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Welcome to the ShopperScape™
Newsletter November 2007
- Expect shoppers to be nervous about spending on holiday this year especially in the wake of rising fuel costs. Coal in stockings—with a gift card for the gas station—may be more desirable than baubles or trinkets.
- Anticipate more shoppers buying gift cards this season, which may translate to more online shopping, less reason to go to stores and unfortunately fewer incremental purchases.
- Expect some of parents’ dollars to shift from toys to video games and sporting goods in reaction to recalls of Chinese-made toys.
- Plan for home décor and home furnishings categories to be less popular gifts this year as the weak housing market puts a damper on homegoods.
Caution About Holiday Spending Continues
Recent ShopperScape™ survey findings reveal that caution about holiday spending among consumers continues. Fewer shoppers are planning to spend about the same amount as they did last year and more are planning to spend less than they did last year vs. October 2006 (Figure 1).
- With more than one-third (37%) reporting intentions to spend less this year, Down Market shoppers are particularly cautious about holiday shopping.
- Even typically buoyant Up Market shoppers are showing restraint in holiday shopping plans.
Figure
1
Spending Intentions on Holiday Gifts This Year (Christmas, Chanukah/Hanukkah, or Kwanza) Compared with Last Year and by Income Market
|
October 2007 vs. October 2006 |
October 2007 by
Income Market |
|
Oct-07 |
Oct-06 |
Percentage Point Difference 2006 to
2007 |
Down Market (<$22,500) |
Middle Market ($22,500 - $84,999) |
Up Market ($85,000+) |
A lot more |
3% |
2% |
+1 |
4% |
2% |
3% |
Somewhat more |
10% |
10% |
0 |
8% |
11% |
11% |
About the same amount |
51% |
54% |
-3 |
43% |
51% |
59% |
Somewhat less |
20% |
19% |
+1 |
19% |
21% |
20% |
A lot less |
11% |
9% |
+2 |
18% |
11% |
4% |
I don’t buy holiday gifts |
5% |
6% |
-1 |
9% |
5% |
3% |
Source: TNS Retail Forward ShopperScape™, October 2006 and October 2007
Among shoppers who reported their intentions to spend, the average amount estimated ($636) is below last year’s average estimate ($668). Differences among income market segments are significant (Figure 2):
- The decline (-24%) is pronounced among Down Market shoppers—planning to spend only $296 on average this year.
- On average, Middle Market shoppers—the middle 50% of the income spectrum—plan to increase their holiday spending vs. October 2006 by 5% to $594.
- Up Market shoppers plan to decrease their holiday spending vs. October 2006 by 6% to $943 on average.
- A large percentage (41%) of shoppers doesn’t know what they plan to spend during the holidays yet. This percentage has remained stable vs. October 2006.
Figure
2
Average Amount Intending to Spend on Holiday Gifts This Year
Compared with 2006 by Income Market
|
Oct-07 |
Oct-06 |
Percentage Change |
Total (among shoppers planning to purchase) |
$636 |
$668 |
-5% |
Down Market (<$22,500) |
$296 |
$389 |
-24% |
Middle Market ($22,500 - $84,999) |
$594 |
$563 |
+5% |
Up Market ($85,000+) |
$943 |
$999 |
-6% |
Don't know yet |
41% |
41% |
|
Source: TNS Retail Forward ShopperScape™, October 2006 and October 2007
Although opportunity exists to convert “don’t knows” to higher-than-average spenders, Down Market shoppers—shoppers who are most vulnerable currently to rising costs of gasoline and heating fuel—are most likely to be undecided (Figure 3). Thus, the likelihood of planned average spending to rise is small.
Figure
3 Percentage of Shoppers Who Don't Know What They Plan to Spend on Holiday Gifts
This Year Compared with 2006 by Income Market
|
Oct-07 |
Oct-06 |
Down Market (<$22,500) |
49% |
49% |
Middle Market ($22,500 - $84,999) |
43% |
41% |
Up Market ($85,000+) |
30% |
33% |
Source: TNS Retail Forward ShopperScape™, October 2006 and October 2007
At the time of the survey (late October), only 38% of holiday shoppers had begun their annual quest to fulfill holiday wish lists (Figure 4).
