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Welcome to the ShopperScape™
Newsletter November 2008
- Expect the cutting-back and trading-down themes to ring through the 2008 holiday season.
- Expect parents to be more mindful of their family budgets and less prone to making impulse purchases.
- Look forward to a bright spot in the video gaming category.
- Watch for shoppers to narrow their store choice sets to mostly places where bargains can be obtained.
- Plan for more indecisive shoppers who will take more time making up their minds about how to spend leaner holiday budgets.
- Move the gift cards front and center.
- Understand that Up Market shoppers are feeling lousy about their investments and shrinking net worth; Down Market shoppers are feeling insecure about their jobs and ability to pay their bills; and Middle Market shoppers are feeling both a little lousy and insecure.
Holiday Spending Plans Plummet
ShopperScape™ findings from the latest survey fielded—post the big bailout—reveal that shoppers are planning significant cutbacks in holiday spending (Figure 1).
- In 2008, half of shoppers indicate plans to spend less this year than last year on the holidays vs. 31% in 2007.
- The pullback on holiday spending plans is just as evident among parents with children less than 19 years old still residing at home as among the total primary shopper population. Almost half (48%) of parents plan to cut back on spending.
Figure
1
How Much Shoppers Plan to Spend on Holidays Compared with Previous Year:
Primary Shoppers and Parents
| |
Total Primary Shoppers 2007 |
Total
Primary Shoppers 2008 |
|
Parents (children
<19 at home) 2007 |
Parents
(children
<19 at home) 2008 |
| Sample Size |
4023 |
4042 |
|
1133 |
1144 |
| |
|
|
|
|
|
| A lot more |
3% |
2% |
|
5% |
4% |
| Somewhat more |
10% |
5% |
|
14% |
7% |
| About the same amount |
51% |
37% |
|
49% |
38% |
| Somewhat less |
20% |
28% |
|
22% |
28% |
| A lot less |
11% |
22% |
|
9% |
20% |
| I don’t buy holiday gifts |
5% |
5% |
|
2% |
3% |
Highlighting/bolding indicates significant differences between percentages of total primary shoppers
in 2008 vs. 2007 and parents in 2008 vs. 2007
Source: TNS Retail Forward ShopperScape™, October 2007 and October 2008
Shoppers are estimating a sizable drop in the amount they plan to spend on gifts for the holidays vs. what they planned to spend at this time last year: from $636 on average last year by all primary shoppers in households to $558 this year (Figure 2).
- Parents are planning to spend more—$657, on average—but their estimated decline vs. 2007 is just as large as the decline for all primary shoppers buying holiday gifts: about 12%.
- More shoppers than last year intend to keep their holiday gift spending less than $200, and fewer shoppers plan to spend more than $600.
- More parents this year—two-thirds of them—have a holiday shopping budget in mind. More planning for holiday gift shopping could portend fewer parents making impulse purchases.
Figure
2
Amount Shoppers Plan to Spend on Holiday Gifts: Primary Shoppers and Parents
| |
Total
Primary Shoppers
Buying
Gifts 2007 |
Total Primary Shoppers Buying
Gifts 2008 |
|
Parents (children <19 at home) Buying
Gifts 2007 |
Parents
(children <19
at home)
Buying
Gifts 2008 |
| Sample Size |
3812 |
3839 |
|
1108 |
1115 |
| |
|
|
|
|
|
| $1-$99.99 |
2% |
3% |
|
1% |
2% |
| $100-$199.99 |
5% |
8% |
|
2% |
4% |
| $200-$299.99 |
9% |
9% |
|
7% |
8% |
| $300-$399.99 |
7% |
8% |
|
8% |
8% |
| $400-$499.99 |
4% |
4% |
|
5% |
5% |
| $500-$599.99 |
11% |
11% |
|
12% |
15% |
| $600-$699.99 |
3% |
2% |
|
2% |
3% |
| $700-$799.99 |
2% |
2% |
|
3% |
2% |
| $800-$899.99 |
2% |
2% |
|
3% |
2% |
| $900-$999.99 |
1% |
0% |
|
0% |
0% |
| $1000-$1499.99 |
9% |
7% |
|
12% |
11% |
| $1500-$1999.99 |
2% |
2% |
|
4% |
2% |
| $2000-$2499.99 |
2% |
2% |
|
3% |
2% |
| $2500-$2999.99 |
1% |
0% |
|
1% |
1% |
| $3000-$3999.99 |
1% |
1% |
|
1% |
1% |
| I don't know yet |
41% |
39% |
|
37% |
33% |
| |
|
|
|
|
|
| Average |
$636 |
$558 |
|
$749 |
$657 |
Highlighting/bolding indicates significant differences between percentages of total primary shoppers in 2008 vs. 2007 and
parents in 2008 vs. 2007
Source: TNS Retail Forward ShopperScape™, October 2007 and October 2008
At the time of the survey (late October) only 30% of holiday shoppers had begun their holiday shopping (Figure 3).
