new year & christmas 2019 spending survey · new year christmas 2019 spending survey 5 onine r...

New Year & Christmas 2019Spending Survey6 December 2018

New Year & Christmas 2019 Spending Survey

2

Contents

Key survey observations 04

Economy and wealth 07

Russians’ New Year budget structure 11

Omni-channel retailing 17

Consumer behavior 22

Research methodology 26

Contacts 27


3

Deloitte presents its 21st annual global survey of consumer spending ahead of the New Year and Christmas holiday season.


4

Key survey observations

New Year shopping season

Almost one third of respondents (29%) will spend over 30% of their holiday budget during Black Friday. The share of Russians who plan to benefit from Black Friday discounts and promotions has increased from 53% in 2017 to 66% in 2018.

Women generally do their holiday shopping much earlier than men: 42% of women and 21% of men intend to buy their gifts before the 15th of December.

32% — before the 15th of December68% — after the 15th of December

Black Friday

New Year shopping period:





Black Friday


food and drinks

entertainment

gifts

This year

of an average Russian will be RUB 16,900 which is 4% lower than last year’s budget. (RUB 17 600).

actual spending in the last holiday season (RUB 16,000) happened to be 9.1% lower than was originally planned (RUB 17,600)

New Year budget of an average Russian

New Year budget structure:

the holiday budget

Control over the holiday budget:

Fact Budget





Black Friday


The share of Russians who believe that the economy is

has increased significantly from 51% to 61% this year, and is the highest in Europe.

The percentage of respondents who doubt that their purchasing power could increase has increased from 22% tо 30%.

the economy to grow — 9%, anticipate a recession — 47%, 20% — have no idea

Russians do not expect a miracle in 2019

in a recession

?One in five people has no idea of what to expect from the economy.

when compared to the European average

Forecast for 2019:





Black Friday



5

Online or traditional shopping

The share of online gift purchases is 30% and continues to grow.68% — of Russians have difficulty

checking a product’s quality and do not have the same pleasant sensa-tions when shopping online , 5% — of Russians feel that there is a lack of goods in online stores.

Factors restraining sales of fashion goods on the Internet:

Four in five people in Russia are concerned about personal data security when shopping online.

The share of Russians making online purchases using Apple Pay, Android Pay, PayPal and other payment systems is about 30%.

Specialty chains — 27%, hyper- and supermarkets — 24%

Most popular offline shopping sites:

Similarly to last year, money is by far the most desired gift (men: 58%, women: 66%). Second place is occupied by laptops for men (39%) and perfume for women (49%). However, traditionally they are likely to receive chocolates (48%) and cosmetics (38%).

74% of men and 80% of women are going to buy holiday gifts for themselves: smartphones and mobile phones for men (16%), and cosmetics and perfume for women (36%)

split almost in half.

Most popular gifts

First place Second place In reality

domestic brands

foreign brands

Preferences for brands:





Black Friday



6

The Russian retail market regained growth in USD terms

The Russian retail market:ruble sales continue to grow steadily

Size of the retail market (USD bn) Size of the Russian retail market

Russia • In 2017 the Russian retail market has grown in dollar terms for the first time in recent years on the backdrop of the ruble’s appreciation in 2017 and persistent growth in ruble terms. The growth amounted to 25%, which was higher than anticipated (23%).

Europe • In 2017 the Russian retail market accounted for 12% of the entire European market due to a decline in the UK retail market following Brexit in 2016 and thanks to the Russian retail market’s growth in 2017. This put Russia ahead of the UK, in third place after Germany and France. However, the UK is expected to recover lost ground and regain its status as the third largest retail market based on 2018 actual results.

• Retail sales in Russia continue their strong growth in ruble terms: ruble sales are forecasted to increase by 9% in 2018 and continue to grow throughout 2019-2021.

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 2021F2011 20112013 20132015

6% 7%

20152017 20172010 20102012 20122014 20142016 20162018F 2018F2019F 2019F2020F 2020F

25%

1%

• The market is expected to continue its growth in dollar terms in 2019–2021. However, this growth will be rather moderate, and 2020 retail sales in Russia are expected to only come close to 2011 levels.