- About one-third of shoppers don’t plan to begin holiday shopping until Black Friday weekend or later.
Figure
4 When Start Shopping for Holiday Gifts
|
Percentage of Primary
Shoppers |
Before September |
16% |
September |
6% |
October |
16% |
November before Thanksgiving Day weekend |
20% |
November during Thanksgiving Day weeked |
25% |
December before Christmas Eve |
17% |
Christmas Eve |
Less
than 1% |
Source:
TNS Retail Forward ShopperScape™, October 2007
Gift cards move to the top of the list as the most popular holiday items—ahead of apparel-related gifts (Figure 5). More than half of shoppers checked gift cards as a category they intend to buy.
- Some parents are likely substituting video game/gaming system purchases (up by 6 percentage points from last year) and/or sporting goods (up 2 percentage points) for toy purchases (down 2 percentage points) in reaction to recent toy recalls.
- Home décor or home-related furnishings have become less popular gift choices, no doubt in part dampened by the weak housing market.
Figure
5 Types of Gifts Primary Shoppers Are Planning to Buy Holiday 2007 vs. Holiday 2006
|
Oct-07 |
Oct-06 |
Percentage Point Difference 2006 to
2007 |
Gift cards / gift certificates |
54% |
51% |
+3 |
Clothing, clothing accessories or shoes |
50% |
52% |
-2 |
Toys/dolls/games (not video games) |
38% |
40% |
-2 |
Books |
33% |
36% |
-3 |
Pre-recorded music or video tapes, CDs or DVDs |
31% |
31% |
0 |
Personal care or beauty items |
26% |
23% |
+3 |
Video games, video gaming systems or related accessories |
26% |
20% |
+6 |
Consumer electronics or personal computer-related accessories |
18% |
17% |
+1 |
Food/food baskets |
16% |
NA |
NA |
Sporting goods or leisure items |
15% |
13% |
+2 |
Home décor or home-related furnishings |
12% |
17% |
-5 |
Tools |
11% |
NA |
NA |
Fine Jewelry |
11% |
10% |
+1 |
Plants/wreaths/flowers |
6% |
NA |
NA |
Money/checks/bonds |
2% |
NA |
NA |
Other (specify)* |
6% |
20% |
NA |
Don’t know |
18% |
16% |
+2 |
* YTY percentages are not comparable for "other" since additional categories were
added as potential responses in 2007.
Source:
TNS Retail Forward ShopperScape™, October 2006 and October 2007
Almost one out of five (19%) shoppers this year doesn’t know yet where they are going to shop for holiday gifts—opening opportunities for retailers that do the best job enticing shoppers into their stores (Figure 6).
- In general the percentages of shoppers planning to buy holiday gifts in specific channels are similar to where shoppers last year planned to buy holiday gifts. An exception is the decline in the percentage of shoppers planning to buy holiday gifts at discount stores/supercenters—a drop of 8 percentage points. Because this year’s survey gave shoppers opportunity to respond “don’t know”—vs. being forced to make at least one choice—one would expect the larger lines of trade to show the biggest declines in shoppers planning to buy gifts there. That being said, the discount store/supercenter 8 percentage point decline cannot be fully rationalized by the addition of the “don’t know” response choice to the question.
