this positive shift in consumer confidence months ago, and that was part of the reason for Performics’ extensive eight-month study of consumer behavior and attitudes during the recession,” said Michael Kahn, SVP of Marketing at Performics. “The study’s November findings indicate a substantial uptick in positive attitudes, shopping behavior and buying intentions, with younger generations, Gen Y and Gen X, fueling the optimism behind this uptick.”

Surprisingly, Generations X and Y splurged more than any other age group in 2009, despite one of the worst economic years in decades.  While three out of four (76 percent) consumers said they still splurged in 2009, consumers ages 18-44 splurged more than those ages 45 and up in all 11 categories we surveyed. Categories that topped the list of splurges for the younger generation were apparel, travel/vacation, shoes and movies at the theatre.

Looking ahead to 2010, Generations X and Y show greater signs of increased spending. In fact:

• 18 percent of those ages 18-44 expect to spend more overall in the next 60 days than in the same period last year, vs. 13 percent of those ages 45 and up
• 24 percent of those ages 18-44 expect to spend more online in the next 60 days than in the same period last year, vs. 10 percent of those ages 45 and up

“Regardless of who spent money offline or online, consumers were emphatic about the Web’s role in helping them make smarter purchase decisions in 2009,” added Kahn. “Consumers have long turned to the Internet to check prices and identify the best products to buy and merchants to patronize, but this year’s economic situation pushed this practice front and center. As we expected, consumers will gladly conduct some online research to save a few dollars here and there, let alone to save hundreds or thousands on big ticket items.”

Online price checking can reduce the likelihood of buyer’s remorse for a consumer either by confirming a good deal or identifying a better one, and this rang true for all age groups. When it comes to finding the best deals, nearly half of consumers found the best deals online. In fact, 45 percent of respondents said they found the best deals online in the past month versus only 34 percent of respondents who said they found the best deals in-store.

Also true for all age groups, consumers identified select elements of a website that positively affect their willingness to purchase online. Some of the key factors included:

• Free shipping: 85 percent are most likely to purchase from a website offering free shipping
• Free returns: 75 percent are most likely to purchase from a website offering free return shipping
• Home page discounts: 66 percent said these increase the odds they will buy
• Consumer generated reviews: 53 percent reported a greater likelihood to buy

Performics commissioned ROI Research to conduct this study, consisting of monthly surveys from April through December 2009. The November survey was conducted over a two-day period among 300 consumers who have made an online purchase in the past six months. The study collects consumer data each month to track and document changes in consumers’ attitudes and behaviors in light of the current economy and includes additional topical questions with each monthly survey. Specifically, the study tracks the ongoing impact of the recession on online purchases and shifts in the use of the channel.  

For complimentary copies of a November findings overview, please contact Addie Reed at: areed@preturn.com.