Irish consumers feel some improvements, but not across the board,
Deloitte H1 2015 Consumer Review
Nine out of ten Irish adults have made an online purchase in the last year
The latest findings from the Deloitte Consumer Review reveal that while the level of optimism amongst Irish consumers has increased, it is not across the board and many remain pessimistic. The findings show that optimism across all categories, such as level of debt, job security, job opportunities, household disposable income, good health and wellbeing and children’s education, has increased since September 2014 by between 2 and 7 percentage points. Interestingly however, respondents who felt that things had worsened over the last six months also increased across most categories (except health and wellbeing which remained stable) by between 1 and 12 percentage points.
Commenting on the findings, David Hearn, Partner, Deloitte commented: “The fact that there are Irish consumers who believe their situation is getting better is likely as a result of the improving economy. Yet, this is not yet being felt across the board, and there is a cohort of Irish consumers who have become more pessimistic. Overall, the findings point to evidence of a dual economy emerging amongst Irish consumers.”
Key findings of the H1 2015 Consumer Review with regard to consumer sentiment and spend include:
• 19% (H2 2014 - 17%) of respondents feel their situation with regards to household disposable income has improved, yet 42% (H2 2014 - 39%) feel that this situation has worsened.
• 23% (H2 2014 - 17%) of respondents indicated they became more optimistic with regards to their level of debt over the last six months, 28% (H2 2014 - 25%) feel less confident.
• 17% (H2 2014 - 15%) feel more optimistic with regards to job security, 21% (H2 2014 - 20%) feel less so.
• The top three categories which saw increased spend amongst respondents over the last six months were utility bills (49% of respondents), transport (34%) and phone/internet/TV subscriptions (31%). Those categories that saw decreased spend include restaurants and hotels (39% of consumers), going out (39%) and alcoholic beverages (38%).
• The top three categories which consumers believe they will spend more on in the next six months are utility bills (36% of respondents), transport (25%) and health (25%). The categories which they believe they will spend less on include holidays (29%), furniture and homeware (29%), and restaurants and hotels (28%).
• 28% (H2 2014 - 18%) of respondents plan to pay for a long break or holiday in the next six months, 16% (H2 2014 - 15%) plan to purchase a car and 14% (H2 2014 - 11%) plan to buy a major piece of furniture.
• The worrying trend with regards to pensions continues – there has been a slight drop to 23% in the number of respondents who are paying into a pension fund.
• 44% of respondents indicate that they pay money into a saving account, down from 48% in H2 2014.
• 43% make repayments on a loan, up from 39% in H2 2014.
“From a retailer’s perspective they will need to cater for Irish consumers who are facing different situations. The emerging evidence of a dual economy suggests retailers will need to continue to utilise sales and promotions to attract some consumers, while the emergence of increased activity in spend on more discretionary items would suggest that some retailers can now focus on or add more to this element of their offerings,” Mr Hearn said.
Survey outcomes of online activity
The research also looked into the evolving use of online resources in consumers’ purchasing behaviour and found that nine out of ten Irish adults made online purchases last year. Most likely items to be purchased online include clothing and footwear (49% of respondents), hotel and accommodation (46%), transport services (44%) and books, DVDs, music and games (42%).
Before their last significant purchase, almost two-thirds of consumers visited the website of the retailer from which they made the purchase. Over half (54%) also visited the website of businesses selling similar products. More consumers also read online reviews (35%) than spoke to in-store staff (32%).
The internet was the most common primary source of information on new products and services for consumers, as identified by 26% of respondents. This was followed by TV or radio (24%), friends or family (13%), in a shop (12%) and social media (10%).
With regards to sources of honest information on products and services, 63% of consumers indicated that they trust feedback from family and friends, followed by customer reviews (58%) and independent product or service experts (39%). Interestingly, females are more trusting of both family and friends, and customer reviews, while males are relatively more trusting of independent experts and direct sales information from store staff or websites. Consumers under the age of 35 put most trust in anonymous online customer reviews when finding out about new products and services.
Two-thirds of consumers said that their purchasing decisions are influenced by other customers’ experiences, while a similar proportion often share their experiences as consumers, regardless of whether these are positive or negative.
Hearn commented: “Our research highlights the ever increasing importance of online resources for both consumers and businesses. Consumers use the internet to research product information, compare prices, check availability and find out about the opinions and experiences of other consumers. However the internet is now also empowering consumers and they are embracing the opportunity to share their opinions, positive and negative, about products and services they have purchased. Critically, these opinions are seen as more reliable than the retailer’s message, and even independent product experts, and are influencing the purchasing decisions of others.
“For businesses, no longer is it sufficient to simply maintain an online presence. Customer engagement needs to evolve further. Old established patterns can no longer be relied on, and businesses need to rethink about how they engage with consumers. Do they actively engage in online conversations taking place in external forums? Do they just monitor online content as a way of gaining customer feedback? Although this new landscape can appear daunting it cannot be ignored and the rewards for those who get it right, and for those up-and-coming businesses who are seeking to challenge the incumbents, are clear.”
Notes to Editors
About the survey
The research was carried out by Amárach as part of an omnibus survey. A total sample of 1,000 was achieved with quotas set on gender, age, social class and region to achieve a sample aligned with the national population. Interviewing fieldwork dates were 20 to 27 March 2015.
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