A sudden downturn in consumer gadget mania

The latest consumer spending survey from ChangeWave Research shows “a sudden, huge pullback in U.S. consumer retail spending on electronics — the largest decline since 2002.” The survey of 4,427 consumers, conducted February 18-25, looked at discretionary spending on a range of popular electronic devices, including video game consoles, digital cameras and iPods.

In an unprecedented sign of weakness, only 19% of survey respondents say they’ll spend more on electronics over the next 90 days, compared to 33% who will spend less.

“These results clearly show that the consumer electronics sector is getting whacked,” said Tobin Smith, founder of ChangeWave Research and editor of ChangeWave Investing.

Hardest-hit stores: Best Buy and Circuit City. (But Costco and Wal-Mart will be OK.)

Hardest-hit products: LCD TVs, digital cameras, cell phones and iPods.

Bright spots: The Nintendo Wii, Blu-ray HD DVD players and GPS devices.

And there was little evidence that consumers will be spending their “economic stimulus” tax rebate checks on consumer electronics.

“Rather, our findings point to an increasingly preoccupied American consumer who has fallen out of love with gadgets — at least temporarily,” Smith said. 

Higher gasoline prices may boost online shopping

Higher gasoline prices are causing consumers to change their driving behavior, as well as to cut spending on luxury items and even groceries, according to a survey of 1,000 consumers commissioned by PriceRunner.com. Online retailers may see benefits from higher gas prices as 22% of the respondents indicated that they’re making more online purchases to save on the cost of driving to the store.

Furthermore, 10% said that they’d canceled all or part of their vacation plans as a result of higher gas prices; and 12.8% said they had chosen closer vacation destinations.

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Methodology
Online survey with 1,000 respondents resulting in a +/- 3.1% maximum sampling margin of error at the 95% confidence level. Survey conducted by Amplitude Research, April 2007

Update

Consumers have boosted online spending in part as a way to save on gas, according to a new report released by Decision Direct Research, the marketing research division of Millard Group Inc. The survey of 55,000 consumers showed that 19% of respondents have “significantly” increased their online spending over the past year and another 39% report that their spending has increased “slightly.” When asked why they increased their Internet shopping, “saves gas” posted an increase of 13 points over 2006, while “saves time” increased by six points. — DM News, 13 September 2007