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Consumers set to spend more this spring, Deloitte says

BY Allison Cerra

NEW YORK — Consumers this spring are planning to spend the same or more at retail than last year, according to the latest Deloitte survey.

In its 2012 Spring Consumer Pulse survey, Deloitte found that more than two-thirds of consumers surveyed (67%) said they plan to spend the same or more, a 9% increase from 2011, with many of them feeling slightly better about the economy than this time last year (57% versus 52% last year).

When it comes to where these respondents plan to shop, almost two-thirds (65%) said they’re shopping more online to get the best product or price, an increase of 13 percentage points from 2010. Deloitte also noted a boost in social networking and mobile activity, as 46% of smartphone owners indicated they have used phones to research product prices online — an increase of 10 percentage points from 2011 — while 45% of respondents said they’re interacting with retailers through social networking sites, the research firm said.

Despite these sentiments, inflation remains a top concern, Deloitte said. When asked what might cause them to hold back spending in the months ahead, 76% said higher prices generally, followed by higher energy costs (69%) and higher medical bills (44%). Similarly, 80% said they expected to spend more on food this year, while 52% agreed that new spring merchandise seems to have higher prices.

The 2012 Spring Consumer Pulse survey was conducted between March 5 and 7 and included a nationally representative sample of 1,000 consumers.

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Social media could soften impact of negative word of mouth

BY Allison Cerra

ANN ARBOR, Mich. — Social media may have the ability to ease negative word-of-mouth impact, according to a leader in customer experience management solutions.

In its annual Call Center Satisfaction Index, CFI Group noted a counter-intuitive impact of social media commentary and traditional complaining when observing the increased use of social media to comment on the call center experience. What’s more, CFI Group said, the number of positive experiences and positive posts seemed to be outweigh the negative word-of-mouth in volume, despite the fact that a bad experience may increase the odds that someone will tell others. In 2011, CFI found that more than one-quarter of respondents (27%) had tried to resolve their issues elsewhere prior to resorting to working with the call center. The primary alternate channel was the Web.

"What we are seeing is that, if you have a bad experience, you post it once on Facebook for all to see and then you’re done with it," said Terry Redding, director of development and delivery for CFI Group. "By the same token, we are seeing good experiences posted in the same way. In fact, we’ve observed that positive comments generally outweigh negative ones almost as a rule.

"This is the first year since we’ve fielded that study that we’ve seen a decrease in overall score on the private sector side," Redding added. "We feel the drop is due to an increasing number of easier calls being offloaded to self-service channels like the Web, leaving the more complex cases going to the call centers."

Additional findings of the 2011 index included:

  • On the private-sector side, property and casualty insurance call centers led all sectors at 80, in spite of a one-point drop from last year;

  • Health insurance call centers experienced the largest gain of four points at 75. The strong showing by insurance companies bodes well for an industry faced with change and increased competition;

  • Personal computer call centers were the only other group that experienced an improvement in their score, an increase of just two points from 73 to 75;

  • On the government side, the Veterans Affairs agency topped the list with an overall score of 72, while the Social Security Administration and Department of Education followed at 70;

  • There remains a significant gap in satisfaction between onshore versus offshore centers; and

  • Call centers that can provide first-call-resolution and minimize call transfers score much higher. This suggests that technology that empowers call representatives may be a good investment, CFI Group said.

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Walgreens: March sales down; April Easter will benefit front-end sales

BY Michael Johnsen

DEERFIELD, Ill. — Walgreens posted March sales of $6 billion, a decrease of 4.3% compared with the same month in fiscal year 2011.

“We continued to see growth in our front-end business, and with Easter falling on Apr. 8 this year, we anticipate that much of our Easter sales will be reflected in our April results,” Walgreens EVP and CFO Wade Miquelon said. “In addition, our new advertising circular strategy has helped drive profitable sales.” Walgreens launched its new weekly ad circular, with additional online savings, in mid-February.

Prescriptions filled at comparable stores decreased 11.4% in March. The negative impact on comparable store prescriptions filled due to no longer being part of the Express Scripts pharmacy network was 10.7 percentage points. Calendar day shifts in March, which had one additional Friday and Saturday, and one fewer Tuesday and Wednesday, compared with March 2011, negatively impacted prescriptions filled in comparable stores by 2.1 percentage points. And lower incidence of flu negatively impacted comparable store prescriptions filled by 0.7 percentage points.

Prescriptions processed by Express Scripts comprised 12.6% of Walgreens prescriptions in March 2011.

March pharmacy sales decreased 8.4%, while comparable-store pharmacy sales decreased 11.1%.

Prescriptions filled in March were down across the industry, according to a research note published by Credit Suisse on Tuesday. Citing IMS Health, Credit Suisse noted that prescriptions were down 120 basis points in March, which represented a marginal improvement versus the 170 basis point decline in February. "The flu season now seems to be trailing off without ever really materializing this year," noted Ed Kelly, Credit Suisse research analyst. "The [Centers for Disease Control and Prevention] reported that only 1.9% of patients visiting healthcare centers displayed flu-like symptoms, slightly below the 2.1% reported during the same period last year."

Total front-end sales were down 2.5%, compared with the year-ago period, though comparable store front-end sales were up 1.2%. Customer traffic in comparable stores decreased 1%, while basket size increased 2.2%.

Sales in comparable stores decreased by 6.8%. The effect of calendar day shifts negatively impacted total comparable sales by 1.3 percentage points.

Calendar year-to-date sales were $17.7 billion, a decrease of 1.8% from $18 billion in 2011. Fiscal 2012 year-to-date sales for the first seven months were $42.8 billion, up 1.6% from $42.1 billion in fiscal 2011.

The company will report combined comparable-store sales for March and April with its April sales results.

Walgreens opened eight stores during March, including one relocation.

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