Figure
6 Where Primary Shoppers Are Planning to Buy Holiday 2007 vs. Holiday 2006
|
Oct-07 |
Oct-06 |
Percentage Point Difference 2006 to
2007 |
Discount stores/Supercenters |
49% |
57% |
-8 |
Traditional department stores (such as Belk, Dillards, Macy’s, etc.) |
25% |
27% |
-2 |
Value department stores (such as JCPenney, Kohl’s, Sears, etc.) |
36% |
37% |
-1 |
Upscale department stores (such as Bloomingdale’s, Nordstrom, Saks 5th Avenue, etc.) |
6% |
7% |
-1 |
Specialty apparel storess (such as Ann Taylor, Chico's, Gap, etc.) |
12% |
13% |
-1 |
Shoe stores |
6% |
6% |
0 |
Sporting good stores |
12% |
11% |
+1 |
Gadget/gift/theme stores |
12% |
12% |
0 |
Home furnishings/domestics stores |
6% |
8% |
-2 |
Book and media stores |
27% |
29% |
-2 |
Consumer electronics/appliance/ computer stores |
13% |
12% |
+1 |
Home improvement/hardware stores |
7% |
7% |
0 |
Jewelry stores |
6% |
5% |
+1 |
Office supply stores |
3% |
3% |
0 |
Crafts or fabrics store |
10% |
10% |
0 |
Drug stores |
7% |
6% |
+1 |
Grocery stores/supermarkets |
8% |
6% |
+2 |
Warehouse clubs |
15% |
17% |
-2 |
Small-format value stores (such as dollar stores) |
7% |
7% |
0 |
Factory outlet stores |
11% |
12% |
-1 |
Online |
39% |
41% |
-2 |
Catalogs |
17% |
17% |
0 |
Other |
7% |
7% |
0 |
I don’t know |
19% |
NA |
NA |
Source: TNS Retail Forward ShopperScape™, October 2006 and October 2007
Gift Cards Hotter than Ever
The hot holiday item this year will be the gift card. When shoppers were asked directly about buying gifts cards, two-thirds (65%) responded they plan to purchase at least one of them for holiday (Figure 7).
- Another 24% of shoppers don’t know yet whether they will purchase gift cards. So the percentage of gift card purchasers could rise even further.
Figure
7
Percentage Purchasing Gift Cards for Holiday
|
Total Holiday Primary Shoppers |
Down
Market (<$22,500) |
Middle
Market ($22,500 - $84,999) |
Up
Market ($85,000+) |
Yes |
65% |
53% |
66% |
73% |
No |
11% |
14% |
12% |
8% |
Don't know |
24% |
33% |
22% |
19% |
Source:
TNS ShopperScape™, October 2007
Shoppers who plan to purchase gifts cards and were willing to estimate how many they plan to purchase expect to buy 5.4 gift cards and spend $145 on average (Figures 8 and 9).
- Up Market shoppers plan to spend most generously on gift cards—averaging $203 for 5.7 gifts cards.
Figure 8
Average Number of Gift Cards Planning to Purchase*
|
Total Holiday Primary Shoppers |
Down
Market (<$22,500) |
Middle
Market ($22,500 - $84,999) |
Up
Market ($85,000+) |
Average number |
5.4 |
4.7 |
5.4 |
5.7 |
Don't know yet |
38% |
41% |
38% |
35% |
*Base equals primary shoppers estimating the number of gift cards they plan to buy.
Source:
TNS ShopperScape™, October 2007
Figure 9
Average Amount Planning to Spend on Gift Cards*
|
Total
Holiday Primary Shoppers |
Down
Market (<$22,500) |
Middle Market ($22,500 - $84,999) |
Up
Market
($85,000+) |
Average amount |
$145 |
$79 |
$135 |
$203 |
Don't know yet |
36% |
37% |
38% |
32% |
* Base equals primary shoppers estimating the amounts on gift cards they plan to spend.
Source:
TNS ShopperScape™, October 2007
 Year of the Pig
In terms of Chinese zodiac symbols, 2007 is the Year of the Pig. Last year was the Year of the Dog—but an unfortunate one for some dogs—and cats—that played out in pet food recalls, beginning in January 2007, followed by numerous high-profile recalls ranging from toothpaste to toys.
Last month’s newsletter described findings from some questions ShopperScape™ asked about the recent recalls of various products made in China. Eighty-four percent of shoppers were aware of at least one type of recall. But most shoppers are only selectively boycotting products made in China—if boycotting them at all. Further analysis not surprisingly shows that shoppers personally affected by the recalls are most likely to be changing their attitudes about buying Chinese-made products. What is a bit surprising are the differences in how affected parents of young children and “parents” of dogs/cats are reacting (Figure 10).