Source: Economist Intelligence Unit

Russian growth, %

European growth, %

Russian sales, USD bn

Russian share in Europe, %

Source: Economist Intelligence Unit

Russian sales, USD bn (left axis)

Russian sales, RUB tr (right axis)

+8%+7%

+9%+8%


7

Economy and wealth Consumer perceptions and purchasing power


8

Russians do not expect a miracle in 2019

Current perception of the economy

Russia 2018 • The share of Russians who believe that the economy is in a recession has increased from 51% to 61% during 2018.

• Overall, current perceptions of the Russian economy are closer to 2016 levels when over 65% of respondents expressed negative sentiments.

• This year, women are more pessimistic than men, with 64% and 57% respectively citing an economic recession in 2018.

• As compared to 2017, the highest level of pessimism regarding the economy was recorded for elderly Russians. Negative sentiments are expressed by 62% of the respondents in this category as compared with 46% a year earlier.

61%

61%

28%

27%

5%

5%

6%

7%

57%

60%

33%

31%

6%

5%

4%

4%

64%

61% 62%

23%

25% 26%

4%

6%4%

9%

8% 8%

Russia 2017

18–34 35–54 55+

Growth Stability Recession I don’t know

Positive Neutral Negative I don’t know

Average

Average

Male Female

27%

5%7%

61%

37%

7%5%

51%


9

Russians are once again increasingly pessimistic about the future

Expectations of the economy in 2019

Russian level of pessimism regarding the economy

• Only 9% of Russians expect the economy to grow in the next year, and 47% anticipate a recession. One in five Russians have no idea of what to expect from the economy, which is twice as high when compared with the European average.

• Russia demonstrated the highest levels of pessimism, followed by Belgium and the UK (43% each).

Improvement 16% in 2018

Deterioration 33% in 2017

70%

60%

50%

40%

30%

20%

10%

0%20092008

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

2011 2013 2015 2017 2018 2019F2010 2012 2014 2016

9%9%

47%

23%

47%

}

}

• The most optimistic expectations of the European economy were cited by respondents in Portugal: 37% anticipate economic growth in 2019 due to recovery from a long crisis and an increase in domestic demand.

26%

51%

36%

50%

33%37%

30%

54%

66%

51%

61%

47%

Improvement

Deterioration

Stabilisation


10

Purchasing power is declining gradually

• Pessimistic expectations about the economy did not significantly affect the purchasing power of Russians in 2018. The number of Russians who feel that their purchasing power has deteriorated remained at 45%, the same as last year.

• 30% of respondents expect their purchasing power to decline in the next year (22% in 2017). The share of Russians who believe that their purchasing power will improve in the next year has fallen to 18.6% (23% in 2017).

• Young Russians (aged 18-34) are still optimistic: the share of those who feel that their purchasing power improved has increased from 20% in 2017 to 22% in 2018.

45,6% 11%

44% 11,8%

35,1% 21,7%

44,5% 11,9%

46,9% 10,4%

47,4% 8,1%

53,2% 4,5%

33% 18%

Movements in purchasing power, %

80%

70%

60%

50%

40%

30%

20%

10%

0%20092008 2019F2011 2013 20152010 2012 2014 2016 2017 2018

• People with higher incomes are traditionally more optimistic about their purchasing power. The share of Russians who believe that their purchasing power will improve in the next year decreased by only 2% to 23.5% (25.5% in 2017).

11%

19%

46%

31%

44%

53%

12%9%

Russia:

2018

2017

Male

Female

18-34

35-54

55+

Europe2018

You have less to spend You have more to spend

You have less to spendYou have more to spend


11

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


12

The average Russian’s holiday budget is expected to be 4% lower than last year’s spending

The average Russian’s holiday spending in euros

Holiday budget structure in euros

• This year, the average Russian’s planned holiday budget amounts to RUB 16,900, which is 4% lower than last year’s budget of RUB 17,600.

• Economic instability has taught Russians to balance their checkbooks over the holidays: actual spending in the last holiday season (RUB 16,000) happened to be 9.1% lower than was originally planned.

• The average Russian’s holiday budget structure is expected to remain unchanged: gifts (42%), food and drinks (47%), and entertainment (11%).

• Gifts account for 53% of Europeans’ budgets, which is 11% higher than those of Russians.

