New Year & Christmas 2020 Spending Survey · Christmas New Year 2020 Spending Survey 4 Key survey...

Christmas & New Year2020 Spending Survey12 December 2019

Christmas & New Year 2020 Spending Survey

2

Contents

Key survey observations 04

Economy and wealth 07

Russians’ New Year budget structure 11

Omni-channel retailing 16

Consumer behavior 21

Research methodology 26

Contacts 27


3

Deloitte is proud to present its 22nd annual global survey of consumer spending over the Christmas and New Year holiday season.


4

Key survey observationsThis year,

is RUB 19,300, a 14% increase on last year’sactual spending of RUB 16,900.

actual spending over the last holiday season(RUB 18 324) exceeded the original budget (RUB 16 900) by 8%.

The average Russian’s holiday budget will be14% higher than last year

New Yearbudget:

the average Russian'sNew Year budget

Russians are not stickingto their budgets:

Foodand drink

Entertainment

Gifts

57 % of Russiansbelieve that

Although this indicator de-clined from 61% last year, this figure remains the highest in Europe.

Every fifth Russian expects theirpurchasing power to increase in 2020.

growth — 13%, recession — 44%,

Russians do not know what to expect fromthe economy

the economyis in recession.

Predictions forthe economyin 2020:

– theEuropeanaverage

One in five Russians hasno idea of what to expect from the economy

Russians usuallydo their holidayshopping

afterthe 15thof December.

One in four buy gifts at the very last minute.

One in five Russians searches for gift ideas online, but purchases the actualgift in brick and mortar stores.

Russians expanded their use of social mediato look for information on discounts and promotions in 2019 (17% versus14% in 2018).


5

This year's most popular gifts

Like last year, money is by farthe most desired gift (men: 59% and women: 67%).In second place were smartphonesfor men (38%) and perfumesfor women (56%).

Russians typcially recievechocolates (45%) and cosmetics (44%).

One in three Russians uses the Internet to select food and drinks.

First place

Second place

Online versus traditional stores

Only 4% of respondents have never bought any-thing online.

85% of Russiansbelieve thatshopping onlinesaves time.

Debit cards remain the most common payment method for Russians.

Only one in three Russianbought gifts with cashthis year, down from 41% in 2018.

Most Russianswill buy gifts in specialty chains,

and hyper- and supermarkets.

The share of Russians who consideronline offersmore attractive than those of brickand mortar storesincreased from62% to 74%.

The share of Russians who plan to benefit from Black Friday offersto save money over the holiday season has increased from 66%in 2018 to 70% in 2019.


6

The Russian retail market has declined by 3% in USD terms

The Russian retail market demonstrated slight growth in RUB terms

Size of the retail market (USD)

Russia

• Following rapid growth in 2017 (+25%), the Russian retail market contracted by 3% to USD 495 billion in 2018, below the preliminary forecast of 1% growth. This figure is below preliminary forecasts that implied market growth of 4 bln USD.

Europe

• The European market grew 5% in 2018. Only the Russian and Turkish retail markets fell, down by 3% and 12% respectively.

• Just as expected, based on 2018’s findings, the UK has recovered lost ground and regained its status as the third largest retail market (11.1%), overtaking Russia (10.9%), with only France and Germany ahead (13.3% and 15.6% respectively).

• Ruble sales continue to grow steadily. Sales are expected to increase 6% in 2019, down 3% from forecasts made in recent years.

50

45

40

35

30

25

20

15

10

5

0

800

700

600

500

400

300

200

100

0

40%

30%

20%

10%

0%

-10%

-20%

-30%

-40%

800

600

400

200

0

2009 20092021F 2022F 2021F 2022F2011 20112013 20132015

6% 5%7%7%

4%

20152017 20172010 20102012 20122014 20142016 20162018 20182019F 2019F2020F 2020F

25%

1% 2%

7%7%

-3%

• Respondents expect the Russian retail market to inch up in USD terms in 2019-2022. In 2022, the size of the Russian retail market in USD terms will be still be well below its peak in 2011-2014.