- Parents of young children affected by recalls of baby supplies and furniture and/or toys are more likely than the general population of primary shoppers to be selectively not buying certain products from China for now. Their selective boycotting is likely limited to toys, especially painted ones and ones that children tend to put in their mouths.
- But “parents” of dogs/cats affected by recalls of pet food are more active boycotters of Chinese-made products. They are more likely to have changed their shopping behavior compared with parents of young children affected by child-oriented recalls. They are just as likely as the parents of young children to selectively not buy certain Chinese-made products for now—likely pet food from companies that buy ingredients from China. But they are more likely to avoid buying any products from China when they can or to be boycotting Chinese-made products permanently or until they know they are safe.
Figure 10
Statement Best Describing Current Shopping Behavior Regarding Products Made in China
|
All Primary Shoppers
(n = 4006) |
Primary Shoppers with Children Under 6 and Affected by Baby Supplies and Furniture or Toy Recalls
(n = 184) |
Primary Shoppers with Dogs/Cats and Affected by Pet Food Recalls
(n = 443) |
Many of the products I buy are made in China so I haven't changed my shopping behavior. |
15% |
15% |
9% |
I avoid buying products from China when I can. |
29% |
29% |
39% |
I'm selectively not buying certain products from China for now. |
16% |
28% |
24% |
I'm actively boycotting buying products from China until I know they are safe. |
5% |
8% |
8% |
I won.t buy products from China again. |
6% |
5% |
11% |
None of the above |
30% |
15% |
10% |
Highlighting represents significant differences between column percents.
Source:
TNS Retail Forward ShopperScape™, September 2007
Men Still in Charge of Most Tool Time
Programs to engage women in DIY activities such as The Home Depot’s Do-It-Herself WorkshopsSM have greater chances of drawing a large crowd when focused on interior painting/wallpapering, landscaping and storage organization—projects with large percentages of women participating. Kitchen and bathroom remodels are just as likely to include female participation as male participation. However, when the DIY project involves plumbing, electricity or carpentry, men are much more likely to personally participate. Relatively low participation rates among women in these common household projects suggest both lack of knowledge and desire to participate. But it would be an interesting test of lack of knowledge vs. desire to see if women would show up at a carpentry workshop (Figure 11).
Figure 11
Types of Do-It-Yourself Projects Personally Participated in Past Year
|
Male Primary Shoppers |
Female Primary Shoppers |
Landscaping |
29% |
23% |
Interior painting/wallpapering |
25% |
25% |
Plumbing |
22% |
7% |
Electrical wiring/ fixtures |
21% |
5% |
Shelving/storage organization |
19% |
17% |
Carpentry |
18% |
5% |
Exterior painting |
13% |
7% |
Flooring |
11% |
8% |
Windows or doors |
10% |
6% |
Bathroom remodel |
10% |
9% |
Fencing installation/repair |
9% |
4% |
Kitchen remodel |
7% |
5% |
Decks |
6% |
3% |
Roofing |
6% |
2% |
Finish a basement |
3% |
2% |
None of the above |
41% |
51% |
Highlighting represents significant differences between column percents.
Source:
TNS Retail Forward ShopperScape™, October 2007
The Home Depot 2011 Compared with the performance during the past quarter century, the outlook for The Home Depot is downright grim. The housing slump, stiff competition and its own strategic missteps in recent years will combine to drag growth sharply lower in the next five years. Getting foot traffic up and the cash register to ring will require new management to stay focused on the goal of reinvigorating the retail operations. Competitors should exploit the chinks in The Home Depot’s armor, particularly by emphasizing service and small projects. Suppliers will be challenged to adapt to the retailer’s upgraded supply chain while cutting costs and keeping fresh and unique merchandise in the pipeline.
Stephen Spiwak, Senior Consultant and Manager of The Home Depot program, TNS Retail Forward
For more information on “The Home Depot 2011” and the Retail Forward Intelligence System™ contact Kathy Clarke at 614-355-4009 or or kclarke@retailforward.com.
| 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/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/retailintel/ss_default.asp.
|
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