Exchange rate used this year — RUB/EUR 75.75Prior year — RUB/EUR 67.1

€ 600

€ 500

€ 400

€ 300

€ 200

€ 100

€ 0

€ 100€ 0 € 300€ 200 € 400

209

88

94

135

101

104

51

23

25

20092008 2011 2013 20152010 2012 2014 2016 2017 2018

€ 245

€ 250

€ 262€ 223

€ 253

€ 212

• Men began to plan their holiday budgets more thoroughly: 47% stated that their actual spending was in line with their budget (versus 41% in 2017). The share of women who gave this response remained at 40%.

Actual spendingPlanned budget

Russia Budget 2018

Russia actual 2017

Europe Budget 2018

Gifts Food and beverages Entertainment


13

Most Russians want to receive money as a gift

Most desired gifts

• The top 10 most desired gifts remained almost the same. Money traditionally ranks well ahead of all other most desired gifts.

• Books remain the most desired gift in Europe (43%), followed closely by money (42%). Travel did not reach higher than ninth place (22%).

• Men’s gift preferences did not change much in 2018. They still prefer to receive cash or a laptop as a gift.

• Books, however, lost their position as a desired gift to food and beverages.

• The list of the most desired gifts for women did not change in 2018.

• In addition to the last year’s preferences, women cited health goods (organic products, food supplements) (+ 5%) and kitchen appliances (+ 3%).

Men Women

62%

58% 66%39%

39% 49%

37%

35%47%

36%

28%41%

33%

26% 38%

31%

29%

27%

27%

27%

Money

Travel

Smartphone/mobile phone

Laptop/PC computer

Cosmetics/perfume

Chocolates

Jewelry/watches

Event tickets

Books

Clothes/shoes

Money

Laptop/PC computer

Smartphone/mobile phone

Travel

Food and beverages

Money

Cosmetics/perfume

Travel

Beauty care/massage/spa

Chocolates


14

Chocolates, cosmetics and perfume remain the most popular gifts

Most popular gifts

• Chocolates, cosmetics and perfume remain the most popular gifts Russians buy for others.

• Food and beverages advanced two positions in the ranking, outscoring gift certificates and books.

• Russians’ patterns of selecting gifts for men are relatively stable: the top 5 most popular gifts for men remain virtually unchanged year-in and year-out.

• At the same time, gifts choices of Russians are still very different from those of Central Europeans who tend to buy books, clothes and games (41%, 25% and 14% respectively).

• The higher demand for chocolates and money is accompanied by a weaker demand for cosmetics and gift vouchers (5%). These shifts, however, did not affect the overall ranking of the top gift choices.

• Though travel is the most desired gift for women, they are most likely to receive something else (it is ranked only 27th).

48%

36% 57%38%

26% 46%

31%

27% 34%

18%

18% 22%

17%

16% 21%

17%

16%

14%

13%

12%

Chocolates

Cosmetics/perfume

Money

Food and beverages

Books

Gift vouchers

Cooking accessories

Gift sets

Smartphones/mobile phones

Event tickets

Chocolates

Money

Cosmetics/perfume


Books

Chocolates

Cosmetics/perfume

Money

Gift vouchers

Cooking accessories

Men Women


15

Russians plan to buy gifts for themselves

Most popular gifts

• In 2018, 74% of men and 80% of women plan to buy holiday gifts for themselves. The most popular gifts are smartphones and mobile phones for men (16%) and cosmetics and perfume for women (36%).

22%

16% 36%19%

16% 24%

18%

13% 22%

17%

13% 17%

15%

12% 15%

14%

12%

11%

10%

10%

Cosmetics/perfume

Clothes

Chocolates

Food and beverages


Books

Travel

Event tickets

Computer

Health goods (vitamins, food supplements, etc.)


Food and beverages

Clothes

Books

Chocolates

Cosmetics/perfume

Clothes

Chocolates

Food and beverages

Books

Men Women


16

Construction kits and learning games are losing popularity as gift choices for teenagers

Gift choices for teenagers (12 to 18 years of age) Gift choices for children under 12 years of age

• In 2018, smartphones/mobile phones are gaining popularity as gifts for teenagers, while gaming consoles and construction kits are losing ground.

• Cash is still a popular gift for teenagers.

• Children under the age of 12 are more likely to receive learning games, construction kits and dolls.

