Jewelry is Making a Comeback this Holiday Season

Jewelry has returned to many holiday wish lists, a sign that discretionary spending is back in vogue this holiday season, according to a just released survey.

A total of 23 percent of people surveyed will be asking for jewelry this holiday season, a 10 percent jump from last year’s 20.8 percent, according to the National Retail Federation’s 2010 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch.

Gift cards will remain the most requested holiday gift this year with 57 percent of people asking for plastic, followed by clothing (48.2%) and books (47.3%).

Overall, U.S. consumers plan to spend an average of $688.87 on holiday-related shopping, a slight rise from last year’s $681.83, according to the annual survey.

As in years past, most holiday gift-givers will spend the largest portion of their budget buying gifts for family ($393.55) and friends ($71.45), though they’ll still carve out room in their budget for small tokens of appreciation for both co-workers ($18.26) and others ($34.82). Total spending on gifts ($518.08) is expected to rise 2.1 percent from last year, which is in line with NRF says. Americans will also spend an average of $41.51 on decorations, $26.10 on greeting cards and postage, $86.32 on candy and food, and $16.86 on flowers.

“Consumers will still shop with the economy in the back of their minds, but we’re starting to see shoppers take baby steps toward a new normal,” said, Matthew Shay, NRF president and CEO. “As Americans open up their wallets for more discretionary gifts like jewelry or take advantage of sales to buy for themselves, retailers will begin to truly believe that the worst may be behind them.”

According to the survey, 61.7 percent of shoppers say the economy will impact their spending, down from last year’s 65.3 percent. Many shoppers say they will compensate by spending less (81.5%), comparison shopping online (30.9%) or with newspapers and circulars (28.1%), shopping for sales (54.1%) or using more coupons (40.6%). Although the economy continues to impact shoppers, a number of survey results indicate that shoppers may be ready to emerge from their shells this holiday season.

When asked which factor will be most important when shopping this holiday season, the majority of shoppers said that sales or price discounts (41.8%) or everyday low prices (12.7%) were most important. While those factors either declined or remained flat this year, two other categories rose in importance. The number of people who counted customer service as the most important factor rose from 4.4 percent last year to 5.3 percent this year, while shoppers who touted quality as the overriding factor rose from 11.8 percent to 12.7 percent.

“Price is paramount during any recession, but when the economy begins to recover other factors take on greater importance,” said Phil Rist, executive vice president, Strategic Initiatives, BIGresearch. “When shoppers consider other factors like customer service and quality in buying decisions, retailers have the ability to highlight a variety of other features to help their company stand out from the competition.”

Another sign that shoppers feel a bit of breathing room in their budget, the number of persons who say they will make a holiday purchase from a discounter dropped from 70.1 percent last year to 65.1 percent this year. Popular holiday shopping destinations will include department stores (54.5%), grocery stores (46.7%), the Internet (43.9%) and clothing stores (33.6%).

Americans aren’t only shifting where they’re shopping—how they’re shopping is changing, too. Mobile devices like iPhones and Androids are becoming more popular among consumers, and many shoppers plan to use these devices this holiday season to look for gift ideas, compare prices and find items in nearby stores. According to the survey, more than quarter of adults with a smartphone will use these devices to research or make holiday purchases, and that number jumps to 45 percent among young adults 18-24. Retailers are expected to take advantage of this trend by offering more robust mobile apps and Web sites, along with enhanced features like mobile reviews, to cater to Americans looking to shop from their phones.

Yet another hopeful indicator: the number of people who plan to take advantage of holiday sales to make non-gift purchases for themselves will rise 8 percent this year (52.9% in ’09 to 57.1% this year), with the average holiday shopper spending $107.50 on themselves, up from $101.37 last year.

Though the holiday season won’t kick off for many retailers until at least November 1, a sizeable number of shoppers are already planning ahead. According to the survey, 37.2 percent of Americans will begin holiday shopping by Halloween. Women are the most likely to begin shopping by the end of October (42.1%) while young adults 18-24 are among the least likely (27.7%).

NRF expects holiday sales to rise 2.3 percent to $447.1 billion.

Consumer Confidence Index Increases

The Conference Board Consumer Confidence Index, which had dipped in December, increased in January. The Index now stands at 60.6 (1985=100), up from 53.3 in December. The Present Situation Index improved to 31.0 from 24.9. The Expectations Index increased to 80.3 from 72.3 last month.

“Consumers have begun the year in better spirits. As a result, the index is now near levels not seen since last spring (May 2010, Index 62.7),” said Lynn Franco, director of The Conference Board Consumer Research Center. “Consumers rated business and labor market conditions more favorably and expressed greater confidence that the economy will continue to expand and generate more jobs in the months ahead. Income expectations are also more positive. Although pessimists still outnumber optimists, the gap has narrowed.”

Consumers’ assessment of current conditions was more positive in January. Those saying business conditions are “good” increased to 9.8 percent from 7.7 percent, while those saying business conditions are “bad” was virtually unchanged at 40.4 percent. Consumers’ appraisal of the job market was also more upbeat than last month. Those claiming jobs are “plentiful” rose to 5.2 percent from 4.2 percent, while those claiming jobs are “hard to get” declined to 43.4 percent from 46 percent.

Consumers’ short-term outlook was more optimistic than in December. Those anticipating an improvement in business conditions over the next six months increased to 19 percent from 16.8 percent, while those anticipating business conditions will worsen decreased to 11.3 percent from 11.8 percent. Consumers were also more optimistic about the job market. Those anticipating more jobs in the months ahead increased to 16 percent from 14.2 percent, while those expecting fewer jobs declined to 17.5 percent from 19.2 percent. The proportion of consumers expecting an increase in their incomes rose to 11.4 percent from 9.9 percent.

The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS, a custom research company.

E-Commerce Customer Satisfaction Slips Among Large Retailers

The sixth annual ForeSee Results E-Retail Satisfaction Index (U.S. Holiday Edition) slipped by 1 percent to 78 on the study’s 100-point scale (compared to the 2009 holiday season), but is still significantly higher than previous years. The overall decline can largely be attributed to declining scores for some computer and electronics retailers and mass merchants.

“In a recovering economy, a lot of us assume that declining satisfaction is a result of frustration with prices. Our research shows that is not always the case, and that it varies drastically from company to company,” said Larry Freed, president and CEO of ForeSee Results. “Retailers are slashing prices this time of year to attract customers, and not all of them need to be doing that.”

The report includes individual satisfaction scores with the 40 top e-retailers for the past six years, allowing for comparisons over time and between companies. Amazon, Netflix, QVC.com, Avon.com, LLBean.com, Newegg.com and Apple.com are rated by customers as the most satisfying retail websites, each scoring 82 or higher. Altogether, a dozen retail websites had superior customer satisfaction scores of 80 or higher.

The report found that customer satisfaction has a huge and quantifiable impact on the future success of a website. Highly satisfied visitors to retail websites say they are 60 percent more committed to the brand overall, 61 percent more likely to purchase from the retailer online, 35 percent more likely to purchase from the retailer offline, and 64 percent more likely to recommend the retailer than are dissatisfied visitors, according to ForeSee, which analyzes customer data to help organizations increase loyalty, recommendations and marketing value.

“There are few investments aside from improving customer satisfaction that would have the same impact on sales, loyalty, and recommendations, and result in such targeted, actionable recommendations at both strategic and tactical levels,” Freed said.