Survey says you'll spend $609 on holiday gifts

Shoppers in the Philadelphia region are geared up to increase spending on gifts during the holiday season, according to Deloitte L.L.P.'s 29th annual holiday shopping survey.

"The consumer is coming into the holidays pretty confident, and feeling a lot better about the economy and themselves," said Bill Park, a partner in Deloitte's Philadelphia office.

Philadelphia-area consumers are expected to spend an average of $609 on gifts this year, up 18 percent from $518 last year, the online survey of 500 consumers found.

But that doesn't mean all retailers will benefit equally from the increase. More than ever, retailers have to engage consumers online and in the store, Park said.

"The retailers that understand the entire experience of retailing will probably be the ones that get the better share of this increase," Park said. "What we're finding is that people who shop omni-channel - bricks and mortar, iPads, smartphones - they spend more. They spend a significant amount more."

Online sales are expected to reach $61 billion during the current holiday season, up 16 percent from last year, when online spending was up 12 percent from 2012, according to a JPMorgan report that used data from comScore Inc.

Holiday retail sales in 2013 totaled $579.3 billion, according to IHS Global Insight, an economic consulting firm in Lexington, Mass., which said Wednesday that it expected overall holiday retail sales to increase 4.2 percent this year.

That would top the 3.1 percent gains in each of the two previous years. Lower gasoline prices, higher consumer confidence levels than a year ago, and heavy discounting are major positives this year, IHS said.

Though retailers have had to contend with online competition for years, the continued market-share gains of online shopping show that a business-as-usual approach is ever more perilous to the financial condition of retailers.

"The good retailers focus on the experience when you walk through the door. It's sort of a sensual experience about the layout of the store, the music that's playing, maybe they have incense burning," Park said.

Richard A. Hayne, chairman and chief executive of Philadelphia-based retailer Urban Outfitters Inc., reflected on that challenge during a Nov. 17 conference call with analysts.

"The store experience must become a performance with the energy and precision of a Broadway play," Hayne said. "Of course, it means offering all the omni bells and whistles they want, like in-store pickup, same-day delivery, and mobile point of sale. And all of this must be done every hour of every day the store is open."

Nationally, the Deloitte survey polled 5,000 consumers in September. Park said the numbers were still valid, despite the consumer confidence dip reported Wednesday by the Conference Board.

"We did a quick pulse update last week and 81 percent of respondents . . . said they actually are going to spend the same or more than they told us two months ago," Park said.

"They are still feeling pretty good."

Deloitte L.L.C. did a survey of consumers in the Philadelphia region. Among the findings*:

How much

Consumers in the Philadelphia area predict that they will increase their total holiday spending by 17 percent, and their spending on gifts alone by 18 percent.

What

The biggest increase in the Philadelphia region is in the purchase of electronics. The biggest decrease is in books.

Mobile devices, social media

Smartphone ownership is up to 72 percent this year, compared with 65 percent in 2013.

Of those who own tablets and smartphones, 72 percent will use them in shopping this holiday season.

*Based on a regional survey of 500 people.

SOURCE: DeloitteEndText