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Welcome to the ShopperScape™
Newsletter September 2008
- Expect shoppers to continue to look for savings in a variety of ways.
- Anticipate that different generations of shoppers will employ different tactics to save money.
- Watch for Gen Y shoppers to trade down at least until they can afford to indulge themselves again.
- Understand that Young nest-builders, in particular, are feeling the economic strain of rising costs and tightening credit.
- Anticipate Baby Boomers to watch their wallets most carefully near term.
- Expect senior shoppers with more time on their hands and less urgency to spend on material goods to seek out sales to rationalize parting with their money.
- Determine whether your shoppers are most likely deal seeking, limiting their shopping or trading down, and plan accordingly.
Weakening Trend Continues
A steady pullback in spending plans since February paused in July—likely in response to tax rebates and the back-to-school season. But shopper pessimism resumed in August (Figure 1).
- The percentage of shoppers planning to spend less during the next month jumped to 53% in August. Of the four cohort segments examined, Baby Boomers are the most cautious about their spending plans.
- The percentage of shoppers planning to spend more declined from July (14%) to August (9%). Gen Y shoppers are less pessimistic about future spending plans than their elders.
Figure
1
Compared to this time last year, in the next month do you plan to…?
|
All Shoppers |
|
Generation Y (1982 to 2000 birth years) |
Generation X (1965 to 1981 birth years) |
Baby Boomers (1946 to 1964 birth years) |
Pre-Boomers |
|
February 2008 |
March 2008 |
April 2008 |
May 2008 |
June 2008 |
July 2008 |
August 2008 |
|
August
2008 |
August
2008 |
August
2008 |
August
2008 |
| Spend much/somewhat more at retail stores than you did last year |
14% |
12% |
12% |
12% |
10% |
14% |
9% |
|
15% |
10% |
8% |
6% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Spend about the same at retail stores as you did last year |
59% |
48% |
44% |
39% |
39% |
41% |
38% |
|
36% |
40% |
36% |
40% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Spend much/somewhat less at retail stores than you did last year |
28% |
40% |
44% |
49% |
52% |
45% |
53% |
|
48% |
50% |
56% |
54% |
Highlighting/bolding indicates significant differences between segment percentage vs. all shoppers in August 2008
Source: TNS Retail Forward ShopperScape™
Changes in the Way Americans Shop
The economic downturn has changed the way three-quarters of shoppers shop—either significantly (34%) or somewhat (41%) (Figure 2).
- Gen Xers—in their nest-building years—are most likely to say the downturn has changed the ways they shop.
- In contrast, Pre-Boomers’ shopping behaviors are least significantly affected by the economic downturn likely because many of them are retired and have already curbed their discretionary spending.
Figure
2
How much has the downturn in the U.S. economy changed how you shop this year?
|
All Shoppers |
|
Generation Y
(1982 to 2000
birth years) |
Generation X
(1965 to 1981 birth years) |
Baby Boomers
(1946 to 1964
birth years) |
Pre-
Boomers (prior to 1946) |
Significantly |
34% |
|
39% |
37% |
35% |
26% |
Somewhat |
41% |
|
39% |
40% |
43% |
40% |
Not very much |
20% |
|
17% |
18% |
18% |
27% |
Not at all |
5% |
|
5% |
5% |
4% |
6% |
Highlighting/bolding indicates significance difference between segment percentage vs. all shoppers
Source: TNS Retail Forward ShopperScape™
Shoppers are employing a variety of tactics to save money—some of which may lead to long-term changes in shopping behavior, especially among shoppers such as members of Gen Y who are still honing their shopping skills (Figure 3). Popular tactics can be grouped roughly into three categories:
- Deal-seeking behaviors, such as taking advantage of good sales/deals (65%), doing more price comparison shopping (52%) and using more coupons (47%). Likely because they have more time to seek deals, this is a particularly popular strategy among Pre-Boomers.
