Principal Financial Group's Luke Vandermillen
Principal Financial Group's Luke Vandermillen

Survey results point to shifts in consumer spending patterns

While the holiday season has just concluded and the numbers are still being crunched, do not be surprised if 2016 data confirms established shifts in consumer behavior, Luke Vandermillen suggests.

Mr. Vandermillen is the vice president at Principal Financial Group, a financial services company. Each year they release Well-Being Index: American Worker, a report summarizing the spending habits of everyday Americans. Results are compared against those of previous years to identify shifts in consumer behavior.

Americans still planned to spend on the holidays, but how they spend it is undergoing a significant shift, Mr. Vandermillen said.

“We are definitely seeing a number of different trends emerging from this year’s survey. There is more of a shift to online shopping. The crowded mall is less appealing.”

One in three (32 per cent) said their primary shopping method would be online in 2016, up from 20 per cent in 2015. More shoppers expected to be lured by Thanksgiving deals, as 22 per cent planned on beginning shopping on Black Friday 2016, a 50 per cent increase from 2015.

“In the typical two-worker household, both are working busy jobs,” Mr. Vandermillen continued. “Between careers and children’s activities, people are pressed for time, and online shopping is more convenient.”

Principal Financial Group's Luke Vandermillen
Principal Financial Group’s Luke Vandermillen

That hectic lifestyle may be the reason why, at 25 per cent, dining out was identified as the biggest budget busting activity.

The increased convenience of mobile devices is seen in more than just increased online shopping. People are even investing in their 401 Ks via their mobiles.

But it isn’t as simple as creating a website and waiting for people to flock to it, Mr. Vandermillen cautioned. You have to personalize the process yet keep it simple. That is why smart financial services companies are investing in different ways to reach their clients who are saving for retirement.

“They have to meet people where they are,” Mr. Vandermillen said. “It’s not a workplace meeting.”

Recent improvements in video technology make it easier for investors to meet on their own time at a site and via a device of their choosing.

Younger investors also have much different expectations for the future than most older folks.

“As people get closer to retirement, they worry about saving enough so it lasts in retirement,” Mr. Vandermillen said. “(Most) younger employees are not under any misconceptions about (the prevalence) of traditional pension plans.”

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