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Welcome to the ShopperScape™ Newsletter April 2009

Sobering reports of continuing job layoffs and more bailouts sent shoppers back into hiding at the end of last month. The percentage of shoppers curbing their short-term retail spending plans surged from 45% in February to 55% in March—equivalent to January’s 55% of shoppers planning to spend less in the coming month. Seven points of the 10-point downshift came from fewer shoppers intending to spend the same amount at retailers in the coming month (Figure 1).

Figure 1

Intentions to Spend More, the Same or Less at Retail Stores in the Coming Month
Compared to This Time Last Year

Source: Retail Forward ShopperScape™, March 2008–2009

Between February and March, shoppers’ pessimism about household members’ employment and income levels increased by 3 and 4 percentage points, respectively.  Year-to-year differences in shopper sentiment about measures of household financial health are pronounced in all areas with the exception of debt—specifically credit card and mortgage and car payment debts (Figure 2). 

• The percentage of shoppers feeling worse off about household members’ job security is now twice the amount of shoppers feeling better off.
• Shoppers’ perceptions of their household income levels also have become more pessimistic.  One-third (32%) believe they are worse off than last year.
• Despite a recent boost in the stock market, shoppers’ views of the value of their investments continue to deteriorate.    
• Areas where shoppers’ perceptions of their financial health seem to be stabilizing include credit card debt level, monthly mortgage and car payments and home values.

Figure 2

Shoppers' Perceived Household Financial Health Compared with Last Year:
March 2009 vs. March 2008 and February 2009

Source: Retail Forward ShopperScape™, March 2008 and February and March 2009

Shoppers are casting a wary eye on the recently passed economic stimulus package.  They are more optimistic about the package helping the country’s economy than their own household’s economic situation (Figure 3).

• Shoppers are divided about whether the economic stimulus package will improve the country’s economy.  Thirty-seven percent are extremely or somewhat optimistic and 37% are extremely or somewhat pessimistic.  Sentiment tilts toward pessimism with the extreme pessimists (16%) outnumbering the extreme optimists (6%).
• Only about one-quarter (26%) are optimistic that the economic stimulus package is going to improve their own household’s economic situation while four out of 10 express pessimism about the plan. 

Figure 3

Level of Optimism about the Recently Passed Economic Stimulus Package

Source: Retail Forward ShopperScape™, March 2009

Comparison of spring spending plans for four diverse categories of goods underscores shoppers’ intentions to pull back on spending across the board—but especially in adult apparel (Figure 4).

• The majority of shoppers (57%) is planning to decrease spending on updating their personal wardrobes this spring (up from 36% last year).
• Parents also are likely to be tightening the reins (34%) on updating their kids’ wardrobes (double last year’s 17%)—albeit to a lesser extent than their own wardrobes.
• Although shoppers are more likely to open their wallets for gardening/landscaping projects than home improvement projects, intentions to spend less in both areas exceed intentions to spend more.  Media reports and other publicity about how vegetable gardens can help consumers save are likely fueling increased interest in spring planting season. 

Figure 4

Plans for Spending This Spring Compared with Last Year

*Among shoppers with children under the age of 18 present in the household
Source: Retail Forward ShopperScape™, March 2009

Two-thirds (67%) of shoppers are celebrating Easter this year.  Households’ most-popular plans include buying Easter candy and preparing Easter meals at home (Figure 5).

• Very few shoppers are buying new Easter outfits this year for themselves (8%) or for their children (13%) this year.

Figure 5

Percentage of Households with Easter-related Plans

Source: Retail Forward ShopperScape™, March 2009

One quarter (25%) of shoppers are observing Lent.  Sacrificing chocolate and sweet snacks rank first and second.  Despite hints from the papacy, very few shoppers have been willing to cut their electronic connections during Lent (Figure 6).

Figure 6

Percentage of Households Giving Up Things for Lent

Source: Retail Forward ShopperScape™, March 2009

ShopperScape™ members will receive a more detailed analysis of current shopping trends and spending plans.  ShopperScape™ members also can request assistance in custom analyses of this information by contacting Rachel McGuire at rmcguire@retailforward.com or Mandy Putnam at mputnam@retailforward.com.

Softgoods Retail Perspectives: Marketing to Recessionistas

Amid a virtually unprecedented cutback on consumer spending on apparel and other discretionary categories, many retailers instinctively turned to price-oriented marketing in an attempt to unload excess inventories and get shoppers back into stores and online.  A few retailers and brands, however, have departed from the strictly price-oriented promotions in hopes that shoppers will be more receptive to messages that value their desire to stay au courant without having to say au revoir to their budget.

These retailers and brands appear to recognize that most shoppers really don’t need another <insert item here> after the spending spree of the past half-decade, regardless of how substantial the price cut is.  Instead, these retailers are trying to connect with shoppers by not only acknowledging their new frugality but also working with them to realize the most bang for their buck.  Clearly these promotions are designed to drive short-term sales in a challenging macroeconomic environment.  However, regardless of how successful they ultimately are, the retailers behind the promotions are poised to benefit in the longer run from the deeper and more respectful relationships they forged with shoppers during these difficult times.

Kelly Tackett
ktackett@retailforward.com

Two Easton Oval
Suite 500
Columbus, Ohio 43219
Voice: 614 355 4000
Fax: 614 355 4059
http://www.retailforward.com

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