Americans Pulled Back on Spending Before Economic Crisis, Study Says
Dec 24, 2008
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Consumer confidence and spending began slowing as early as Spring 2007, according to a recent analysis by Experian Marketing Services, a part of global information company Experian. The analysis, based on data from Experian Simmons and Experian Hitwise, found that from Spring 2007 to Summer 2008, the percentage of U.S. adults who felt they would be financially better off in the next year dropped considerably from 46% to 37%.
The analysis, which compared the self-reported economic confidence and spending habits of adult Americans along with online site traffic and searches on major purchase items, revealed consumer behaviors to be a strong indicator of a downturn months before the current economic crisis. Not only did the percentage of confident consumers slump, but the number of adults who felt they would be worse off in the coming year grew by 9% to 22%.
"Our data shows a clear indication that the preferences and behaviors of consumers trended toward a slowdown well before the economic woes experienced over the past few months," said Joe Paulsen, general manager of Consulting and Analytics for Experian Marketing Services. "Having this level of insight into the confidence levels and buying behaviors of consumers is critical for businesses seeking to better understand and communicate with their customers during challenging economic times."
The analysis also found that:
-- Households earning $250,000 or more were the fastest to abandon the notion they would be somewhat or significantly better off in the coming year, dropping by 40% from Spring 2007 to Summer 2008
-- Middle- and upper-middle-income Americans (incomes ranging from $50,000 to $249,000) had the largest declines among those who planned to purchase big- or medium-ticket items within the next month, falling nearly 25%
-- From October 2006 to October 2008, overall visits to retail Web sites slowed, with a 4% year-over-year decline
-- During the same time period, overall visits to Web sites in the travel category were down 10% year-over-year
-- Online searches for major electronic items saw significant, year-over-year decreases, with televisions down 33%, laptops down 48%, and computers down 57%
-- While online interest in big-ticket purchases decreased, visits to grocery Web sites are up 29%, and visits to coupon Web sites are up 27%.
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