AFTER RISING IN 2001, CONSUMER PURCHASES RETREATED A NOTCH IN 2003

Long before the Internet, omnibus telephone surveys, and mall intercepts, Benjamin Disraeli said, "There are three kinds of lies: lies, damn lies, and statistics." So let's just forget about the worst of the three, statistics, and talk a little about the limitations of consumer surveys.

Consumers are notoriously fickle and what they remember buying one day may be different than what they remember buying the next. So when analyzing the results of this or any other consumer survey, we must recognize that the resulting data is only as good as the answers that go into it. In other words, no survey will ever give you the REAL answer, only an approximation of reality within the scope and limitations of the survey methodology and sample that is used.

There are ways to gather really precise and accurate consumer purchase data that involves large panels of consumers willing to record their purchases daily or weekly in consumer diaries. And those types of surveys cost bucket loads of money. That isn't what we have here. Rather, we asked a similar group of people during a similar time of year about their purchases of various consumer products using the same wording and the same telephone fielding company and methodology. The result we trust is a similar result that allows for general comparisons from year to year. Any survey, even those most precisely conducted, has a margin of error, which means the real answer is somewhere within a range of 2 or 3 or 5 percentage points above or below the stated result. So we also must consider those margins of error when we look at the purchase incidence data that follows.

The consumers have taken a step back in their purchase of most discretionary products after September 11.

Given those limitations, one could argue that most of the ups and downs noted year after year in these surveys of consumer purchase incidence of discretionary products falls within the margin of error and so in reality are meaningless. But my researcher's highly refined sense of the data says that this is not so. We see a notable upward trend in the purchase incidence of just about every discretionary product category from 2000 to 2001, just prior to September 11. In 2003, on the other hand, the overall direction is downward, with many categories falling back to pre-2001 levels or even lower in some instances. While my reason tells me most of these ups and downs can be attributed to margin of error, my intuition says otherwise.

The consumers have taken a step back in their purchase of most discretionary products after September 11. These changes are meaningful to every consumer retailer and marketer in the country. If we compare the average percentage point change in purchase incidence from 2000 to 2001 and 2001 to 2003 for comparable categories, we find the average change in purchase incidence is positive 10 points for 2001, while it is negative 2 points in 2003. The only product categories that posted meaningful positive increases in 2003 over 2001 were sporting goods, exercise equipment, and supplies in the entertainment, recreation, and hobbies category, and aromatherapy, Christmas and other seasonal decorations, art, prints, and lithographs, and wall décor in home. Everything else either remained the same as in 2001 or declined. See Figure 5.1 for the results in each category.

	2000	2001	2003
Entertainment, Recreation, and Hobbies
Audio equipment and stereo systems	31%	35%	26%
Books, magazines, and newsletters	68	78	74
Computers and software for home use	40	50	47
Crafts, sewing, knitting, and needlework supplies	33	39	29
Musical instruments[*]			10
Pet accessories	35	42	41
Photography equipment and supplies	38	51	43
Prerecorded video, music, DVD, etc.	66	79	62
Sporting goods, exercise equipment, and supplies	36	43	48
Toys, games, and dolls	45	54	50
TVs, radios, VCRs, DVD players, etc.	38	46	38
Home and Home Décor
Aromatherapy and scented household products	39	42	49
Arts, prints, and lithographs	21	27	42
Baskets, boxes, vases, pots, and decorative holders[*]			42
Candles and candle accessories	54	65	62
Christmas decorations and other seasonal decorations		55	61
Collectibles	31	34	36
Figurines and sculpture	20	19	22
Florals and greenery for indoor use	38	43	41
Flowers, seeds, shrubs, and trees for outdoor landscaping	50	59	56
Furniture and occasional furniture	35	41	41
Garden equipment and decorative items for garden and patio	41	47	42
Greeting cards and personal stationery		72	83
Home textiles and rugs	51	60	52
Kitchenware and accessories	46	58	56
Lamps and lighting accessories	24	33	30
Picture frames	40	52	48
Tabletop china, crystal, silver, sterling flatware, and other dinnerware	16	26	16
Wall décor, such as sconces, mirrors, shelves, and tapestries	22	25	38
Window coverings, blinds, curtains, and other window treatments[*]			37
Personal Luxuries
Fashion accessories such as handbags, wallets, belts, shoes, etc.[*]			63
Infant's and children's clothing and apparel[*]			36
Jewelry and watches	40	48	46
Men's clothing and apparel[*]			55
Personal care products that are more "special" or "exclusive" than everyday brands	50	71	64
Teen and tween clothing and apparel[*]			24
Women's clothing and apparel[*]			65
[*]New categories added in 2003

Figure 5.1: Discretionary Product Purchase Incidence

As we stand back and assess these differences, there are two things that have been brewing in the culture that change what we buy. Everything about shopping and the way we shop has undergone titanic changes since the early 1990s. And the cocooning trend that has dominated our consumer culture has come to an end only to be replaced by the new connecting trend with paradigm shifting impacts on the consumer culture. Let's look more closely at each of these trends.