All Articles Tagged "consumer spending"
Black America’s buying power just keeps on growing despite high unemployment in the African-American community. According to data found in a new report, “The Buying Power of Black America,” black consumers – and the money they spend — are the margin of profitability in most consumer product categories.
The report breaks down how much of black consumers’ $836 billion in income was spent during 2011 on clothing, entertainment, food, beverages, toys, consumer technology, cosmetics, autos, travel and dozens of other categories. The earned income of Black America, which is reaching the trillion dollar mark, is already the 16th largest market in the world, and is on way to surpassing the gross national income of Mexico.
“What the recession did to Black America’s buying habits is to give them a reason to re-evaluate how they spent the billions of dollars they earned collectively,” said Ken Smikle, president of Target Market News and editor of the report. “Before tight economic times, companies felt they could afford to take their loyalty — especially to top brands — for granted. That changed during the downturn. Price was a bigger factor driving purchasing decisions. Now brands have to earn the loyalty of black consumers all over again. black consumers are asking brands, ‘what have you done for me lately.’”
African Americans, says the report, have become more choice in what they spend money on. Another factor causing a shift in the loyalty of black consumers is social media. “African-Americans can now rely on their own research about brands,” said Smikle. “This is one of the reasons why we added a section that tracks how much leading advertisers spent in Black-oriented media. There is a correlation between building and sustaining Black consumers’ patronage and the dollars spent to reach them through advertising. That fact has not changed in this diverse media environment — it has become an imperative for brands that want success.”
According to the report, now in its 17th year, the top expenditures in black households in 2011 were $206. 2 billion spent on housing and related charges, $70.7 billion spent on food; and $25.5 billion on healthcare.
There were items that blacks increased spending on such as sports and recreational equipment, up 28 percent to $850 million; personal and professional services, up 27 percent to $5 billion; computers, up 21 percent to $5 billion.
You’ve definitely noticed a change in your paycheck since the beginning of the year. A bad change. A very bad change.
The tax relief that we’ve enjoyed for the past couple of years came to an abrupt and painful stop on January 1 when the Social Security tax went up from 4.2 percent to 6.2 percent. The increased taxes are already taking a toll on consumer confidence, which, according to BusinessMirror, dipped to a point we haven’t seen since November 2011. With less money to spend, it looks like there’s going to be less shopping in all of our futures.
Ad Age estimates that, for an income of $50,000, the increase amounts to $1, 000 per year. (The tax increase applies to wages up to $113,700.) Analysts say that totals something in the range of $115 billion-ish. That’s money that people won’t be using to buy stuff at the mall, with consumer spending projections going down.
There is some debate about where Americans will be spending their money now. Will they flock to discount retailers like Target? Will certain retail areas, like home decor, be hit the hardest? Will fast food restaurants like Wendy’s benefit? If there’s less money in people’s pockets, it’s likely that a variety of companies and industries will be hurt.
Research from economists at the Federal Reserve Bank of New York released just yesterday shows that Americans spent the extra cash they had been getting in 2011 and 2012 rather than saving it or paying what they owe. Nearly a fifth of people (19 percent) who said they would use the money to pay off debt actually spent it on other things. And 70 percent of people who said they intended to spend it like there’s no tomorrow kept their promise. “All told, about 36% of the extra income was spent by respondents — a relatively large figure,” The Wall Street Journal reports.
The report also found that it’s the folks who make more money, not the low-income earners, who are more likely to go on a spending spree. Low-income earners were actually more likely to use the money to pay debt.
We’ve talked a lot about budgeting cash on this site, and hopefully most of you out there are able to readjust without too much trouble. What are some of the things you’re doing to account for the lower take-home pay? Let us know in the comments.
The New York Times has a new trend alert: Parents and kids (teens in particular) are waiting until school is actually in session before doing a big chunk of their back-to-school shopping.
As television viewers and newspaper subscribers, we’ve been seeing ads and circulars crowing about the back-to-school season since July. But this shopping season may be shifting to a later date on the calendar. Teens want to see what the latest styles are before committing. And parents are waiting for better deals. Add later school start dates and the forces of nature — a warm summer means people aren’t really thinking about down vests and other winter gear — and you have a lot of retailers who are scrambling to scrounge up sales where they were once forthcoming.
The economy is very likely playing a big role in this, as it is in everything else. The article makes the point that shoppers are trying to assess what they really need before they start shopping. Moreover, if shoppers know they can wait a little longer and get a discount, they’re going to wait.
