If you cannot read this ShopperScape(tm) Newsletter for September 2004, go to http://www.retailforward.com/shopperscape/shopperscape1004.htm
Welcome to the ShopperScape™ Newsletter October 2004
| PREDICTIONS |
- Look forward
to more of a shopper second wind than a perfect storm.
- Expect
the holidays to split between the "happy holiday haves" and
the "have not humbugs."
- Prepare
for slightly looser purse strings if you cater to haves.
- Plan on
promotions to wake up Scrooges that still dream about ghosts of Christmas
past.
- Don't
hold your breath for employed Americans to suit up for work any time
in the near future.
- Shoppers
plan to spend more to accessorize the house, and themselves.
| HOT OFF THE PRESS |
Suiting up: a Madison Avenue Myth
The
consumer movement back to formal business attire is more wishful thinking
than reality. Employed respondents in our latest survey are seven times
more likely to disagree than agree that their workday dress is shifting
toward more formal business attire. And, this holds true across the Down,
Middle and Up Market.
No matter how much retailers would like to think that shoppers are dropping more dollars on tailored and higher-end business clothes, it simply is not so. In fact, among shoppers that purchased suits last fall, the average number they plan to purchase this fall is not much different from the average number that they bought last year.
Among respondents employed outside the home
| All Shoppers | Down Market | Middle Market | Up Market | |||
| Ave # Suits Bought Last Fall | 2.62 | 2.03 | 2.55 | 2.87 | ||
| Ave # Suits Plan to Buy This Fall* | 2.23 | 1.60 | 2.18 | 2.43 | ||
| Difference | -0.39 | -0.43 | -0.37 | -0.44 | ||
| "My workplace is shifting to more formal business attire" | ||||||
| Strongly Agree/Agree | 9% | 8% | 9% | 11% | ||
| Disagree/Strongly Disagree | 71% | 70% | 71% | 70% | ||
| * Among respondents who purchased a suit last year. | ||||||
| Source: Retail Forward ShopperScape™ | ||||||
Happy Holidays for the Haves and Humbug for the Have Nots
If
present sentiment prevails, holiday spending will be split along income
lines with Up Market households opening their purse strings and Down Market
households shopping like Scrooge.
- Up Market households plan to spend about $1,162 on gifts this year on average. Twenty-three percent plan to spend more than last year compared with 21% who plan to curb their spending.
- More than three-quarters of Up Market households said they will spend about the same amount at upscale retailers as they did last year, while 6% intend to spend more.
- In contrast, Down Market households plan to spend $345 on gifts this year on average. Nearly twice as many Down Market households indicated they will spend less (32%) than will spend more (17%) during the holidays.
- Sixteen percent of Down Market households said they will spend more of their holiday budgets at Wal-Mart this year, compared with 19% who plan to spend less.
- Middle Market households plan to spend $625 on gifts this year on average. Even the Middle Market shows a few Scrooge-like signs with 27% of them planning to spend less this year, compared with 20% who plan to spend more.
- The Internet
should boost its share of holiday sales this year. Sixteen percent of
all shoppers plan to spend more online, greater than the 14% who plan
to spend less. Up Market households, which make up a large portion of
overall sales, are much more likely than Middle and Down Market households
to have plans to increase their Internet spending.
| All Shoppers | Down Market | Middle Market | Up Market | ||||||
| Which describes how much you think you will spend on holiday gifts this year compared to last year? | |||||||||
| A lot more/Somewhat more | 19% | 17% | 20% | 23% | |||||
| A lot less/Somewhat less | 26% | 32% | 27% | 21% | |||||
| Amount planned to spend on holiday gifts | $ 800 | $ 345 | $ 625 | $ 1,162 | |||||
| Which describes how much of your holiday gift budget will be spent online this year compared to last year? | |||||||||
| A lot more/Somewhat more | 16% | 11% | 15% | 23% | |||||
| A lot less/Somewhat less | 14% | 19% | 14% | 9% | |||||
| Which describes how much of your holiday gift budget will be spent at Wal-Mart or Wal-Mart Supercenter this year compared to last year? | |||||||||
| A lot more/Somewhat more | 12% | 16% | 13% | 10% | |||||
| A lot less/Somewhat less | 13% | 19% | 12% | 9% | |||||
| Which describes how much of your holiday gift budget will be spent at upscale stores like Nordstrom and Saks 5th Avenue this year compared to last year? | |||||||||
| A lot more/Somewhat more | 3% | 2% | 3% | 6% | |||||
| A lot less/Somewhat less | 18% | 17% | 18% | 18% | |||||
| Source: Retail Forward ShopperScape™ | |||||||||
| CONSUMER SPENDING OUTLOOK |
Summer Soft Patch to Persist.