37% 40%

24% 32%

19% 30%

18% 30%

18% 25%

10% 19%

10% 20%

10% 19%

8% 17%

6% 17%

Chocolates

Money


Games

Books

Consoles

Learning toys

Cosmetics/perfume

Construction kits

Tabletop games

Construction kits

Dolls

Learning toys

Learning games

Games

Baby goods (toys and clothes)

Books

Clothes and shoes

Electronic toys

Sports and leisure equipment


17

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


18

Search engines (Google, Yahoo)

Online stores with one or more physical stores

Comparison sites (pricing)

Online stores without physical stores

Websites of brands/suppliers

Websites with coupons and offers

Email newsletters and online leaflets I receive via email

Forums and blogs

None of these

The share of online gift purchases in Russia is growing steadily

Where do people buy gifts?

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

2011 2012

2013 2014

2015 2016

2017 2018

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

Russia

Europe Russia

• The share of online gift purchases in Russia is at approximately 30% and is likely to continue growing. However, Russia is still behind Europe where 40% of gifts are purchased online.

• The most common and popular way to find desired gifts in Russia as well as in Europe in 2018 is through search engines with contextual advertising, followed by online shops of offline retail chains.

• Compared to Europeans, Russians tend to be more thorough when buying gifts. People use special websites to compare prices.

Europe

22%20%

25% 24%27% 26%26% 26%

29%

23%

35%37%

40%

25%

29% 30%

When shopping for home appliances, Russians tend to use price comparison sites (63%) and websites of manufacturers for one or more stores (57%).

Manufacturers’ websites and search engines are also the most popular options for fashion clothing shopping (54% and 51% respectively).

Food and beverages are most often searched for on price comparison sites and in search engines, as indicated by approximately 41% of respondents.


19

Russians particularly like online stores because of the opportunity to learn about other peoples’ opinions on products as well as the ease of finding and selecting products

Offline stores Online stores

• Online shopping is particularly attractive to Russians because it provides easy access to other customers’ reviews as well as the possibility of finding goods more quickly and easily than in a physical store.

• The opportunity to make purchases at any convenient time has also emerged as one of the key drivers for online shopping, pushing ‘acceptable prices’ out of the top 5 advantages of online stores.

• Four out of five people in Russia are concerned about personal data security when shopping online, which hinders the development of the Internet as a sales channel.

• Physical stores are still above the competition in terms of the ease of product exchange or return, after-sale service and protection of personal data.

I immediately receive the products I purchase

It is easy to exchange or return goods

After sale services (repair)

Good protection of my personal data

Safe payment services

I can get other consumers’ opinions on products

It’s easy to search for and choose what I need

I can compare prices easily

Broad assortment

I can make purchases at any time convenient for me

01 01

02 02

03 03

04 04

05 05


20

Specialty chains and hypermarkets outscore traditional department stores

• Most people in Russia will buy gifts in specialty chains (27%), as well as hyper- and supermarkets (24%).

• Specialty stores have been gradually loosing ground (1–2% annually), while hypermarkets and traditional local stores have seen a rise in demand for gifts.

Retail formats used to purchase gifts

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

Specialty chains (selling toys, books, DIY, clothes)

Hypermarkets/supermarkets

Traditional department stores

Traditional local shops

Factory outlet stores

Luxury stores

Russia 2018 Russia 2017 Europe 2018

• In contrast to Russians, Europeans are loyal to traditional local shops, which came in second for gift shopping after specialty chains.


21

The difficulty of checking an item’s quality is the key constraint for online fashion shopping (clothing, jewelry, accessories).

Constraints for online fashion shopping Russians’ brand preferences when shopping for fashion goods

• Over 60% of Russians still prefer to do their fashion shopping in physical stores.

• For 68% of Russians, the pleasant sensations from shopping in physical stores and the difficulty of checking an item’s quality when shopping online are the key factors preventing them from buying more fashion goods on the Internet. Only 6% of Russians feel that there is a lack of online stores for goods in this category.

• Young Russians aged 18-34 prefer foreign brands to local ones, while elderly people tend to buy domestic products.

