Turmoil, Deals and Sociability
As we prepare for the 2011 holiday season, online and offline data confirm what we already know: consumers willingness to spend this year is up in the air.
It was reported last year that Americans were spending like it was 2007 again at the end of the holiday season. Analyzing the traffic to online retail sites for the 2010 holiday season, data from Experian Hitwise, a division of Experian Marketing Services, told a promising story. Black Friday traffic surged more than 13 percent above that of the previous year, for example. By the day after Christmas, however, that gain had eroded to only 3 percent. Fast forward to the week ending May 28, 2011, when visits to the top 500 retail websites was up only .5 percent from the previous year.
One of the challenges in equating online traffic data with our nation's economic health is that in good times visits to online retail sites increase as consumers are more likely to open their wallets. When times are tough, visits to online retail sites, you guessed it, also go up as consumers leverage the web as a tool to shop for better prices, stretching their spending dollars. At Experian Marketing Services, we've created our own Consumer Expectation Index to help unravel how consumers are truly feeling about their economic future.
We've added the ability to view that data through specific lenses, such as the economic outlook of U.S. consumers that identify themselves as online purchasers. For this year's first quarter, our Consumer Expectation Index for all U.S. adults has ranged between 87.8 and 96.8 (the index's baseline of 100 was set in 2004). During that same time period, adults that have identified themselves as online purchasers ranged from 89.9 to 99.2. If you examine the history of the overall index compared to online purchasers, you'll find an interesting pattern. Historical data surrounding consumers economic expectations reveals that prior to the summer of 2008 and from the first quarter of 2010 the subset of consumers who purchase online have traditionally been more optimistic about the economy than the population in general.