But the nature of back-to-school shopping could be changing also. Research from American Express shows that the number of Americans that will include electronic devices in the back-to-school shopping mix is up nine percent. The NYT article makes reference to the slowing of school supply sales; old-school items like notebooks and pens. The research says that 86 percent plan on spending more on clothing and accessories, but it doesn’t say when they plan on doing that shopping. Or where. CBS News reports that more people are doing their back-to-school shopping online.
You may think that Valentine’s Day is the day that lovers look forward, but it’s retailors who are rejoicing. According to Reuters, 59 percent of adults say they will celebrate Valentine’s Day this year, and the National Retail Federation estimates Americans will spend about $18 billion in celebration.
But where does the money go? The average guy will spend about $168 on the day, while women will most likely to spend half of that. The majority of people will buy a greeting card, candy and flowers. It’s no surprise that florists say Valentine’s Day is one of their biggest money drivers of the year–almost 200 million roses will be sold. Still, the floral industry can’t touch the sales made in jewelry.
“Our sales jump about 200 percent around Valentine’s Day, and — tough economic climate or not — they’ve grown in both quantity and average price over the past three years,” Josh Holland, the spokesman for Blue Nile online jewelry told Reuters.
He sees big sales for necklaces, earrings, diamond eternity rings and diamond studs, with some customers spending as much as $25,000. According to Holland, last year one person bought a $240,000 5.2 carat diamond set in platinum for his lucky Valentine.
Most people also spend their Valentine’s Day eating out. The restaurant industry makes about $3.6 billion for the night. Scott Jampol, the senior director of the reservation service OpenTable, tells Reuters that two-thirds of couples will spend more than $100 on dinner and about 10 percent will spend more than $200. Las Vegas, Miami and New York will see the most restaurant diners on the special day.
“To me, the best kind of Valentine’s gift is giving someone their favorite things, not going over the top with something extravagant that is impractical and they might not even like,” registered nurse J Lucy Boyd said to Reuters. She plans to buy her husband a $5 card and prepare a steak dinner that’ll run her about $25. In return, her husband will take her to lunch for her all-time favorite meal—Chinese food.
“It’s the little things, not the big ones, that make for a lasting happy relationship,” she said.
How much do you plan to spend on Valentine’s Day and how much do you hope your date spends on you?
The next time your mother or girlfriend asks you how long you plan on staying single, tell them to be grateful for your singleness. CNN Money reports that the nationwide growing number of singles is powering the economy.
These days being single is in. Women and men alike have stopped bemoaning their inability to find “the one,” and have embraced a new culture filled with single-centric fun. Only 51 percent of adults today are married, and 28 percent of all households consist of only one person. It’s a new record in US history, but businesses are thankful for it. Singles spend more than their married friends, earning a higher income with fewer responsibilities. The Bureau of Labor Statistics reports that singles contribute about $1.9 trillion to the economy each year.
There are about 18 million independent single women in the US today, compared to 14 million men. Women from ages 18 to 34 comprise 5 million of that number, but they are the fastest growing section of independent singles. ”I absolutely love having my own apartment,” Marsha Figaro told CNN Money. Despite her traditional Afro-Caribbean background, the 33-year-old has been living on her own since her twenties. “I can do what I want, when I want to do it, whether it’s eating, watching Hulu, going out, or just going to sleep. I definitely want to move in with someone when I find the right person. But it would be hard to give up all of this.”
Businesses are picking up on the strength of singles’ buying power. Ads are popping up featuring single women renovating bathrooms, driving around with girlfriends, and buying their own jewelry. The real estate industry is specifically catering to America’s increasing single phenomena and designing apartment complexes with more studio and one bedroom options as well as lush amenities such as party rooms, spa and billiards lounges that single’s tend to enjoy.
But singles aren’t just renting apartments; they’re also buying houses on their own. Women make up 21 percent of all buyers. ”Our salespeople are aware of this demographic and actually actively go after it. I go on the road all the time and tell all of our associates not to forget about single buyers because they’re everywhere,” Jim Gillespie, chief executive of the massive realty company Coldwell Banker said to CNN Money.
As single life steadily becomes the norm, the days when people thought singles were unhappy and lonely are becoming ancient history. Singles are having all the fun and enjoying fuller, more social and well-rounded lives. As Figaro recalls when she first took on independent single life, “it was totally liberating.”
By Charlotte Young
Wondering where all your money went? Perhaps you spent it during “Cyber Week.” While you may be complaining that you have no money to take a trip to the mall, judging from “Cyber Week’s” performance, the recession is over in Cyber World.
The Washington Business Journal reports that in the week after Thanksgiving, online shopping sales scored a record setting level at nearly $6 billion. “Cyber Week,” which runs from the Sunday before Cyber Monday through Saturday Dec. 2, saw three of the largest online spending days ever.