Source: Economist Intelligence Unit

Russian growth, %

European growth, %

Russian sales, USD bln

Russian share in Europe, %

Source: Economist Intelligence Unit

Russian sales, USD bln (left axis)

Russian sales, RUB trln (right axis)

Size of the Russian retail market

+8%+7%

+4%+6% +5% +5%


7

Economy and wealth Consumer perceptions and purchasing power


8

Negative perceptions prevail once again

Current perception of the economy

Russia, 2019 • Although the share of Russians who believe that the economy is in a recession declined from 61% to 57% in 2019, this figure is still the highest in Europe.

• A large proportion (more than 35%) of respondents also cited a recession in Spain, Italy and the UK.

• The most optimistic perceptions were given by respondents in Poland and Portugal (36% each).

• This year, the share of women with a positive or neutral view of the economy increased from 27% to 35% and were almost as optimistic as men.

• Respondents from all age groups generally shared the same opinion on the current economic situation in 2019.

• Older people (aged 55+) and Russians aged 35 to 54 were more positive, with both groups showing a more than 5% increase in the number of optimists compared to 2018.

57%

57%

33%

33%

4%

4%

6%

6%

56%

59%

35%

32%

5%

6%

4%

3%

58%

55% 57%

31%

34% 32%

4%

4% 4%

7%

7% 7%

Russia, 2018

Average

Average

Male

18–34

Female

35–54 55+

27%

33%

5%

4%

7%

6%

61%

57%

Growth Stability Recession I don’t know

Positive Neutral Negative I don’t know


9

Russians are more optimistic about their expectations for 2020

• Only 13% of Russians expect the economy to grow in the next year, and 44% anticipate a recession. One in five Russians has no idea of what to expect from the economy, which is double the European average.

• Russia was less pessimistic than just two European countries this year — Spain and the UK (45% each) — where instability and uncertainty are primarily driven by Brexit negotiations and geopolitical factors in Europe.

• Portuguese and Polish respondents were the most optimistic in Europe about the economy.

• The graph on the left shows that negative expectations among Russians have declined for the second consecutive year, falling to their lowest level in five years.

Improvement 9% in 2018

Deterioration47% in 2018

70%

60%

50%

40%

30%

20%

10%

0%2020F2011 2013 2015 2017 2018 20192010 2012 2014 2016

13%13%

44%

24%

44%

Improvement

Deterioration

}

}

36%

50%

33%37%

30%

54%

66%

51%

61%57%

44%

Expectations of the economy in 2020

% – Share of Russians who are perceiving a recession/expecting a deterioration

Russian level of pessimism regarding the economy

Stabilisation


10

Male

Female

18-34

35-54

55+

Europe2018

Perceptions about purchasing power are gradually stabilizing

• Pessimistic expectations about the economy did not have a major impact on how Russians assessed their purchasing power in 2019. The number of Russians who feel that their purchasing power has declined fell to 42% from 45% last year.

• Looking forward to 2020, just 26% of respondents expect their purchasing power to decline in 2020 — the lowest figure since 2013. The share of Russians who believe that their purchasing power will improve in the next year has increased to 20% from 18.6% in 2018.

• Women were most optimistic about their purchasing power, with 14% believing that they have more money to spend in 2019, up from 11% in 2018.

• Italy has similar levels of pessimism to Russia (at 43%), while in Poland, one in three respondents said that they can afford to spend more than last year.