- Parents are more likely to estimate when they will begin their holiday shopping—generally before Black Friday—than the general holiday shopper population. Deals on toys undoubtedly are giving parents an incentive to shop earlier this year.
Figure
3
When Will Shoppers Begin Shopping for Holiday Gifts: Primary Shoppers vs. Parents
|
Total Primary Shoppers Buying
Gifts 2008 |
Parents (children
<19 at home) Buying
Gifts 2008 |
Sample Size |
3839 |
1115 |
| |
|
|
Have already started |
30% |
32% |
Soon, in October |
9% |
11% |
November before Thanksgiving Day weekend |
16% |
20% |
November during or after Thanksgiving Day weekend |
18% |
18% |
December before Christmas Eve |
11% |
3% |
Christmas Eve |
0% |
0% |
Don't know when I will start |
15% |
11% |
Highlighting/bolding indicates significant differences between percentages of total primary shoppers vs. parents.
Source: TNS Retail Forward ShopperScape™, October 2008
Both holiday shoppers overall and parents as a sub-segment estimate they already have spent an average of 11% of their holiday shopping budget at the time of the survey (Figure 4).
- Although the averages are the same, parents are more likely to have completed up to one-quarter of their shopping so far.
- Almost half of each group has yet to spend anything so far on holiday gifts, so plenty of shopping is yet to be accomplished.
Figure
4
What Percentage of Planned Holiday Gift Spending Have Shoppers Spent so Far:
Primary Shoppers vs. Parents
|
Total Primary Shoppers Buying Gifts 2008 |
Parents
(children <19
at home) Buying Gifts 2008 |
Sample Size |
3839 |
1115 |
| |
|
|
None |
49% |
46% |
1% to 24% |
20% |
24% |
25% to 49% |
6% |
3% |
50% to 74% |
5% |
4% |
75% to 100% |
3% |
3% |
I don't know |
18% |
16% |
| |
|
|
Average (including zeros) |
11% |
11% |
Highlighting/bolding indicates significant differences between percentages of total primary shoppers vs. parents.
Source: TNS Retail Forward ShopperScape™, October 2008
More shoppers—20% of total primary shoppers and 15% of parents—are undecided this year about the types of holiday gifts they plan to buy. Among product categories, the video game category is the most notable exception to cutbacks planned by shoppers (Figure 5).
- In almost all categories, lower percentages of total primary shoppers this year indicated intentions to purchase. Exceptions: the popular category of video games/video gaming systems/related accessories and the less-popular categories of home décor or home-related furnishings and plants/wreaths/flowers.
- Among parents, far fewer categories have lost their shine vs. last year. But the top three categories of holiday gifts—gift cards/gift certificates, clothing/accessories/shoes and toys/dolls/games (not video games)—all face declining popularity.
Figure 5
Types of Gifts Shoppers are Buying This Holiday Season: Primary Shoppers and Parents
|
Total
Primary Shoppers Buying
Gifts 2007 |
Total
Primary Shoppers Buying
Gifts 2008 |
|
Parents (children <19 at home) Buying
Gifts 2007 |
Parents (children <19
at home)
Buying
Gifts 2008 |
Sample size |
3812 |
3839 |
|
1108 |
1115 |
| |
|
|
|
|
|
Gift cards/gift certificates |
54% |
51% |
|
59% |
50% |
Clothing, clothing accessories or shoes |
50% |
45% |
|
65% |
58% |
Toys/dolls/games (not video games) |
38% |
33% |
|
56% |
50% |
Books |
33% |
30% |
|
39% |
37% |
Video games, video gaming systems or related accessories |
26% |
25% |
|
46% |
46% |
Pre-recorded music or video tapes, CDs or DVDs |
31% |
24% |
|
43% |
31% |
Personal care or beauty items |
26% |
23% |
|
33% |
30% |
Consumer electronics or personal computers and related accessories |
18% |
15% |
|
26% |
24% |
Food/food baskets |
16% |
14% |
|
18% |
15% |
Sporting goods or leisure items |
15% |
13% |
|
23% |
21% |
Home décor or home-related furnishings |
12% |
11% |
|
13% |
13% |
Tools |
11% |
9% |
|
15% |
12% |
Fine jewelry |
11% |
7% |
|
13% |
9% |
Plants/wreaths/flowers |
6% |
5% |
|
6% |
6% |
Other |
6% |
7% |
|
3% |
4% |
Don't know |
18% |
20% |
|
11% |
15% |
Highlighting/bolding indicates significant differences between percentages of total primary shoppers in 2008 vs. 2007 and
parents in 2008 vs. 2007
Source: TNS Retail Forward ShopperScape™, October 2007 and October 2008
In general, shoppers are trading down in their channel choices for holiday shopping and narrowing the number of different channels where they plan to shop for the gifts on their shrinking lists (Figure 6).