Reston, Virginia-based company comScore gathered the data of the record-breaking week. Cyber Monday broke the record with the largest percent of sales during the week with a total of $1.25 billion worth of purchases. Following right behind was Tuesday, Nov. 29 with a total of $1.12 billion in sales and Wednesday, Nov. 30 came in at $1.03 billion.
According to the New York Times, Cyber Monday sales surpassed Black Friday spending by 29.3 percent. It also beat last year’s Cyber Monday spending of $1.03 billion purchases, the fourth largest online spending day on record. Online spending has been up across this year’s holiday season with an increase of 15 percent since last year and a total of $18.7 billion of sales.
The spending demonstrates that consumer confidence is up. The New York Times report also states that unemployment decreased to 8.6 percent and small businesses created 55,000 jobs this past November. The additional jobs have popped up just as the season of giving has arrived and sale signs grace the windows of every store.
But why the huge interest in online shopping? comScore points to retailer’s free shipping incentive. In a separate annual holiday shopping survey conducted by the group, only two percent of those surveyed said that they would make an online purchase despite the shipping cost. About 36 percent of consumers revealed that not only was free shipping “very important” to their online shopping decision, it in fact was the factor that closed the deal.
It seems more and more retailers are cashing in on the survey’s observations. Along with historic online sales, retailers are offering free shipping in record levels. Although it may get difficult for the avid online shopping spenders, don’t get too caught up in free shipping and online shopping deals. Try to bring some of that money over into the New Year.
(Wall Street Journal) — Consumers, pinched by falling incomes, trimmed their spending last year even as prices for everyday goods climbed, according to a new report from the Labor Department. Consumer groups, defined as families, single persons living alone or sharing a household with others but who are financially independent, and two or more persons living together who share expenses, saw their average income before taxes drop 0.6% from a year earlier to $62,481. Average spending dropped 2% to $48,109 last year. Even as income and spending fell, consumer prices increased 1.6% in 2010.
(Daily Finance) — Where do you fall on the tipping spectrum? Do you hand the pizza delivery guy a $20 for your $14 pizza and declare with a grin, “Keep the change,” or are you the type who slips the bartender a folded-up $1 bill and hopes he won’t notice until after you’ve downed your $16 martini and skedaddled? In honor ofLarry Fox, the New York City deli delivery guy who outs bad tippers on his website,15percent.tumblr.com, (and got fired for it),DailyFinanceoffers a guide to avoid winding up among Larry’s gaggle of gratuity grinches. We turned to Jacqueline Whitmore, the founder ofetiquetteexpert.com, for advice on how much to tip.
Food server:”I know it’s hard to believe, but 18% is the new norm — 15% is the absolute lowest,” she said. “These people work very hard. They’re even bussing tables now. This is their livelihood.”
(Kiplinger) — If your number-one goal is to score deals, start by checking out sites that do the bargain hunting for you. Deal sites scour the Web for discounted items — saving you both time and money. Our favorite deal site still is dealnews, which has a team of deal hunters keeping their eyes on a million products at more than 2,000 online retailers. Plus merchants and the site’s visitors tip them off to bargains. The deal hunters hand pick the best deals among the thousands they get daily and update the site at least 200 times a day, says Dan de Grandpre, founder and chief executive of dealnews. The site also bans stores with poor customer service. Plus, you can sign up for e-mail or RSS alerts for products or stores you’re interested in and get gift ideas from the site. Dealnews also has added a local deals section to help you find discounts at brick-and-mortar stores near you.
(Smart Money) — If money can buy health and leisure and banish worry and toil, why is the effect of money on happiness so weak in studies? Simple: Most people are bad at spending, according to a paper published this month in the Journal of Consumer Psychology. Happiness can be a squishy field of study, relying as it does on subjects to know when their inner sun is shining (or on brain scans and cortisol levels, which can be just as ambiguous). Gather enough hazy clues, however, and together they tell a reliable story. A trio of researchers — Elizabeth Dunn of the University of British Columbia, Daniel Gilbert of Harvard and Timothy Wilson of the University of Virginia — has done just that in their study of studies. The evidence leads them to an eight-step prescription for shoppers seeking smiles.
1. Take the trip to Argentina. Get another year out of the Honda. Buy experiences instead of things, the authors write. In broad surveys of past spending as well as experiments, subjects overwhelmingly reported that they derived more happiness from things they did than things they own. One reason might be that experiences focus the mind on the present. “A wandering mind is an unhappy mind,” the authors write. Another is that people seem to frequently revisit activities through their memories but are quick to adapt to — and fall out of love with — new stuff.