Payment security Quality of product information Pleasant sensations of shopping offline Difficulty of checking an item’s quality Lack of online stores selling fashion goods

61,2%

38,8%47,8%

37%

52,2%

63%

I prefer Russian brands I prefer foreign brands

18–34 35–54 55+

13%

12%6%

44%

25%


22

Consumer behavior Decision making and timing of purchases


23

The shopping season in Russia has started earlier than last year

The Black Friday appeal for holiday shopping is growing, with more Russians believing they will benefit from the deals offered

Share of gift purchases by time intervals

• Russians traditionally do their holiday shopping after the 15th of December. However, the share of Russians intending to buy their gifts before the 15th of December has increased to 32% this year as compared to 29% last year.

• Women generally do their holiday shopping much earlier than men: 42% of women and only 21% of men intend to buy their gifts before the 15th of December.

• Almost one third of respondents (28.9%) will spend over 30% of their holiday budget during Black Friday. The share of Russians who plan to leverage offers during Black Friday has increased from 53% in 2017 to 66% in 2018.

• In 2018, the share of Russians who are not aware of Black Friday decreased to 6% from 9% in 2017.

• Ninety-nine percent of respondents with above-average incomes are aware of Black Friday and make use of it. People with lower incomes are the least eager to leverage Black Friday offers, which is most likely due to their lack of trust in sellers and promotions.

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

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

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

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

20182018

20172017

28%2%

27%2%

38%10%

26%9%

12%

20%

15%

18%

9%

33%

13%

34%

8%

27%

10%

31%

6%

1%

7%9%

1%

5%

Before November

November

1–15 December

16–24 December

25–31 December

January

* Black Friday


24

Physical stores

Websites

I was directly asked for it

Word of mouth: friends/neighbors/family

Social media

TV

Newspapers and magazines

None of these

Information channels consumers use to get ideas and advice on gifts

Main drivers of holiday spending

• Russians as well as Europeans are the most influenced by the Internet and in-store advertisements and promotions.

• Russians use word of mouth more actively than Europeans (18% versus 14%), asking their relatives and friends to buy them pre-selected gifts.

• Newspapers and magazines are traditionally much less popular in Russia for gift ideas than they are in Europe (4% and 11% respectively).

21%

19%

14%

14%

10%

9%

11%

3%

22%

21%

18%

16%

9%

7%

4%

3%

Russia Europe

• The influence of promotions on holiday spending decreased from 32% in 2017 to 27% in 2018. People with the lowest incomes are the least susceptible to promotions.

• Income growth remains the main driver encouraging 47% of Russians to spend more during the holiday season. This figure is nearly twice that for Europe (22%).

Growing personal incomes

Not wanting to think about economic instability

Promotions

Growing economic stability

Offers and advice

Multiple product innovations

Consumer reviews and ratings

Acceptable borrowing terms

01 47%

02 40%

03 27%

15%06

04 22%

10%07

05 16%

3%08

Stores are the most popular channels for getting advice and making decisions when shopping for home appliances and portable electronic devices (32% and 33% respectively). The Internet is used as a source of information on home goods (23%) and books (22%).


25

Russians prefer non-cash payments when shopping for gifts

• Over half of Russians (57%) prefer using bank cards for their holiday shopping, which is in line with the European average.

• Using debit cards is the most popular payment method both in offline and online stores. In Russia, they are used by 43% of respondents versus 38% in Europe. On the other hand, more Europeans (30%) than Russians (14%) prefer shopping with a credit card.

• Despite their concerns over personal data safety, the majority of Russians (52%) prefer to pay for their online holiday purchases with a debit card.

• The share of Russians making online purchases using Qiwi Wallet, Yandex.Money and other payment systems is about 30%.

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

Offline purchases Online purchases

Debit card

Cash

Credit card

Other (checks, etc.)

Debit card

Qiwi Wallet, Yandex.Money, etc.

Credit card

Other (checks, etc.)

42% 32%

1% 3%14% 13%

43% 52%


26

Research methodology Details and approachThe survey was conducted in ten countries in Eastern and Western Europe from 5 to 9 October 2018.

The respondents are 18 to 65 years old. Information was collected via the Internet with a structured questionnaire distributed to a sample of individuals selected from a controlled group.

In order to adjust the Internet sample to the population of each country, we used ex-post 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 the survey was carried out 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 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 Group in the CIS +7 (495) 787 06 00, ext. [email protected]

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

deloitte.ruAbout Deloitte

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