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Good News: Consumers Ready to Splurge


People Think Their Neighbors Are Ready to Spend More

An interesting survey was conducted by Market Force Information recently, which found that consumer spending appears to be brightening. That's a good thing for businesses of all sizes.

The survey was conducted in early December with about 3,000 respondents ranging in age from 19 to 72. It reflected a broad spectrum of income levels; approximately half have incomes of more than $50,000 a year. Approximately 75% were women, which the firm deems primary household consumer purchasers. Half have children at home.

When asked if they plan on splurging on an item in the next three months, 65% said yes. Most intend to "splurge" on electronics, travel, and apparel. Here are the top ranked splurged items in order of popularity:

- TV/Blu-ray/DVD/Accessories 14.74%
- Travel/Vacation 13.89%
- Computer/Accessories 11.49%
- Apparel/Shoes/Purse/Jewelry 9.60%
- Entertainment/Video Games/Music 6.20%
- Car/Accessories 5.30%
- Furniture 5.25%
- Home Improvement 5.15%

"Equally heartening was their response to the question, 'Will you watch every penny in 2010, relax the purse strings a bit, or spend more freely on the things you want?' While 1 in 4 consumers responded that they would relax the purse strings a bit more and/or spend more freely, that figure jumped to one-third of consumers when asked to guess what their friends and neighbors will do (as shown in the graph)," says Market Force.

Consumers Ready to Splurge?

"This disparity is often an early sign of an attitude shift," the firm says. "In today’s climate when being frugal is considered an important personal attribute, consumers are not inclined to tell strangers that they plan to splurge or increase their spending. But, if consumers are asked what they think their friends or neighbors will do, they have no such restraint. This question can often indicate likely behavior as attitudes begin to shift."

The survey did find that there is still plenty of caution. 2/3 said they would spulge, but the same amount said they were planning on cutting back in one or more areas—focusing their spending on things that they really want.

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About the author:
Chris is a content coordinator and staff writer for SmallBusinessNewz and the iEntry Network. Subscribe to SmallBusinessNewz RSS Feeds.

Comments

Good news indeed

Sounds encouraging - and interesting that human psychology suggests we think others will relax their spending attitudes before we do it ourselves!?!

Cash or Credit?

Although the news is indeed good - or better anyway - the questions are:

1. How long will the spending continue?

2. What kind of spending will they do?

We overall had a good December. Up over 2008. However the year itself is going to be slightly down.

What are consumers going to consider as "got to haves" vs. "need to haves"?  And even beyond that, and I think more importantly, how will we retailers react? Will we - our compadres - continue to commoditize our respective niches by lowering prices & margins. Or will we go back to adding value - and therefore profit (something that Pres. Obama thinks we can do without) - to our products and companies?

Time will tell. Happy Boxing Day!

I find no disparity

Being frugal during hard economic times is typical and so is distrust of others. I find no disparity here or attitude shift. People just don't want to tell others their business, especially when the enconomy is struggling. That's why safety and security items such as the ones on my web site do very well now. Thanks, Chris.

The spends have gone up due

The spends have gone up due to two reasons—one, firms have started fearing a slowdown in rural demand and some pockets of urban market, so in order to increase awareness, they (companies) spent more. Second, savings resulting from low input prices have helped,

Home Improvement only 5.15%?

I am surprised to learn that home improvement was at the bottom of the list of splurge items. We have been doing tons of window film installations for people's home windows since the tax credit was initiated here in Toronto, (Ontario, Canada). Apparentyl I should be in the vacation business! Although energy efficiency products such as what we sell on our website http://www.sunoutsolutions.com seem to be hot right now...

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