- Limiting behaviors, such as buying only things one truly needs (65%), buying fewer things (55%), shopping less often (54%), postponing purchases (47%), buying only items needed in the near term (40%) and using/keeping items longer before buying replacements (35%).
- Trading down—products, brands or stores—such as buying fewer luxury items (51%), buying less expensive versions of products (45%), buying more store brands (43%), doing more shopping at discount and value retailers (37%) and trading down to less expensive brands (33%). Trading down is most popular among Gen Y currently.
Less popular are pantry-stocking or hoarding tactics such as buying in bulk quantities (23%) and stocking up on items expected to rise in price (21%).
Figure
3
How has your shopping behavior changed this year?*
|
All Shoppers |
|
Generation Y
(1982 to 2000
birth years) |
Generation X (1965 to 1981 birth years) |
Baby Boomers (1946 to 1964 birth years) |
Pre-Boomers (prior to 1946) |
| Taking advantage of good sales/deals |
65% |
|
60% |
62% |
67% |
71% |
| |
|
|
|
|
|
|
| Buying only things I truly need |
65% |
|
63% |
63% |
67% |
67% |
| |
|
|
|
|
|
|
| Buying fewer things |
55% |
|
56% |
54% |
57% |
56% |
| |
|
|
|
|
|
|
| Shopping less often |
54% |
|
57% |
50% |
56% |
56% |
| |
|
|
|
|
|
|
| Doing more price comparison shopping before making a purchase |
52% |
|
49% |
48% |
54% |
56% |
| |
|
|
|
|
|
|
| Buying fewer luxury items |
51% |
|
54% |
49% |
51% |
52% |
| |
|
|
|
|
|
|
| Postponing purchases |
47% |
|
49% |
47% |
47% |
45% |
| |
|
|
|
|
|
|
| Using more coupons |
47% |
|
51% |
47% |
45% |
48% |
| |
|
|
|
|
|
|
| Buying less expensive versions of products |
45% |
|
58% |
48% |
42% |
40% |
| |
|
|
|
|
|
|
| Buying more store brands instead of national or high-end brands |
43% |
|
47% |
43% |
42% |
44% |
| |
|
|
|
|
|
|
| Buying only items needed in the near term |
40% |
|
44% |
39% |
39% |
40% |
| |
|
|
|
|
|
|
| Doing more shopping at discount and value retailers |
37% |
|
42% |
37% |
38% |
35% |
| |
|
|
|
|
|
|
| Using/keeping items longer before buying replacements |
35% |
|
36% |
35% |
35% |
35% |
| |
|
|
|
|
|
|
| Trading down to less-expensive brands |
33% |
|
44% |
35% |
31% |
31% |
| |
|
|
|
|
|
|
| Buying in bulk quantities |
23% |
|
27% |
25% |
21% |
21% |
| |
|
|
|
|
|
|
| Stocking up on items expected to rise in price |
21% |
|
23% |
18% |
23% |
24% |
| |
|
|
|
|
|
|
| Other/some other way |
4% |
|
5% |
5% |
4% |
4% |
*Among shoppers who have significantly or somewhat changed their shopping habits due to the U.S. economy
Highlighting/bolding indicates significance difference between segment percentage vs. all shoppers
Source: TNS Retail Forward ShopperScape™
According to shoppers, deal-seeking behaviors—common prior to the economic downturn—and limiting behaviors are the ones most likely to stick when an upturn occurs (Figure 4).
- Pre-Boomers say they are most likely to permanently adopt some of their deal-seeking and limiting tactics. But, this is the generation with the most time resources to seek out bargains and also the generation most likely to be purging their closets than filling them.
- Gen Y shoppers are less likely to permanently adopt the “simple life” although a protracted downturn and tough job market could affect their shopping patterns long term.
A significant part of the population intends to continue to trade down to save money—e.g., buying fewer luxury items, buying less expensive versions of products, buying more store brands and doing more shopping at discount and value retailers (Figure 4). These are the behaviors that will most affect the retail landscape.
