New Administration Sparks Signs of Strengthening Consumer Confidence
Quarterly eBillme Online Spending Index data points to cautious optimism and a more hopeful outlook on spending and the economy as President Obama takes office
WILMINGTON, Del. – January 22, 2009 – 50 percent of consumers reported they will have more confidence in the economy while more than 1 in 4 feel more comfortable increasing their everyday spending now that the new administration has taken over. This is according to the eBillme(TM) Online Spending Index, a quarterly survey examining consumer spending trends online. The survey is conducted by Javelin Strategy and Research and released quarterly by eBillme, the payment option that enables consumers and small businesses to use online banking to pay now, pay securely and use available funds. This quarter’s Index shows cautious optimism through the continuing uncertainty about economic conditions.
“Amid all of the economic gloom, there appears to be some optimism on the horizon,” says Bruce Cundiff, Director of Payments Research and Consulting for Javelin Strategy and Research. “Fully half of consumers indicate more confidence in the economy as a result of the new administration. However, consumers will remain cautious and reliance on credit will continue to weaken. More financial responsibility towards everyday spending will be critical as we move forward and consumers adopt new spending habits to live within their means during this new era of personal responsibility.”
The eBillme Online Spending Index polled 1,600 consumers to measure projected online spending for the quarter and the influencing factors including the economy, security, and financial control. This quarter, the Index also surveyed consumers about projected Valentine’s Day spending in addition to the impact of the Obama administration on spending and consumer confidence.
Consumers are projected to decrease online spending over the next 90 days to an average of $75 as compared to $175 during Q4. Further data shows a slight uptick in uncertainty with 55 percent of consumers reporting the delay of major purchases due to uncertainty in the economy as compared to 48 percent over the last 2 quarters.
“It is not surprising that spending for Q1 is projected to reach a lower average than Q4,” says Cundiff. “Q1 is historically a low quarter in sales for retailers coming out of the holiday shopping season. Consumers are typically focused on paying bills and lowering any debt they acquired throughout Q4. This year, the strain of the economy and the credit crunch are impacting spending even further.”
This quarter’s Index also surveyed respondents about Valentine’s Day spending to learn what type of holiday retailers can anticipate this year.
- 11 percent of consumers are planning to spend more this Valentine’s Day as compared to last.
- 18 percent of consumers are planning to make their Valentine’s Day purchases online this year.
We are entering into a new era of responsibility,” says Marwan Forzley, President and CEO of eBillme. “Evidence of the consumer shift from credit to cash has carried over from Q4 and our Index data shows that consumers are taking steps to spend with caution. While the online retail sector has been able to better withstand the effects of the economy, we are heading into a cycle where shopping responsibly will be on the mind of every consumer.”
eBillme and Javelin Strategy and Research will be presenting a Webinar to discuss the research findings and consumer trends from the data. The Webinar will be presented on Thursday, February 5, 2009 at 1PM EST. To register, please visit https://www2.gotomeeting.com/register/428949622
For more information or to sign up to receive future editions of the eBillme Online Spending Index, please contact Alicia Buonanno at Alicia@GregoryFCA.com or 610-228-2096.
About the Index
The Index is based on data collected from an online consumer survey deployed in August 2008, with a sample size of 1608 respondents. The survey targeted US adults (age 18 +) and was based on representative proportions of gender, ethnicity and income as compared to the overall US online population. Overall margin of sampling error is ±4.4 percentage points at the 95% confidence level.
RECENT: see 2011 Online Spending projections.
