European results Deloitte year-end consumer survey: consumers focus even more on prices

Diegem, 8 November 2012 – The 2012 Xmas survey is Deloitte's 15th annual look at what European consumers will be buying for the year-end holidays. Average year-end holiday spending in Belgium will be 559 Euro, a small increase (2.7%) in line with inflation, compared to last year's actual spending during the year-end period. Consumers are showing significantly more price sensitivity and will accordingly be seeking more information before purchasing, particularly on the Internet, and will combine retail channels to find the best gift at the best price. Many consumers will continue to prefer useful and educational gifts this year. The Belgian results of the Deloitte Christmas study will be announced on November 22.

The 2012 survey covers 18 European countries. A representative sample of consumers (18,587 in all) was surveyed during the second and third weeks of September to see how consumers intend to spend on gifts, food and beverages for holiday meals, and entertainment.

With the outlook for the economy still uncertain, European consumers are still pessimistic overall

Europe's debt crisis continues and the various steps that European governments have taken to reduce public deficits continue to weigh on consumer morale.

As Koen De Staercke, Deloitte's Partner in charge of the Retail & Consumer Goods business explains: "Given this apprehension of the future, consumers are weighing their purchase decisions more carefully and are becoming more price-sensitive. Although there is still a strong desire to enjoy Xmas festivities, consumers are being careful about how they spend their money."

In 2012, Belgian consumers plan to spend an average of €559 on holiday spending, an increase of 2.7% over last year's actual spending.

Gift purchase decisions focus mainly on utility and price

Most Europeans would prefer to receive gifts of cash and books and will receive books, cosmetics or gift vouchers – books remain the gift that is given most frequently bought. Although trips, computers and smartphones are among the Top-10 gifts that Europeans want most, they are not in the Top 10 of gifts actually offered. This gap has widened most notably for tablet computers and smartphones, which consumers wish to receive 5 to 6 times more than they will actually be offered, compared to a ratio of 2 in 2011.

This trend is confirmed by 64% of European consumers who say that learning and educational content is their main consideration when purchasing a toy, board game, puzzle or book for a child. As was the case last year, the most popular gifts for teenagers are video games, cash and books. Gift vouchers are still very popular, after several years of steady growth.

Although gift vouchers are among the Top 10 gifts offered, European consumers observe that they are not always very practical and point out that they sometimes forget to use them or that vouchers do not enable them to choose what they want. However, the shortness of the validity period is mentioned less frequently.

The essential role of price

Consumer purchasing behaviour has changed considerably since 2008 and the priority now is clearly toward finding a useful gift at the best possible price. This trend has been reconfirmed in 2012, with price even more important.

Although 87% of European consumers feel that a gift's utility is very important, price has become essential for 92%. For example:

More spending trade-off decisions

As was the case in 2011, to preserve their Xmas budget European consumers will be spending less on leisure and entertainment (33% of respondents), holidays (29%) and clothing (33%). This shift in spending will tend to vary in intensity and nature between countries, with:

Europeans say they are willing to spend less on two new budget items in 2013: multimedia (Internet, cable TV, telecoms, etc.) and everyday purchases (lunch, transportation, magazines, etc.)

The cross-channel trend continues

Over 40% of European consumers use both the Internet and physical stores to find and compare products. 33% will actually purchase gifts over the Internet. Most consumers therefore continue to buy in brick-and-mortar stores.

What consumers like about the "cross-channel experience" in particular is that they can use the respective advantages of e-commerce and physical stores to optimise their purchasing:

To find and compare products online, consumers use retailer websites, search engines and manufacturer websites, in that order of preference. Koen De Staercke indicates: "What consumers like about the "cross-channel experience" in particular is that they can use the respective advantages of e-commerce and physical stores to optimise their purchasing. Implementing a true cross-channel strategy built on an integrated customer relationship will therefore give retailers a decisive competitive advantage."