American Express projects holiday spending for this year will be up 6%, from an average of $1,160 per shopper last year to $1,233 for the 97 Xmas shopping season. The ‘1997 American Express Retail Index’ shows about $879 of total holiday spending this year will be spent on gifts with the balance going to travel, decorations and entertainment. The annual survey of 800 consumers also shows spending by men is up sharply this year and that Southerners plan to spend the most on gifts. AmEx also found that approx. 20% of households with annual incomes over $100,000 will redeem credit card reward points to obtain items they will give as gifts.
Shoppers expect to spend a total of $1,233 this holiday season, with an average of $879 being spent on gifts, and the balance going towards holiday entertaining, decorations and travel, according to the 1997 American Express Retail Index on holiday shopping which is based on a national poll of more than 800 consumers. Compared with last year’s Index, overall holiday spending is up six percent ($1,233 vs. $1,160).
Half (50 percent) of those surveyed plan to spend $1,000 or more on holiday items, which includes buying for an average of 14 people this year and spending an average of $51 per person.(A) Regionally, Southerners plan to spend the most money this season ($1,426 vs. $1,169 in the Northeast, $1,114 in the West and $1,100 in the North Central states).
“After a year of strong sales, retailers can expect to end the year with a healthy holiday season as shoppers responding to our survey indicate they are in a giving mood and ready to spend,” said Emelie Smith, vice president, Retail Marketing Group, American Express Travel Related Services Company, Inc. (TRS). “Retailers, especially mall-based merchants, can expect to do well this season as consumers look for quality products and a variety of stores to help comparison shop.”
Men Are Generous Gift Givers
While women showed the greatest increase in spending last year, spending by men has risen sharply this year. Men plan to spend an average of $1,410 on holiday purchases this year, which is seven percent higher when compared with last years’ Index. On average, men will outspend women this holiday season by $346 ($1,410 vs. $1,064). Although men are buying for fewer people than women (13 vs. 16), they will spend $18 more per person ($60 vs. $42), and are more likely to buy expensive items like jewelry (52 percent vs. 40 percent) and electronics or appliances costing more than $100 (22 percent vs. 15 percent).
While four in ten (40 percent) shoppers will splurge on someone this season, men are more likely than women (42 percent vs. 39 percent). In addition, men outspend women by 51 percent ($531 vs. $351), buying mostly jewelry (16 percent) or clothes (16 percent). Half (50 percent) of the men who plan to spend lavishly on someone will buy for their spouse, while women are more than twice as likely as men to make that person their son or daughter (37 percent vs. 15 percent). Almost half (48 percent) of those with incomes over $100,000 plan to splurge on someone, compared with only 34 percent of those with incomes less than $25,000.
Southern Hospitality Shining This Holiday Season
On average, Southerners plan to spend the most when splurging on gifts to a special someone, as much as 149 percent more when compared with Westerners ($663 vs. $266). In fact, Southerners plan to spend an average of $1,027 on gifts this year, most generous of all regions by at least $130 ($897 in the Northeast, $754 in North Central and $764 in the West). Yet, Southerners surveyed were most likely to say they were disciplined spenders, with nearly half (48 percent vs. 42 percent of North Central residents and 46 percent of those in the Northeast and West) saying they usually stay within budget for holiday gift purchases. According to last year’s Index, Southerners spent the least of any region on gifts.
Shopping For Children
According to the American Express Retail Index, six in ten (60 percent) holiday shoppers plan to purchase toys this holiday season. While 66 percent of these purchases will be made relying on children’s wish lists, shoppers asked to pick the “hot item” this season had many choices including: Barbie Dolls, Mighty Morphin Power Rangers, Batman, Beanie Babies, Nintendo 64, Sony Playstation, and Giga Pets, to name a few.
Overall, educational toys are the top choice (80 percent) among Index respondents for the second year in a row. Other items on shopper’s toy lists include books (59 percent), dolls/stuffed animals (57 percent), children’s videos/music (53 percent), board games/puzzles (51 percent), and computer software (27 percent).
Department Stores Still the Favorite Place to Shop
With everything from hair dryers to handbags under one roof, department stores are the top choice of shoppers for the third year in a row, as cited by 80 percent of consumers. Other favorite places to shop include discount department stores (65 percent), clothing stores (60 percent), toy stores (51 percent), music and video stores (50 percent), book stores (44 percent), specialty stores (41 percent), electronic stores (39 percent) and factory outlets (38 percent).
Eighty-six percent of respondents said they will visit a shopping mall or shopping center, with free-standing stores a distant second as mentioned by only 47 percent of shoppers. The American Express Retail Index also found that downtown shopping districts cited by 30 percent, and catalog shopping mentioned by 27 percent, were also popular.
Smarter Holiday Shoppers Price Shop and Seek Out Sales
Most shoppers (85 percent) consider themselves educated consumers with almost three-fourths (72 percent) setting a budget for holiday purchases and 46 percent claiming to stay within it. More than seven in ten (71 percent) say they shop around for the best price for a particular gift and 83 percent look for store sales.
Interestingly, those with household incomes over $100,000, consider themselves especially savvy shoppers with nine in ten (90 percent) describing themselves as educated consumers. Of them, two-thirds (66 percent) plan to shop at factory outlets, 62 percent will use a low interest credit or charge card, nearly half (48 percent) shop with a list, and 20 percent will redeem credit card reward program points to obtain items they will give as gifts.
‘Tis Already The Season
According to the American Express Retail Index, retailers can expect a steady stream of shoppers leading up to the last minute crunch. Nearly three in ten (29 percent) respondents said they had begun their holiday shopping by October 1st. One-third (34 percent) will do some of their shopping the day after Thanksgiving, while 26 percent plan to finish their holiday shopping by the end of November. Women are significantly more likely than men to finish in late November, while most men will not be done until the last minute.
Plastic More Popular Than Checks, Moving In on Cash
Flexibility continues to be important to consumers who will use a variety of payment methods for purchases this season. Once again, credit cards surpass checks as the second most popular form of payment cited by 48 percent of respondents to 40 percent for checks. Cash remains the preferred method of payment, however, cited by 84 percent of those surveyed. Top reasons for using plastic include convenience (82 percent), extended warrantee coverage and insurance against damage or theft (63 percent), and easier to make returns (61 percent).
“The popularity of credit cards this year can be attributed to the attractive rewards and consumer protection programs that help make credit cards more than just a payment vehicle,” said Emelie Smith. “Fiscally responsible consumers are beginning to understand that the ability to consolidate expenses, especially at a time of year when personal spending activity is at its highest, while earning special benefits, is a value you just don’t get with cash.”
American Express is welcome at stores, restaurants, hotels and service providers where Cardmembers spend on everything from health and beauty aids, to computers, to a weekend away. Current American Express research shows that based on the way Cardmembers use their American Express cards, Cardmembers can put 92 percent of their plastic spending on American Express. Presently, a fast-growing number of merchants worldwide welcome American Express with a new establishment accepting the Card every two minutes. Expanded merchant coverage, a greater number of cards and higher spending per Cardmember helped American Express Company post a third quarter net income which was 14 percent higher than the same period a year ago.
American Express Travel Related Services Company, Inc., is a wholly owned subsidiary of the American Express Company — a diversified worldwide, travel and financial services company founded in 1850. It is a leader in charge and credit cards, Travelers Cheques, travel, financial planning, investment products, insurance and international banking.
(A) This is based on how much respondents expect to spend, on average, according to the following relationship groups: $57 on 11 relatives, $35 on 2 friends and $21 on 1 co-worker.