- Discount stores/supercenters not only remain in the top spot but also are among the few channels not being cut from the list of planned stops for gift buying. Other lines of trade offering savings—warehouse clubs, factory outlet stores and small-format value stores—also are retaining their popularity with shoppers.
- Fewer shoppers are planning to buy via non-store channels although free shipping deals could be enough incentive to shift shoppers’ plans.
- Department stores and other apparel-related channels will be challenged as significantly fewer shoppers plan to visit these channels.
- Even channels focusing on leisure products, such as consumer electronics stores, sporting goods stores and gadget/gift stores, face declining prospects.
- More shoppers (22%) are undecided about where they are going to shop for holiday gifts this year vs. last year.
Figure
6
Where Shoppers are Buying This Holiday Season: Primary Shoppers and Parents
|
Total Primary Shoppers Buying
Gifts 2007 |
Total Primary Shoppers Buying
Gifts 2008 |
|
Parents (children <19
at home) Buying
Gifts 2007 |
Parents (children <19
at home)
Buying
Gifts 2008 |
Sample size |
3812 |
3839 |
|
1108 |
1115 |
| |
|
|
|
|
|
Discount stores/ supercenters |
49% |
50% |
|
59% |
60% |
Online |
39% |
35% |
|
43% |
40% |
Value department stores (such as Sears, JCPenney, Kohl's, etc.) |
36% |
32% |
|
44% |
39% |
Book and media stores |
27% |
23% |
|
30% |
25% |
Traditional department stores (such as Dillards, Macy's, Belk, etc.) |
25% |
20% |
|
27% |
22% |
Warehouse clubs |
15% |
15% |
|
20% |
19% |
Catalogs |
17% |
13% |
|
16% |
12% |
Factory outlet stores |
11% |
11% |
|
14% |
13% |
Consumer electronics/ appliance/ computer stores |
13% |
11% |
|
17% |
15% |
Sporting good stores |
12% |
10% |
|
19% |
14% |
Specialty apparel stores (such as Gap, Chico's, Ann Taylor, etc.) |
12% |
9% |
|
17% |
13% |
Crafts or fabrics store |
10% |
9% |
|
13% |
10% |
Small-format value stores (such as dollar stores) |
7% |
8% |
|
8% |
8% |
Gadget/gift/ theme stores |
12% |
8% |
|
14% |
9% |
Grocery stores/ supermarkets |
8% |
8% |
|
8% |
8% |
Drug stores |
7% |
7% |
|
7% |
5% |
Home furnishings/ domestics stores |
6% |
6% |
|
7% |
6% |
Home improvement/ hardware stores |
7% |
6% |
|
9% |
6% |
Shoe stores |
6% |
5% |
|
11% |
8% |
Upscale department stores (such as Nordstrom, Bloomingdale's, Saks 5th Avenue, etc.) |
6% |
4% |
|
6% |
4% |
Jewelry stores |
6% |
4% |
|
8% |
5% |
Office supply stores |
3% |
3% |
|
4% |
3% |
Other |
7% |
7% |
|
5% |
5% |
I don't know |
19% |
22% |
|
14% |
17% |
Highlighting/bolding indicates significant differences between percentages of total primary shoppers in 2008 vs. 2007 and
parents in 2008 vs. 2007
Source: TNS Retail Forward ShopperScape™, October 2007 and October 2008
Gift Cards Retain their Popularity
When shoppers were asked directly about buying gifts cards, almost two-thirds (63%) of primary shoppers buying holiday gifts and a little more than two-thirds (67%) of parents responded that they plan to purchase at least one gift card for the holiday (Figure 7).
- There are no statistical differences in the percentages of shoppers planning to buy gift cards this year vs. last year.