42% 13%

39% 12%

32% 22%

45% 11%

44% 13%

42% 10%

52% 7%

32% 19%

2020F2019F2011 2013 201520102009 2012 2014 2016 2017 2018

80%

70%

60%

50%

40%

30%

20%

10%

0%11% 13%

20%

46%42%

26%

44%

53%

12%9%

Movements in purchasing power, %

I have less to spend I have more to spend

I have less to spendI have more to spend

Russia:

2019

2018


11

Russians’ New Year budget structure Presents people want, and presents people get


12

The average Russian’s holiday budget will be 14% higher than last year

Average Russian’s holiday spending in EUR • This year, the average Russian’s holiday budget is RUB 19,300, a 14% increase on last year’s budget of RUB 16,900).

• The 2018 results show that budget planning is no longer a reliable tool: both men and women planned their spending equally poorly, with their actual expenses (RUB 18,324) exceeding budgeted ones (RUB 16,900) by 8%.

• The share of gifts in an average Russian’s holiday budget has increased from 42% to 46%. In this respect, Russia is almost on par with Europe where around half of the holiday budget is spent on gifts.

• The UK spends the most on gifts (EUR 336) while Spain tops the list of spending on food and drink (EUR 173).

Exchange rate used this year — RUB/EUR 71.43 Last year — 75.75

€ 600

€ 500

€ 400

€ 300

€ 200

€ 100

€ 0

€ 100€ 0 € 300€ 200 € 400

203

116

123

133

111

115

54

30

31

2009 20192011 2013 20152010 2012 2014 2016 2017 2018

€ 245

€ 250

€ 262

€ 223€ 270

€ 253

€ 212

€ 257

Actual spendingPlanned budget

Russia Budget 2019

Russia actual 2018

Europe Budget 2019

Gifts Food and beverages Entertainment

Holiday budget structure in euros


13

Most Russians want to receive money as a gift

Top 10. Most desired gifts

• Money traditionally ranks well ahead of all other gifts.

• Wearable tracking devices saw their popularity increase 9% this year, replacing event tickets in the top 10.

• Books remain the most desired Christmas gift In Europe, followed by cash and chocolates.

• Men’s gift preferences did not change much in 2019. This year they wearable trackers replaced food and drink, but their key gift priorities remain the same.

• The list of the most desired after gifts for women was also largely unchanged.

• However, more women are hoping for smartphones/mobile phones this year, supplanting chocolates.

Men Women

63%

59% 67%40%

38% 56%

39%

34%48%

37%

29%41%

33%

29% 39%

31%

29%

29%

27%

27%

Money

Travel

Smartphone/mobile phone

Cosmetics/perfumes

Laptop/PC computer

Chocolates

Wearable tracking devices

Jewelry/watches

Gift vouchers

Beauty care/massage/spa

Money


Laptop/PC computer


Travel

Money

Cosmetics/perfumes

Travel




14

Chocolates, cosmetics and perfumes remain the most popular gifts

Тоp 10. Most popular gifts

• Russians are still most likely to buy chocolates, cosmetics and perfumes as gifts for others.

• This year, wearable trackers first made it into the list of most popular gifts.

• Russians’ gift selections for men are relatively consistent: the top five most popular gifts for men remain virtually unchanged year-in and year-out.

• Wearable trackers entered the top five for the first time this year, edging out books (15%).

• Although travel is one of the most desired gift among women, they are extremely to be disappointed, as travel is ranked down in 25th place.

• Books are more popular than cooking accessories (17%).

46%

36% 57%46%

32% 54%

30%

31% 28%

22%

18% 27%

18%

18% 19%

17%

16%

14%

14%

13%

Chocolates

Cosmetics/perfumes

Money

Gift vouchers

Food

Books


Event tickets


Smartphones/mobile phones

Chocolates

Cosmetics/perfumes

Money

Food


Cosmetics/perfumes

Chocolates

Money

Gift vouchers

Books

Men Women


15

“Smart” accessories, wearable trackers, and sports goods become more popular as gift choices for teenagers

Тоp 10. Gift choices for teenagers (12-18 year olds)

Тоp 10. Gift choices for children (under 12)

• Accessories, wearable trackers, and sports goods are gaining popularity as gifts for teenagers in 2019.