Figure
4
Please select which shopping behaviors you will likely continue as the economy improves.*
|
All Shoppers |
|
Generation Y (1982 to 2000 birth years) |
Generation X (1965 to 1981 birth years) |
Baby Boomers (1946 to 1964 birth years) |
Pre-
Boomers (prior to 1946) |
| Taking advantage of good sales/deals |
57% |
|
52% |
52% |
59% |
63% |
| |
|
|
|
|
|
|
| Buying only things I truly need |
50% |
|
41% |
46% |
54% |
55% |
| |
|
|
|
|
|
|
| Doing more price comparison shopping before making a purchase |
42% |
|
40% |
38% |
45% |
46% |
| |
|
|
|
|
|
|
| Using more coupons |
39% |
|
38% |
39% |
39% |
39% |
| |
|
|
|
|
|
|
| Shopping less often |
34% |
|
25% |
31% |
36% |
40% |
| |
|
|
|
|
|
|
| Buying fewer things |
34% |
|
31% |
31% |
36% |
36% |
| |
|
|
|
|
|
|
| Buying fewer luxury items |
33% |
|
30% |
31% |
34% |
36% |
| |
|
|
|
|
|
|
| Buying less expensive versions of products |
32% |
|
37% |
34% |
30% |
29% |
| |
|
|
|
|
|
|
| Buying more store brands instead of national or high-end brands |
31% |
|
30% |
29% |
30% |
34% |
| |
|
|
|
|
|
|
| Doing more shopping at discount and value retailers |
29% |
|
29% |
28% |
29% |
28% |
| |
|
|
|
|
|
|
| Buying only items needed in the near term |
25% |
|
25% |
23% |
24% |
29% |
| |
|
|
|
|
|
|
| Using/keeping items longer before buying replacements |
24% |
|
25% |
22% |
26% |
26% |
| |
|
|
|
|
|
|
| Postponing purchases |
23% |
|
23% |
22% |
24% |
24% |
| |
|
|
|
|
|
|
| Trading down to less-expensive brands |
20% |
|
25% |
20% |
18% |
21% |
| |
|
|
|
|
|
|
| Buying in bulk quantities |
17% |
|
18% |
19% |
16% |
17% |
| |
|
|
|
|
|
|
| Stocking up on items expected to rise in price |
15% |
|
17% |
12% |
16% |
16% |
| |
|
|
|
|
|
|
| Other/some other way |
2% |
|
1% |
3% |
2% |
2% |
| |
|
|
|
|
|
|
| None of the above |
3% |
|
6% |
4% |
3% |
2% |
*Among shoppers who have significantly or somewhat changed their shopping habits due to the U.S. economy
Highlighting/bolding indicates significance difference between segment percentage vs. all shoppers
Source: TNS Retail Forward ShopperScape™
Back to School’s Bumpy Ride No Bounce for Retailers
Back-to-school shopping produced more bumps than bounces this year as plans to spend less this year continued through the season (Figure 5).
- The downshift in spending occurred from those who planned to spend about the same amount as the previous year (down from 44% to 40% YTY in August) to those who planned to spend less (up from 14% to 20% YTY in August).
Figure
5
Plans to Spend on Back to School Relative to Previous Years
| |
Third Week July 2007 |
Third Week July 2008 |
Third Week August 2007 |
Third Week August 2008 |
| Much more/somewhat more |
33% |
33% |
37% |
35% |
| About the same |
51% |
44% |
44% |
40% |
| Somewhat less/much less |
13% |
19% |
14% |
20% |
This is the first year I will be making
back-to-school purchases |
3% |
4% |
4% |
5% |
Highlighting/bolding indicates significant differences between July 2007 vs. July 2008 and August 2007 vs. August 2008
Source: TNS Retail Forward ShopperScape™
Shoppers’ estimates of their spending by the third week in August and plans to spend after that on back-to-school merchandise reflect the austere economic climate (Figure 6).
- Shoppers’ estimates of their spending to date declined from $433 in 2007 to $343 in 2008.
