Consumers Investing in Small Luxuries Again
Consumers are slowly starting to enjoy the same discretionary services or items they may have previously sacrificed because of the economic downturn.
That’s according to a survey, conducted by BIGresearch and featured exclusively in Stores magazine’s February issue, that examines what is “untouchable” and what is “expendable” in people’s lives to adjust to the current economic climate.
Unpredictable economic conditions in 2009 forced many consumers to reevaluate whether their manicures, new handbags and even their cable TV service were worth the expense. With signs of an improving economy throughout 2010, however, many were a lot quicker to say “hands off” when it came to the things they love.
Among the key findings are indications that a few things, including casual sit-down dining, department store shopping and even haircuts have made their way back on the “untouchable” list after falling victim to the “expendable” list the previous year.
“For a large part of the country, small luxuries such as gourmet coffee, casual dining and even high-end cosmetics were among the things many consumers really had to learn to live without,” said Stores editor Susan Reda. “Though most Americans are still quite focused on maintaining a budget, many are once again falling in love with the things they had to temporarily say goodbye to.”
When it comes to surfing the Web and consumer electronics, millions of Americans simply cannot get enough. The survey found eight in 10 (81.5 percent) in 2010 said their Internet service was untouchable – consistent with what the survey found in both 2009 and 2008. As far as upgraded mobile devices are concerned, nearly twice as many people in 2010 than in 2008 (22.9 percent vs. 12.3 percent) said their cell phones, smartphones, tablets and eReaders were untouchable.
While some are affording themselves the option of new shoes or upgraded cell phone service, overall the survey found most Americans are still evaluating their wants versus their needs. According to the survey, traditional discretionary expenditures such as magazine subscriptions, satellite radio and fine dining are still among those on the chopping block. Nine out of 10 in 2010 said fine dining was expendable, the same as 2009, and 85.2 percent in 2010 agreed they could do without their favorite magazine, basically the same as in 2009.
Additionally, department and discount store shopping for apparel have also become increasingly important for consumers. In 2010, one-quarter of respondents said department store shopping was untouchable, up from the 21.4 percent who said so in 2009. While “forever in blue jeans” may be cliché, the survey found that consumers really aren’t willing to sacrifice a new pair of jeans these days (24 percent said new jeans were untouchable in 2010 vs. 20.6 percent in 2009).
When examining gender differences, stark variations exist between the sexes. According to the survey, more men than women in 2010 (33.5 percent vs. 29.9 percent respectively) said they cut back on upgraded mobile/cell phone service, which includes text, video and internet. Also not as high on their priority list – fine dining (62 percent vs. 58.4 percent) and Internet service (12.9 percent vs. 10 percent).
There are quite a few things men acknowledge as off limits in terms of cutting out of the budget, including cable/satellite TV (28.5 percent vs. 25.3 percent of women), clubs or social memberships (11.1 vs. 8.3) and extra-curricular leagues (20.1 vs. 12.5).
The survey of 5,015 consumers was conducted in December 2010. The consumer poll has a margin of error of plus or minus 1.4 percent.
BIGresearch consumer intelligence provides analysis of behavior in areas of products and services, retail, financial services, automotive and media. The American Pulse Survey is collected online twice a month exclusively utilizing SSI’s U.S. panel covering topics such as politics, pop culture and the economy. Over 5,000 respondents participate, providing greater insights into how Americans really feel about issues they currently face.