Consumer Spending Uptick Points to Satellite TV

It’s tough to turn on CNBC, or glance at almost any financial newspaper or website and not see a barrage of doomsayers predicting slower consumer spending. In fact, a slowdown in the months ahead appears all but baked into the economic cake.

Well, according to our latest findings, you might want to hold off on putting that cake in the oven just yet.

During the week of March 8-15, we surveyed the ChangeWave Alliance on their consumer spending and shopping patterns for the next 90 days. A total of 3,686 members participated, and there were some surprisingly unconventional results.

Rather than a consumer spending slowdown, the survey found a slight uptick in the spending growth rate going forward.

A total of 37% of respondents say they’ll spend more over the next 90 days compared to the same period a year ago. That’s up 2 percentage points from our January 2007 survey. Importantly, this is the first increase we’ve seen in the consumer spending growth rate since March 2006.

Much of the conventional wisdom out there predicts a slowdown at the lower end of the wage earning spectrum; however, our latest survey results are again at odds with the majority of pundits.

We’ve actually picked up a slight spending improvement across all income levels. Even among households earning less-than $50,000 per year, our survey found 36% saying they’ll spend more over the next 90 days – up 2-points since January.

Where Are The Dollars Going?

Based on the findings, we can expect at least a short term increase in consumer spending going forward. But exactly where will it take place?

One area of upside will be in household repairs and improvements, where 44% say they’ll spend more over the next 90 days and just 16% less – 9-points better than January 2007, though still less than a year ago.

Also on the upswing will be travel and vacation spending, which has experienced a 13-point improvement since January. On the downside, spending on durable goods is slowing, with 19% saying they’ll spend more and 24% saying less.

Less dramatically, for the second consecutive survey we’ve picked up a slight slowdown in consumer electronics spending – although there are still bright spots, particularly in home entertainment and computers.

What’s Hot for the Spring? Laptops, LCDs and Satellite TV

When it comes to home entertainment and computers, we see lots of momentum in both laptops and LCD TVs. Both items topped the list of products consumers plan on purchasing over the next 90 days.

But another place we see real momentum is in the home TV service market – and the big winner here is DIRECTV (DTV). While Comcast )CMCSA) (24%; down 1-pt) remains the current leader among U.S. and Canadian TV service providers, DIRECTV (12%; up 2-pts) shows the most market share momentum – nudging ahead of DISH Network (11%) into the overall lead of the satellite market.
So what really gives in the ongoing battle between Satellite and Cable TV? Longer term, whose got the edge in this race?

Our survey results point to a clear winner: Satellite TV.

• Satellite TV leads the marketplace in terms of customer satisfaction; with satellite customers (84%) reporting much higher satisfaction rates than cable customers (73%). Moreover, Satellite satisfaction ratings have improved 4-points since our previous survey, while cable satisfaction rates have declined 2-points.
• In terms of individual providers, DIRECT TV (87% Satisfied; up 3-pts) is now the industry leader in terms of customer satisfaction and has also experienced the biggest improvement since November. On the other side of the spectrum, Comcast (69% Satisfied; down 7-pts) has experienced the biggest decline.

• Finally, satellite TV is clearly gaining the most from customer switching. A total of 13% of our survey respondents say they plan to switch providers in the next six months and nearly half of these (48%) say they’ll switch to satellite – with DIRECTV (25%; up 3-pts) and Dish Network (19%; up 4-pts) enjoying the biggest gains.

While our Alliance survey results often conflict with conventional wisdom, that’s absolutely OK. Getting an objective measurement of what people are actually doing – as opposed to what the pundits think they will do – is the whole reason why the ChangeWave Alliance was created in the first place.

Jim Woods co-wrote this article.
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This article summarizes the results of a recent ChangeWave Alliance survey. The Alliance is a research network of 10,000 business, technology and medical professionals who spend their everyday lives working on the front line of technological change. For more info on the ChangeWave Alliance, or if you are interested in joining, please click here.