- Fewer back-to-school shoppers (62%) had joined the fray than last year (66%) by the third week in August. But spending plans for the remainder of the season also were less robust than last year: $302 in 2008 vs. $327 last year.
- In total, shoppers estimated they would spend only $465 this year on back-to-school shopping vs. last year’s estimate of $566.
Figure
6
Comparisons between Estimated Back to School Spending 2007 and 2008
| |
Third
Week
August
2007 |
Third
Week
August
2008 |
| Percentage of households spending on BTS |
36% |
34% |
| Average estimated BTS spending by BTS shoppers |
$433 |
$343 |
| Estimated percentage of spending to date |
66% |
62% |
| Percentage of households planning to spend during rest of BTS season |
24% |
24% |
| Average estimated spending during rest of BTS season by BTS shoppers |
$327 |
$302 |
| Average estimated total BTS spending by BTS shoppers |
$566 |
$465 |
Source: TNS Retail Forward ShopperScape™
Allocation of back-to-school dollars shifted slightly away from books and toward apparel (Figure 7).
- Other categories received about the same percentages of back-to-school spending as they did last year.
Figure
7
Estimated Spending by Back-to-School Category
| |
Percentage
of Total
Estimated
Spending
Third Week
August 2007 |
Percentage
of Total
Estimated Spending
Third Week
August 2008 |
Percentage Point Difference
2007 to 2008 |
| Clothing |
32% |
35% |
+3 |
| Books |
14% |
11% |
-3 |
| Computers |
15% |
15% |
0 |
| Shoes |
11% |
12% |
+1 |
| School supplies |
11% |
11% |
0 |
| Backpacks/school bags |
4% |
4% |
0 |
| Other electronics |
3% |
3% |
0 |
| Dormitory furnishings/bedding/bath |
4% |
3% |
-1 |
| Computer software |
2% |
2% |
0 |
| Other |
3% |
3% |
0 |
Source: TNS Retail Forward ShopperScape™
Industry Outlook: Targeting Teen Shoppers, August 2008
During the middle of the decade, specialty apparel retailers targeting teen shoppers were the highfliers of the softgoods retailing sector. Times have changed. Department stores and mass retailers increasingly are focusing on the same demographic even as a difficult economic environment and competition from non-softgoods categories (e.g., electronics) are taking a toll on teens’ softgoods spending. As a result, retailers across channels are unveiling a slew of initiatives—in many cases, timed to coincide with the back-to-school season—to increase store and Web traffic and to instill some excitement into the merchandise mix and the shopping experience.
Kelly Tackett
Senior Consultant, TNS Retail Forward
For more information on Targeting Teen Shoppers and the Retail Forward Intelligence System™ call Kathy Clarke at 614-355-4009 or email her at kclarke@retailforward.com.
SAVE THE DATES! TNS RETAIL FORWARD’S 2008 STRATEGIC OUTLOOK CONFERENCE DATE ANNOUNCEMENT—The 2008 Strategic Outlook Conference series moves to the fall this year. Dates and locations are as follows:
Oct. 14, 2008 Los Angeles at the Hyatt Regency Century Plaza
Oct. 21, 2008 Chicago at the Donald Stephens Convention Center (Rosemont)
Oct. 29, 2008 New York City at the Marriott Marquis
Conference details will be announced as they are available. Watch your Member Alert and Retail News Today™ for updates!
What's
TNS Retail Forward ShopperScape™?
TNS Retail Forward ShopperScape™ focuses on today’s consumers and their shopping behaviors. TNS Retail Forward ShopperScape™ has been fielded since November 2003 to a sample of 4,000 consumers each month. The survey gathers timely, up-to-date information about where consumers shop and what they buy. TNS Retail Forward ShopperScape™ is administered through TNS’s online household panel, weighted based to be representative of U.S. households. For more information, call Kathy Clarke at
614-355-4009 or visit http://www.retailforward.com/retailintel/ss_default.asp. |
| 