The
Retail Forward Index of Future Spending™ slipped this month to 100.7
from 102.7 last month. Although the Up Market strengthened its spending
plans, that gain was offset by a drop among Middle and Down Market households.
The Middle Market, in particular, softened spending plans, which reflected
downgrades in evaluations of strength of incomes and the job market. Many
Down Market households are similarly unconvinced that the job market is
improving, which resulted in a more pessimistic outlook for this segment
as well.
- In October, the index for Up Market households (incomes greater than $75,000) improved to 101.2 from a reading of 99.3 the month before as assessments of job security rebounded to the highest levels of the year. Home buying and refinancing activity are also bolstering the outlook in this segment, offsetting a moderation in views about investments amid a stagnant stock market.
- The index for Middle Market households (incomes between $22,500 and $75,000) moderated to 98.3 in October from 103.8 last month, suggesting the pace of spending in this cohort should weaken this month. More subdued assessments of jobs and incomes offset an improvement in refinancing activity to produce the softer outlook.
- The index
for Down Market households (incomes less than $22,500) downshifted
in October for the second straight month. The Index came in at 106.3,
down from an upwardly revised 108.5 in September, as job concerns and
a slowdown in home buying offset the impact of a more favorable view
of debt burdens.
The Retail Forward Index of Future Spending combines households' current assessments of key drivers of spending across income segments, including the job situation, incomes, investments, debt levels, home buying, and seasonal factors to produce a forward-looking indicator of spending for the coming month.
| SHOPPER INSIGHTS |
Wal-Mart.com
half as popular as the stores
ShopperScape™ results show that around 47% of all primary household shoppers go to Wal-Mart or Wal-Mart Supercenter monthly. About half as many (23%) visit Wal-Mart's online site at least once a month.
Fifteen percent of all shoppers have purchased from Wal-Mart.com. Up Market households are more likely than Down Market household to have bought from the Web site.
Despite the high penetration of Wal-Mart.com overall, only 2% of primary household shoppers have bought clothing there. However, Wal-Mart has only recently relaunched apparel buying on the site, and that proportion may increase.
Wal-Mart.com apparel offer popular with Down Market online purchasers
The overall web offering is attracting a consistent proportion of shoppers across Markets. However, among shoppers who have made a purchase at Wal-Mart.com, Down Market shoppers are almost 10 percentage points more likely to have purchased clothing at the site than shoppers in other Markets. One out of every five Down Market purchasers has bought clothing at Wal-mart.com.
| Percentage of shoppers who… | All Shoppers | Down Market | Middle Market | Up Market | ||
| Visit www.wal-mart.com at least once a month | 23% | 31% | 24% | 18% | ||
| Purchased anything from www.wal-mart.com | 15% | 12% | 15% | 18% | ||
| Purchased clothing from www.wal-mart.com | 2% | 2% | 2% | 2% | ||
| Percentage of www.wal-mart.com purchasers who purchased clothing at www.wal-mart.com | 13% | 21% | 12% | 12% | ||
| Source: Retail Forward ShopperScape™ | ||||||
| PURCHASING PLANS |
Accessories for the house-and Mom-and some new casual duds for Dad.
The
end of back to school shopping equals more shoppers planning to spend
on the house, Mom, and Dad. Bedroom textiles, home accent pieces, rugs,
and window coverings are all in more shoppers' spending plans, as are
women's accessories, costume jewelry, and dress shoes. Maybe now Mom has
time and money to spend on herself? Dad is not left out though-he's scoring
some new jeans and casual tops. And we bet he's the one planning on spending
more on CDs and videos/DVDs, too.
