2008/10/01

CONSUMERS WILL BE ONLINE IN A CHALLENGING RETAIL HOLIDAY SEASON

Burst Media Survey Examines Retail Trends for this Holiday Season

Burlington, MA-October 1, 2008- To understand consumers' online research and spending plans this holiday season, Burst Media surveyed over 3,000 Internet users ages 18 and older in late August 2008 about their expected use of the Web for the upcoming holiday season. With economic woes pervasive in news headlines, Burst fielded the survey again between September 21- 23, 2008 (n=1,247) to ascertain whether there had been a change in consumers' planned holiday spending in the four weeks from the first survey. The number of consumers who plan to spend less this holiday season has increased since late August. While we cannot correlate this change with the economic climate, September data shows a significant shift from our earlier reading.

Specifically, the survey findings show one-third (33.8%) of respondents expect to spend less on gifts and entertaining this holiday season compared to 2007, up from one-quarter (26.9%) who expected to spend less just four weeks ago. Slightly less than one-third (30.7%) will spend "about the same" as last year, 16.6% will spend more, and 18.9% are unsure of their 2008 holiday spending.

Among Important Demographic Segments - Moms, Men, and Higher Income Households - Spending Will Decrease

  • Moms 45 years and older will be frugal this holiday season with 43.8% planning to cut holiday gift and entertainment spending. The larger the family the more likely to say holiday spending will be cut, topping out at over one-half (53.8%) of respondents with 3 or more children cutting their holiday budgets.
  • A significant shift in planned holiday spending occurred among men between our August and September surveys. In August, one in five (21.5%) men planned to cut holiday spending - this has increased in September to one in three (32.5%).
  • Respondents reporting high household income (HHI) plan to pull back their holiday spending. Today 39.3% of respondents reporting HHI of $75,000 or more plan to spend less on gifts and entertaining this holiday season - compared to one-quarter (25.3%) in August.

"Advertisers will need to redouble their efforts to reach consumers online," said Chuck Moran, VP of Marketing for Burst Media. "In a very challenging holiday season the Internet can serve as an effective medium to reach target audiences and maximize the efficiency of media budgets. Online media advertising also affords marketers the flexibility to quickly tailor advertising and offers for changing market conditions as they happen."

The one highpoint in this year's retail season is the growth of online sales. One half (55.2%) of respondents expect to make a holiday gift purchase online - up from 48.8% who made an online purchase in 2007.

Other interesting findings the Burst survey revealed about online holiday planning and shopping include:

  • Online Shoppers Will Also Window Shop - Comparing Brands and Retailers Two-thirds (69.6%) of respondents will research potential holiday purchases online. The most popular online "window shopping" activities are: researching and comparing features of different brands (58.0%); and comparing different retailers to find the best price (57.8%). Men are more likely than women to say they use the Internet to research and compare features of different brands (60.9 vs. 55.0%).
  • Holiday Cheer Gets Planned Online Too Two-thirds (73.4%) of respondents will use the Internet to help plan holiday entertainment - including holiday crafts, recipes, and music. The expected use of the Internet for holiday entertainment preparations spikes among various demographic segments, including women 35-54 (79.5%) and households with reported income of $75,000 or more (85.6%).
  • Credit Card Security = Greatest Online Shopping Fear Eight out of ten (78.3%) online shoppers cite credit card security as a concern when making an online purchase. Online shoppers are also concerned with privacy of personal information (68.4%), shipping costs (66.3%), product quality (56.1%), a site's return policy (46.8%), product availability (44.3%), and shipping issues/delays (39.7%). Women are significantly more likely than men to be concerned about credit card security (82.5% vs. 75.0%), personal information privacy (72.1% vs. 65.4 %), and shipping costs (72.0% vs. 60.9%).

About Burst Media

An online media and technology company founded in 1995, Burst Media (www.burstmedia.com) is a leading provider of advertising representation, services and technology to independent Web Publishers. Burst Media enables advertisers to reach finely segmented, engaged consumers as they visit Burst's extensive number of interest-based sub-channels. Through its Burst Network and Burst Direct units, the company represents one of the broadest and deepest offerings of interest-based websites online. Burst also markets its ad management platform, AdConductor™, which empowers content websites, online ad networks, and web portals to manage the complete process of ad sales and service. Burst Media is headquartered in Burlington, Massachusetts, with offices throughout the United States and in London, UK. For more information, visit www.burstmedia.com or call 781.272.5544.

Contact: Laura Ackerman
Kel & Partners
508-366-2099, ext. 125
laura@kelandpartners.com

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