• Cash also remains a popular gift.

• Construction kits and learning games are no longer in the top 10

• Children under 12 years of age will receive construction kits, dolls or educational toys, the same as in 2018.

30% 43%

23% 36%

18% 30%

16% 25%

14% 21%

14% 19%

14% 19%

13% 19%

12% 18%

11% 17%

Chocolates

Games

Money

Books



Smart accessories

Sports and leisure equipment

Clothes and shoes

Sportswear

Construction kits

Dolls

Educational toys

Clothes

Games

Books

Sports and leisure equipment

Electronic toys

Baby goods (toys and clothes)

Learning games


16

Omni-channel retailing The Internet is an integral part of the shopping process


17

Search engines (Google, Yahoo)

Online stores with one or more physical stores

Online stores without physical stores

Price comparison sites

Websites with coupons and offers

Websites of brands/suppliers

Forums and blogs

Email newsletters and online leaflets

None of the above

The growth in online shopping is slowing in Russia

Where do people buy gifts?

Share of gifts purchased online Where do people search for/compare desired products?

Russia Europe

0% 10% 20%

Europe

• Every third gift is purchased online, and this figure continues to grow. In the UK and Poland more than half of gifts are now purchased over the Internet.

• Search engines that offer contextual ads were the most common and popular way to search for gifts in Russia and Europe in 2019, followed by the online stores of traditional retail chains.

• Russians tend to be very thorough when selecting gifts. They use special websites to compare prices.

Russia

Russian most commonly use search engines (23%) and price comparison sites (17%) to select wearable trackers.

When shopping for home goods, Russians usually use websites of manufacturers with one or more stores (18%), as well as search engines.

E-mail newsletters influence people’s choices only when they are looking for gifts in the “Music” category (14%).

Russians are most likely to visit forums and blogs for information on movies (11%) and music (10%).

20192011 2013 20152012 2014 2016 2017 2018

22%25% 27% 26%

29%

35% 37%

42% 44%

24%24% 26% 26% 23% 25%

29%32%

37%


18

Traditional stores are losing ground as customers focus more on prices and price comparison

Offline stores Online stores

• Online shopping is particularly attractive to Russians because it offers easy access to other customer reviews and an enables them to find goods quicker and easier than in physical stores.

• The home delivery option has also emerged as one of the key drivers for online shopping.

• The share of people who find online offerings more attractive than those at offline stores increased from 62% to 74%.

• As in Europe, people in Russia are becoming less and less concerned about the safety of their personal data when shopping online.

• Brick-and-mortar stores are still unrivalled in terms of the ease of product exchange/ return, after-sale service and protection of personal data.

• However, each of the key differentiating factors lost 5% to 12% of customer loyalty this year.

I receive the goods I purchase immediately

It is easy to exchange or return goods

My personal data is highly protected

After sale service is available (repairs)

Competent and professional advice are available

I can read other customers’ reviews

I can compare prices easily

There is a wide assortment

It is easy to search and choose what I need

I can have goods delivered to my home

01 01

02 02

03 03

04 04

05 05


19

Shopping online saves time

• Seven out of 10 Russians (even those who had only made one web purchase so far) indicated that online shopping saves time.

• Only 4% of Russians have never bought anything online.

• One in five Russians browses the Internet for gift ideas but buys gifts in traditional stores.

• Home deliveries from online stores are much more popular than deliveries to brick-and-mortar stores (35% versus 26%).

Yes, online shopping saves time when buying a single item

No, online shopping does not save my time

Yes, online shopping saves time, but only when buying 2 items

Yes, online shopping saves time, but only when buying 3-5 items

I do not shop online

Time saved when shopping online Preferred Shopping Methods in online stores

0% 10% 20% 30% 40% 50% 60% 70%

69%

9%

6%

4%

12%

15%

21%3%

35%

26%

I browse the Internet for gift ideas but buy them offline

I look for gifts in traditional stores but buy them online

I buy gifts online and have them delivered to a traditional store

I buy gifts online and have them delivered to my home

I do not shop online


20

Specialty chains and hypermarkets are more popular than traditional department stores

• Most people in Russia will buy gifts in specialty chains (27%), as well as hyper- and supermarkets (23%).

