Why are Shoppers Busting Budgets this Holiday Season?
Just a year past our noted economic downfall, we’ve managed to shift our thinking when it comes to money. Many of us are on a budget these days, and consumer surveys indicate that the public intends on maintaining their budget throughout the holiday season. Yet the numbers tell a different tale, with consumer spending increasing instead of moving in the other direction. A road to monetary savings was paved with good intentions, but we as consumers somehow got lost along the way.
And it’s only December eighth. There’s still plenty of the holiday shopping season left to weather. How will you and your budget fare, and why are we spending more money than we planned?
Permuto, a company that measures a number of factors to aid online marketers with their campaigns, has given us a peek into the consumer world of shopping for the holiday season of 2009, and it’s barely gotten under way. Permuto’s Active Shopping Report hints that consumers on a budget may not even immediately recognize that they are spending more money this holiday season.
Permuto’s Active Shopping Report shows that consumers with jobs and a sense of personal financial stability (however small that stability may be) will shop more in a down economy, as they try to take advantage of all the deals. Retailers tap into this by encouraging such deal hunting in order to get customers in the door. What appears to be a steal could actually cost you more in the long run.
What Permuto’s report indicates is that consumers could stand to be a little more careful sticking to their budget, but a chat last week with Permuto’s co-founder and CEO Shaukat Shamim brings even more factors to light. The retail and finance industries are working hard to simplify the online shopping process so that consumers are more readily encouraged to actually shop.
Permuto found that retailers were particularly aggressive with their online advertising this year, especially around the onset of the holiday shopping season. Ads and coupons were rampant for Black Friday and Cyber Monday this year, with many promotions beginning a week or so in advance and extending well beyond the typical cut-off for the weekend shopping deals.
Many brands are also working with APIs and using other cooperative efforts in order to make their product information more readily available to online consumer and shopping hubs. This has been particularly useful for mobile shoppers that perform price comparisons and utilize their GPS-enabled devices to do their due diligence prior to making an actual purchase.
Many of these brands’ efforts manage to redirect consumers back to their online hubs, where a great deal of their shopping takes place. Consumers are more willing to purchase online items this year as opposed to previous years as shipping and other added fees are being waived and don’t incur any additional costs.
On the financial side of things, many companies in the industry are making it easier to purchase items online. Identity fraud protection, improved security for online shopping and increased access to one’s bank account has made consumers more comfortable with the overall process.
Combined, we’re seeing several plays for encouraging online shopping. The benefit to retailers comes in the form of savings, with less storage and shipping costs, an other various ways of streamlining their retail process. Banks also see benefits in encouraging online interactions as it keeps currency intangible and limited to the digital realm. For consumers, the increase in convenience means efforts from both retailers and financial institutions are really paying off this holiday season.
Deals are tempting, but consumers should be aware of the fine print, regardless of our economic position as a country or an individual consumer. Sticking to one’s budget can be hard, but recognizing your own personal behavior in regards to budgeting and spending can help foster additional stability for your budget.