New data shows talk of a recession and new trade tariffs are making consumers think twice about splurging on holiday gifts
NEW YORK–(BUSINESS WIRE)–Predictions of an upcoming recession are ringing in U.S. consumers’ ears this holiday season, according to new research from global retail analytics and price optimization leader Intelligence Node. The study, which polled more than 1,000 consumers over the age of 18 across the U.S., reveals that the perception of a potential U.S. recession is having a real impact on how consumers will spend their hard-earned money during the busiest shopping season of the year.
According to the new research, 51 percent of U.S. consumers are currently cutting back on spending to prepare for a potential recession. Results also showed that, in the event of a recession, consumers are most likely to cut costs in the clothing, footwear and accessories, phones, laptops and tablets, and home décor categories. As consumers prepare to lower spending in these categories, it’s likely that retailers will face an uphill battle to make big sales on these items in the coming months. Some retailers will have it easier than others – pet supplies, for example, is a category that consumers are less likely to cut back on in the event of a recession.
Compounding the issue are new trade tariffs imposed by the Trump Administration on Chinese goods, specifically 15 percent tariffs on about $125 billion worth of Chinese goods that took effect on September 1, and tariffs on an additional $156 billion of Chinese consumer goods set to take effect on December 15. The December 15 tariffs would impact items including video game consoles, computer monitors, Christmas decorations and more. Intelligence Node’s research found that existing tariffs are already impacting consumer spending, with 31 percent of consumers saying that new tariffs on goods from international markets have impacted their spending habits, and 35 percent saying they have noticed changes in the prices of products they frequently purchase following tariffs imposed on Chinese goods. With additional tariffs set to hit right in the middle of the holiday shopping season, it is likely that consumers will be more cognizant than ever of price points on the goods they purchase.
“With fear of a recession and price sensitivity due to tariffs weighing on consumers’ minds, it’s no surprise that 49 percent of consumers plan to cut back on overall spending this holiday season,” said Sanjeev Sularia, CEO, Intelligence Node. “Retailers will need to be more strategic than ever this year in order to win competitive sales to wary U.S. consumers.”
Intelligence Node’s research also unveiled insights on the strategies consumers plan to use in order to cut back: 36 percent will only buy their preferred brand when it’s on sale or when they have a coupon, and 72 percent are likely or very likely to stray from their favorite brand to get a better price. Additionally, more than half of consumers price compare when shopping online and 68 percent say price comparing has helped them save more on purchases than any other strategy.
“Our data shows that brands cannot rely on consumer loyalty or having a superior product – consumers will always look at price and are not afraid to switch to another brand or offer if the price is better,” Sularia continued. “Consumers are constantly comparing prices before making purchases, meaning brands cannot afford to guess whether their price is best. It’s critical for brands to have price optimization technology on their side if they want a chance at capturing their share of revenue from this year’s reluctant consumer shopper.”
To read the full report on the consumer survey findings, visit: https://www.intelligencenode.com/knowledge/retail-reports/consumer-attitudes-2019-holiday-retail-season/
For more information on Intelligence Node’s price optimization solutions, please visit www.intelligencenode.com.
About Intelligence Node
Intelligence Node is a proven innovator in retail analytics technology and offers the world’s largest retail product database available in the market today, packaged in an easy-to-use and intuitive user interface. Currently serving more than 150 retailers and brands worldwide, Intelligence Node partners with category leaders like Li & Fung, Tesco, Westwing, Reliance, Mobly, Landmark, and Jockey to optimize their pricing and merchandising operations. Its AI-driven insights are powered by the world’s largest global retail product index, unmatched in accuracy, mapping 1 billion+ unique products across 130,000+ brands for more than 1400+ categories every day. For more information, please visit www.intelligencenode.com, and on Twitter @bigdataNODE.
PAN Communications for Intelligence Node