• Unlike Russians, Europeans do not have strong preferences when it comes to where they buy gifts.

• Specialty chains are popular in the Netherlands (27%), Germany (26%) and Poland (26%).

Retail formats for buying gifts

Speciality chains (selling toys, books, DIY, clothes.)

Hypermarkets/ supermarkets

Traditional department stores

Traditional local shops

Factory outlet stores

Luxury stores

Russia 2019 Russia 2018 Europe 2019

• People in Portugal (31%) and Spain (28%) prefer traditional local stores.

0% 10%5% 15% 20% 25% 30%


21

Consumer behaviors Decision-making and time of purchases


22

Holiday spending is less driven by promotions

• One in five Russians are increasing their holiday spending because they don’t want to think about the economic situation.

• Rising incomes are still the main driver, encouraging 25% of Russians to spend more during the holiday season.

• Shoppers in UK and Germany were most likely to cite desire to drown out thoughts about the economy as a reason to spend more over the holidays (29% and 28% respectively), followed by the Netherlands and Spain (26% each).

• People in Italy, Portugal and Poland are the most susceptible to promotions (29%, 25% and 24% respectively).

Growing personal incomes

Not wanting to think about economic instability

Promotions

Growing economic stability

Offers and recommendations

25% 13%

21% 22%

14% 21%

13% 9%

9% 5%

Main drivers of increased holiday spending What do you use social media for when buying gifts

I look at varios goods

I search for reliable product reviews

I compare prices

I search for discounts and promotions

I look for gift ideas

I find out what my friends/family want

Social media is a helpful tool during the holiday season

• Russians and Europeans use social media in similar ways overs the holiday season.

• Russians expanded their use of social media to look for information on discounts and promotions in 2019 (17% versus 14% in 2018).

• One in five Russians uses social media to look at various products. They are most likely to view home appliances, wearable trackers and fashion.

• More than 20% of Russians go on social media to compare prices for food.

• Social media is most often used to look for information about discounts and promotions on video games and sports goods.

• When selecting books, one in five Russians uses social media to read reliable reviews and get recommendations.

Russia

RussiaRussia

Europe

EuropeEurope

18%

18%

17%

16%

10%

19%

17%

18%

16%

18%

12%

21%


23

To what extent are you going to leverage offers during Black Friday as part of your holiday shopping?

Percentage of holiday budget respondents are planning to buy on Black Friday

Over 50%

30% to 50%

Under 30%

I do not plan to spend my holiday budget on Black Friday deals

22%

17%

14% 12%

14%

40%

34%

Russia Europe

Black Friday is becoming ever more popular in Russia

• Black Friday’s appeal for holiday shopping is growing, with over a third of Russians (36%) intending to take maximum advantage of Black Friday deals. Overall, the share of Russians who plan to use Black Friday discounts to reduce their holiday spending has increased from 66% in 2018 to 70% in 2019?

I will consider some of the deals on offer to save my holiday budget

I will try to use the maximum of Black Friday opportunities relevant to my shopping needs

I will avoid Black Friday shopping because I expect no significant discounts to normal prices

I will avoid Black Friday shopping because the exact products I need are usually not on offer

The Black Friday period is too early for my holiday shopping, I usually do it closer to the New Year

I do not know what Black Friday means

20182019

38%35%

28%35%

12%12%

9%9%

8%7%

6%2%

• The majority of Russians (47%) are ready to spend up to a third of their holiday budget on Black Friday, compared to 40% in Europe.

• The percentage of Europeans who are planning to stay away from Black Friday entirely (34%) is double that of Russians (17%).

