According to the 2014 survey, Deloitte’s 17th annual analysis of year-end spending, almost half of the Luxembourg participants (47%) indicated a negative opinion when asked about the future state of the local economy, as compared to 39% in 2013. Even though Luxembourg still maintains its second position (behind the UK) in the ranking of forecast budget for year-end spending per household (€665.-), the feeling of pessimism is clearly present with a decrease of 12,5% in the predicted budget, as compared to the actual spending of 2013 (€760.-), and an even larger decrease as compared to the estimated budget of 2013 (€825.-).
The budget split, however, varies, with an increase in the share of the budget for gifts (61% in 2014 vs. 55% in 2013) and a decrease in the share for food (28% in 2014 vs 36% in 2013). Further analysis shows that 60% of the budget allocated to gifts stays in the family with presents for oneself (11%), one’s partner (21%) or children (28%).

A bleak outlook for Luxembourg consumers

Even though the average opinion of the local consumers on the expected state of the economy is fairly negative, the younger generation (18-24 years of age)  has a more positive outlook with 26% in the positive category, as compared to over half of the respondents over 35 being negative towards the future (54% answered negative).

Though still below the European average (46%), local participants think that they have less to spend than last year (41% in 2014, compared to 31% in 2013). Once again, Luxembourg youngsters are less pessimistic about their economic situation, with 25% of 18 to 24 year-olds indicating an increase in spending power. For the expected spending power (2015), even more (48%) think that their spending power will further deteriorate.

All we want is books and all we get is books

In 2014, books remain both the most desired (48%) and the most given gifts (43%), throughout all age categories.

The surveyed adult population wants to receive money in 2nd place (30%) whereas the 2nd most popular given gift is cosmetics/perfume (26%).
Among teenagers aged between 12 and 18 years, games have dropped to second place, after books and followed by money for most given gifts. Smartphones have also made their entry onto the list at 10th place this year.

For children under 12 years, books are also the most commonly chosen gifts, followed by games and experimental/science gifts. In general, consumers ensure that the toys which are given have an educational element and further focus on buying useful gifts.

As Georges Kioes, partner at Deloitte Luxembourg and responsible for the commercial and industrial sectors, explains: “Even though the budget per household for year-end spending has dropped to some extent, Luxembourg consumers attach a lot of importance to the tradition of gift-giving, especially in terms of offering useful and educational presents. It is also clear that the local participants favour close family and children when allocating the budget.”

Purchasing strategy: first half of December continues to dominate

Once again, a majority of Luxembourg’s consumers (37%) confirmed purchasing their holiday gifts between 1 and 15 December, 29% by December 24 and 25% in November. Only 2% indicated buying gifts after Christmas.

Online shopping on the rise, but physical stores still in the lead

Regarding the multi-channel experience, a majority of the consumers indicated combining online and physical stores for search activities (38%), followed by online searching (33%) and search in stores (29%).
When it comes to actual purchases, the rising trend of online shopping is clear (36% in 2014 compared to 30% in 2013), with movies, music and books being the top three items bought online.
M—commerce, on the other hand, has shown an increase, with 46% stating that they have used smartphones to purchase online, compared to 32% in 2013. The average, still remains above the European average (39%). Nevertheless, only 36% of Luxembourg consumers state their intention to do it in the future.

In Luxembourg, far in the lead are physical stores, where 64% of the purchases are made.

Customer relationship still important

In 2014, 74% of Luxembourg consumers favour collecting and taking away their purchases immediately after shopping, compared to 52% on a European average. Only 17% of local participants have a preference for home delivery, allowing these participants to avoid crowded stores.

As regards to online ordered gifts, 95% were delivered on time last year.

The top three strengths for physical stores continue to stay stable, with after sales services (85%), protection of personal data (80%) and as main strengths of e-commerce safety in respect of payment (79%) and access to consumer opinion (77%), flexibility in when and where to shop (77%), and easy price comparison (72%).

When asked what would improve their shopping experience, local consumers revealed lower prices, customer relationship and home delivery as their top three.

The full report with all results of the survey is available on the Deloitte Luxembourg website at http://www2.deloitte.com/lu/christmas-survey-2014.