Overall Household Economic Situations Show Signs of Improvement; Consumers Still Cutting Back on Dining Out, Apparel, Non-Essentials

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Overall Household Economic Situations Show Signs of Improvement; Consumers Still Cutting Back on Dining Out, Apparel, Non-Essentials

Posted by Andrew Caravella, Corporate Communications

Fifty-seven percent of consumers say their household economic situation is the same or better; 52 percent expect to spend same or more in next 60 days

Performics today released its third month's consumer behavior findings from its "2009 Online Buyer Economic Trend Study."

Three months into the study, online and off-line consumers continue to forecast decreased spending this year, with cut backs on non-essentials and falling income as the primary reasons for this behavior. However, 57 percent of respondents say their household economic situation is either the same or better than it was at this time last year, up from 47 percent in April.

A variety of factors contribute to these consumer feelings. For example, in April, 17 percent of respondents indicated a lack of confidence in the economy as a reason for spending less. Since then, however, the number has dropped dramatically, to nine percent, indicating that while consumers continue to keep their belts tightened, a more positive outlook may be on the horizon.

"Consumers remain wary of today's economic situation and are behaving very carefully, making calculated purchase decisions across many types of goods and services," said Nick Beil, CEO of Performics. "Some signs point to improvement, though. We've begun to see attitudes changing, and behavior typically follows suit. Until these attitudes more significantly impact behavior, however, marketers should continue catering to the thriftier, calculating consumer."

The June survey asked specific questions about spending on popular purchase categories, including entertainment and personal items. In general, consumers are cutting back most in the following categories:


§  Dining out (69 percent)

§  Fashion Accessories (67 percent)

§  Shoes (65 percent)

§  Apparel (64 percent)

§  Online Music Downloads / CD's(63 percent)

Besides cutting back, many consumers are eliminating spending altogether on concerts/theatre (28 percent) and sporting events (28 percent). This most recent survey also asked about specific tactics for saving money, including using coupons and trading down for cheaper substitutes:


§  Fifty-four percent of respondents use coupons for personal care products and more than one-third use coupons for dining out.

§  Respondents are most likely to trade down for cheaper substitutes to save money when dining out and buying personal care products.

"When consumers start to make spending increases again, marketers of all types of products and services will still need to be realistic about what lies ahead," said Beil. "This financial meltdown not only made consumers reign in their spending and hunker down to get through this period; it also changed the way consumers will approach spending for many years to come. An increased emphasis on saving and responsible spending is likely here to stay, at least according to respondents."

For the third consecutive month, the study asked pointed questions about consumers' online buying behavior, including considerations for major purchases and spending plans.


§  As in April and May, two-thirds of respondents say the recession has fundamentally changed the way they think about saving and spending money.

§  Respondents also say the recession will have a lasting impact on saving and spending habits, with 8 in 10 saying somewhat/strongly agree in each of the three months of fielding this survey.

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

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