Back-to-school looks to be over.
Continuing
the decreases seen in September, parents' plans for buying children's
school supplies, home office supplies and kids' shoes will drop even further
in October. Dollars earmarked for appliances and consumer electronics
look to have been spent already, as planned spending drops for October.
Going
Up
|
Plan
to
Purchase in Next 4 Weeks August 2004 |
Plan
to
Purchase in Next 4 Weeks September 2004 |
Percentage
Difference in Plans to Purchase Sept-Aug 2004 |
|
| Bedroom textiles |
13.9%
|
17.6%
|
3.7
|
| Music tapes/CDs |
18.2%
|
21.1%
|
2.9
|
| Women's accessories |
13.5%
|
16.2%
|
2.7
|
| Toys/Dolls/Games |
13.8%
|
16.4%
|
2.6
|
| Rugs |
13.1%
|
15.4%
|
2.3
|
| Women's jeans |
19.6%
|
21.9%
|
2.3
|
| Home accent pieces |
15.5%
|
17.7%
|
2.2
|
| Craft/Hobby supplies |
18.5%
|
20.6%
|
2.1
|
| Men's casual tops |
11.7%
|
13.6%
|
1.9
|
| Women's dress shoes |
12.9%
|
14.8%
|
1.9
|
| Costume jewelry |
7.1%
|
8.9%
|
1.8
|
| Pre-recorded video taps or DVDs |
19.3%
|
21.1%
|
1.8
|
| Men's jeans |
11.9%
|
13.6%
|
1.7
|
| Window coverings |
15.5%
|
17.2%
|
1.7
|
| Source: Retail Forward ShopperScape™, September 2004. |
Going
Down
|
Plan
to
Purchase in Next 4 Weeks August 2004 |
Plan
to
Purchase in Next 4 Weeks September 2004 |
Percentage
Difference in Plans to Purchase Sept-Aug 2004 |
|
| Standard television |
4.8%
|
4.7%
|
-0.1
|
| Washers or dryers |
5.4%
|
5.3%
|
-0.1
|
| Dishwashers |
4.9%
|
4.5%
|
-0.4
|
| Teen boy's clothing |
7.6%
|
7.1%
|
-0.5
|
| Women's athletic shoes |
14.3%
|
13.8%
|
-0.5
|
| Home office supplies |
22.8%
|
22.0%
|
-0.8
|
| Sporting goods |
9.3%
|
8.4%
|
-0.9
|
| Children's shoes |
13.0%
|
12.0%
|
-1.0
|
| Children's school supplies |
14.7%
|
9.2%
|
-5.5
|
| Source: Retail Forward ShopperScape™, September 2004. |
| POINT OF VIEW |
The U.K. Market Ripe for Skilled Marketers
"The
U.K. retail market is extraordinary in many ways. Strong growth and low
risk compared with other countries make it one of the best in the world
for retailers and suppliers. At the same time, the opportunity is only
for the most skilled of the world's retailers. The presence of two of
the world's premier global retailers, Tesco and Wal-Mart's Asda, demand
that retailers and suppliers across retail sectors refine their capabilities
and organizations to unrivaled levels. In that environment, many domestic
retailers can survive only by advancing in areas such as private label
and global sourcing faster than counterparts elsewhere in the world. And
suppliers must grapple more pointedly with the challenge of keeping their
name brand products from being squeezed off retailers' shelves."
Frank
Badillo, Vice President, Manager Global Program of the
Retail Forward Intelligence System™
For more
information on Strategic Focus: Retailing in the United Kingdom
or the Retail Forward Intelligence System™ call Kathy Clarke at 614-355-4009
or email her at kclarke@retailfoward.com.
|
What's Retail Forward ShopperScape™? Retail Forward ShopperScape™ focuses on today's consumers and their shopping behaviors. 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. Retail Forward ShopperScape™ is administered through TNS/NFO'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 and select ShopperScape™ under Product & Services in the navigation bar located at the top of the home page to view sample reports and learn more about how to access ShopperScape™ information. |
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