November 11th, 2008
Credit Crunch has Deep Impact on Holiday Shopping
The impact of the credit crunch is already rearing its ugly head as far as holiday shopping is concerned, because projected consumer spending online is remaining steady at $100 to $250 dollars on average. According to the eBillme Online Spending Index, a quarterly survey that is designed to examine online spending by consumers, the credit crunch is definitely expected to have a strong impact on holiday spending. Index results for the fourth quarter are showing that the credit crunch is causing many shoppers to significantly decrease how much they are using their credit cards, and is also impacting the access that consumers have to credit, resulting in a shift to cash as a necessary alternative.
Thirty one percent of all respondents had indicated that they would be more likely to purchase online if they could pay with cash and have an overall improved control over their finances. This is actually an opportunity for online merchants to optimize their checkout systems by providing additional cash alternatives. The eBillme Online Spending Index, an index that is conducted by Javelin Strategy and Research polled 1,600 different consumers in order to measure their projected online spending, as well as the factors which were influencing that projection, such as the economy, available payment options, financial control and security. This quarter, the index surveyed consumers about their holiday spending in addition to the normal survey. According to data from this fourth quarter, the credit crunch is continuing to put a serious damper on consumer use of credit and consumer access to credit.
- 34 % of consumers are closer to their credit limit than they were a year ago.
- 45 % of consumers surveyed have used their credit card less in the last three months, looking for non credit payment options instead.
- 55 % of people surveyed had indicated that their available credit decreased this holiday season in comparison to last year.
- 48 % of consumers are delaying purchases as a result of uncertainty in the economy.
This quarter’s index also found that as much as 46 percent of all consumers prefer to avoid black Friday shopping in favor of online shopping. As many as 13 percent of respondents are planning to do more of their shopping on Cyber Monday, which is the official beginning of the online holiday shopping season.
The index is based on data that was collected after being taken by an online consumer survey that was deployed in August of 2008. The sample size was 1,608 respondants. The next index by eBillme will be released in January of 2009 and will be posted on the eBillme blog website. You can also visit the eBillme blog website to view more data regarding the current index and the information polled about the credit crunch and its impact on consumer shopping during the holiday.
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We clearly see that consumers are looking around for lower prices and better deals. Product-price-comparison on our site has increased.