The Empathica Consumer Insights Panel shows that the majority of consumers are now more optimistic about the economy, with a greater percentage indicating they are starting to spend more compared to Q1 2010.
Toronto, Ontario, Canada – January 31, 2011 – Empathica Inc., a leading provider of Customer Experience Management (CEM) solutions to more than 200 of the world’s most respected brands, announced today the economic outlook results of its 2010 Winter Consumer Insights Panel survey that polled nearly 11,000 North Americans.
In light of current economic conditions, Empathica questioned survey participants in an effort to measure spending patterns, consumer confidence levels, economic trends over the course of 2010, as well as future spending intentions.
Despite the fact that overall economic optimism gradually declined over the course of 2010, consumers are increasingly optimistic about their individual financial situations. In fact, in Q4 2010, 42.7% indicated that their financial situation will be better within the next six months. In Q1 2010, only 33.8% of respondents said the same thing. Spending habits have correlated with these results, with 15% of consumers citing they are spending more now than they were a year ago. In the first quarter of 2010, only 6% of consumers reported spending more.
“Having an understanding of consumers’ spending behavior and financial expectations can allow brands to strategically plan certain initiatives moving into 2011,” said Gary Edwards, Chief Customer Officer at Empathica. “For instance, while showing signs of increased optimism, consumers are still relatively skeptical about the economic outlook and their own spending intentions. Coupons, special promotions and incentives continue to be helpful in fueling consumer spending moving forward. Just because more consumers intend to spend, doesn’t mean that frugality is over.”
Retail Spending Across Demographics
Gender differences also played a role in spending trends throughout 2010, with men reporting spending significantly more than women by the end of the fourth quarter. In Q1, only 0.8% of men said they were spending “significantly” more, which, when asked the same question in Q4, was up nearly 10 percentage points to 10.4%. This difference is notable, given that 0.8% of women also reported spending significantly more in Q1, with only 3.9% citing the same in Q4. Similarly, the majority of women (60%) had cut spending by the end of the year, while not even half of men (47%) reported that they cut their spending.
On a national level, a much higher percentage of U.S. consumers cut their spending compared to Canadians during 2010. At the beginning of the year, 67.2% of Americans said they cut their spending in some capacity. In Q4, 55.6% said the same – a difference of 12 percentage points. Canadians, on the other hand, have not been hit quite as hard by the recession. Empathica results show Canadians were significantly less impacted and more consistent in their spending patterns during the year, with 48.4% reporting reduced spending in Q1 and 43.5% citing the same in Q4.
“In all cases, given that brands cannot compete on price alone, it remains important for them to capitalize on new technologies, open up more channels to buy, and to deliver on positive customer experiences that encourage repeat visits,” added Edwards.
Online Versus In-Store Retail Shopping
With today’s brands looking to ramp up campaigns focused on reaching consumers via social media, mobile and online, the Empathica survey asked respondents about their experiences across the different channels. Twenty-percent of respondents said their in-store experiences are often better than online experiences, for retailers that offer both options. Fifteen-percent said online was better, and 36% said both channels offered a consistent experience. The rest were unsure or couldn’t offer an opinion because they only used one channel.
Despite relative consistency across online and in-store experiences, consumers overwhelmingly said they prefer in-store (69%) as opposed to online (22%) for the majority of purchases.
“With brands looking to extend their presence online these days, some fail to acknowledge that remaining focused on in-store experiences is just as important as those that take place out of the brick-and-mortar location,” said Edwards.
Survey results also showed that online comparison shopping is in full force, with 72% of consumers indicating that within the last six months, they used the web to look up a product or compare prices and purchased the item online. The same percentage used the web to comparison shop online and then buy an item in-store.
“It’s no doubt becoming critical for brands to develop a relationship with consumers online, and offering satisfied customers an outlet to express their confidence in and enthusiasm for a brand,” added Edwards. “With consumers frequently turning online to comparison shop, you want your brand to come across as better than the competition. In most instances, online recommendations coming straight from other consumers can make a world of difference. It can ultimately impact the brand in a tremendously positive way.”
For more information about the results of the latest Empathica Consumer Insights Panel survey, visit www.empathica.com/insights/.
About the Empathica Consumer Insights Panel:
The Empathica Consumer Insights serves as an authoritative voice on consumer based economic indicators; the retail, financial services and restaurant industries; consumer shopping intentions and customer satisfaction as reported by thousands of consumers in the U.S. and Canada. Results from Empathica’s Consumer Insights, led by Dr. Gary Edwards and Empathica’s Consumer Insights’ team, are published on a quarterly basis. The results are based on outbound Internet surveys with Empathica’s growing Insights Panel, derived from more than 30 million consumer surveys per year. Results have been weighted to reflect latest Census distributions in the U.S. and in Canada, including Region, Gender, Age and Income.
Aforementioned data is reported by the Empathica Consumer Insights Panel – Winter 2010, Issue 2.