47%


24

The shopping season in Russia has started earlier than last year

Gift purchases by time period

• Over one third of Russians usually do their holiday shopping after the 15th of December.

• Women usually do their holiday shopping much earlier than men: 36% of women and only 23% of men intend to buy their gifts before the 15th of December.

Stores

Websites

I have been asked to buy specific giftsWord of mouth (friends, neighbours, relatives)

Social media

Television

Newspapers and magazines

None of these

Channels used for gift ideas and recommendations

• This year, one in three Russians will be visiting stores for gift ideas.

• Russians have become less inclined to ask for specific gifts (16%), following a similar trend in Europe.

• Newspapers and magazines are traditionally much less popular for gift ideas in Russia than they are in Europe (4% versus 10%).

• One in three Russians use the Internet to select drinks and food.

Russia 2018 Russia 2019 Europe 2019

Social networks are used to make decisions on the acquisition of music (15%).

Before November

November

1–15 December

16–24 December

25–31 December

January

* Black Friday

22%27%

19%

16%

14%

11%

6%

4%

3%

21%

18%

16%

10%

6%

4%

3%

22%

19%

13%

14%

10%

9%

10%

3%

2019 2018

3% 2%

11% 10%

17% 20%

34% 33%

24% 27%

1%

10%

1%

7%


25

Russians prefer non-cash payments when shopping for gifts

• The number of Russians who prefer to use bank cards for holiday shopping has grown to 63% from 2018, which is higher than the European average (58%).

• Cash is losing popularity as a payment method in Russia, with only one in three purchases paid in cash, down from 41% last year. Consumers in Europe are also shifting away from cash in a similar manner.

• Credit cards are not popular in the Netherlands, accounting for only 6% of purchases, while they are used to pay for every third purchase in Italy.

• Despite their concerns about personal data, the majority of Russians (71%) still prefer to pay for their online holiday purchases with a bank card.

• The share of Russians using mobile payment systems such as Apple Pay, Android Pay or PayPal for their online holiday shopping has decreased by 6% compared with last year.

• Every second purchase both in offline and online stores is paid with a debit card.Europeans preferred debit cards to credit cards in 2019, reversing last year’s trend.

What payment methods are you planning to use for your offline and online holiday shopping?

Offline purchases Online purchases

Debit card

Cash

Credit card

e-Wallet (Apple Pay, Samsung Pay)

Other (cheques, etc.)

Debit card

e-Wallet (Apple Pay, Samsung Pay)

Credit card

Other (cheques, etc.)

33%26%

1% 2%

15%

3%

17%

48%55%


26

Research methodology Details and approachThe survey was conducted in eightcountries in Eastern and Western Europe from 17 September to 20 October 2019.

The respondents are 18 to 65 years old. Information was collected online via a structured questionnaire distributed to a sample of individuals selected from a control group.

In order to adjust the Internet sample to the population of each country, we used statistical weighting based on gender and age in each country.

The Russian sample is more representative of the middle and upper social classes in large cities since we conducted the survey via the Internet.

This survey has been conducted since 1998.

Russia has been covered for more than ten years in a row.


27

Contacts

Ekaterina KirasirovaSenior CoordinatorMoscow, Business Development, Consumer Industry Group in the [email protected]

Vladimir BiryukovPartnerMoscow, Audit, Head of the Retail, Wholesale & Distribution Group in the CIS+7 (495) 787 06 00, ext. [email protected]

Vasilyi Podobedov Senior ManagerMoscow, Audit, Consumer Industry Group in the CIS +7 (495) 787 06 00, ext. [email protected]

Egor Metelkin PartnerMoscow, Audit, Head of the Consumer Industry Group in the CIS+7 (495) 787 06 00, ext. [email protected]

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New Year & Christmas 2020 Spending Survey · Christmas New Year 2020 Spending Survey 4 Key survey...

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