Figure
7
Will Shoppers Purchase a Gift Card this Holiday Season: Primary Shoppers and Parents
|
Total Primary Shoppers
Buying
Gifts 2007 |
Total Primary Shoppers
Buying
Gifts 2008 |
|
Parents (children <19 at home) Buying
Gifts 2007 |
Parents (children <19 at home) Buying
Gifts 2008 |
Sample Size |
3812 |
3839 |
|
1108 |
1115 |
| |
|
|
|
|
|
Yes |
65% |
63% |
|
70% |
67% |
No |
11% |
12% |
|
8% |
9% |
I don't know |
24% |
24% |
|
22% |
24% |
Source: TNS Retail Forward ShopperScape™, October 2007 and October 2008
Shoppers who plan to purchase gifts cards and were able to estimate how many they plan to purchase expect to buy five gift cards and spend $153 on average (Figures 8 and 9).
- No significant differences between shoppers’ intentions this year vs. last are noted.
- Parents are planning to buy about as many gifts cards as the total primary shopper population.
Figure
8
Amount Shoppers Plan to Spend on Holiday Gift Cards: Primary Shoppers and Parents
|
Total Primary Shoppers Buying
Gifts 2007 |
Total Primary Shoppers Buying
Gifts 2008 |
|
Parents (children
<19 at home) Buying
Gifts 2007 |
Parents (children
<19 at home) Buying
Gifts 2008 |
Sample Size |
2479 |
2432 |
|
776 |
747 |
| |
|
|
|
|
|
Average Amount |
$145 |
$153 |
|
$151 |
$138 |
Average Number |
5.4 |
5.0 |
|
5.7 |
5.0 |
Source: TNS Retail Forward ShopperScape™, October 2007 and October 2008
Near-term Spending Plans Slip Significantly
After the big bailout, shoppers reined in their spending plans for the next month by the same amount as they indicated in August (Figure 9).
- This latest shift is especially concerning considering differences in the two time periods: August percentages reflecting the winding down of back-to-school spending partly financed by tax rebates vs. October percentages reflecting the beginning of holiday shopping.
- Not surprisingly, more Down Market shoppers are planning cutbacks in near-term spending.
Figure
9
Compared to This Time Last Year, in the Next Month Do You Plan to Spend More, the Same, or Less at Retail Stores?
| |
All Shoppers |
|
|
|
Down
Market
(Under
$22,500) |
Middle
Market
($22,500– $84,999) |
Up
Market ($85,000+) |
| |
Feb
08 |
Mar
08 |
Apr
08 |
May
08 |
Jun
08 |
Jul
08 |
Aug
08 |
Sep
08 |
Oct
08 |
|
Oct
08 |
Oct
08 |
Oct
08 |
| Spend Much/Somewhat More |
14% |
12% |
12% |
12% |
10% |
14% |
9% |
17% |
8% |
|
8% |
7% |
9% |
| Spend About the Same |
59% |
48% |
44% |
39% |
39% |
41% |
38% |
42% |
39% |
|
32% |
40% |
44% |
| Spend Much/Somewhat Less |
28% |
40% |
44% |
49% |
52% |
45% |
53% |
41% |
53% |
|
60% |
53% |
47% |
Highlighting/bolding indicates significant differences between down-, middle-, or up-market shoppers vs. all shoppers in October.
Source: TNS Retail Forward ShopperScape™
Feeling Worse about Household Finances
Comparisons between March and October show significant declines in measures of household financial well-being
(Figure 10).
- In reaction to the plummeting stock market, the percentage of shoppers feeling somewhat or much worse off about the worth of their investments more than doubled from 23% in March to 52% in October. The Up Market is particularly affected by the steep decline in the worth of their investments. This undoubtedly dampens their spending plans.
- The next-largest decline in feelings of financial well-being relates to home value—another measure having greater impact on the Up Market than others.
- For other measures—job security, household income level, credit card debt level, monthly mortgage and car payments—increasing percentages (from 5 to 9 percentage points) of shoppers are feeling somewhat or much worse off vs. last spring. In contrast to the previously mentioned measures (investment worth and home value), these issues hit the Down Market hardest.
Figure
10
Compared to this Time Last Year, How Much Better Off Are Shoppers in Terms of Economic Factors?
|
Total Primary Shoppers March 2008 |
Total Primary Shoppers October 2008 |
|
Down Market (Under $22,500) |
Middle Market ($22,500 – $84,999) |
Up
Market ($85,000+) |
Sample Size |
4041 |
4042 |
|
866 |
2138 |
1038 |
| |
|
|
|
|
|
|
Job security of employed household members |
|
|
|
|
|
|
Much/Somewhat Better Off |
22% |
16% |
|
11% |
17% |
19% |
No Change from Last Year |
62% |
60% |
|
58% |
61% |
60% |
Somewhat/Much Worse Off |
15% |
23% |
|
31% |
22% |
20% |
Household income level |
|
|
|
|
|
|
Much/Somewhat Better Off |
38% |
28% |
|
14% |
27% |
40% |
No Change from Last Year |
42% |
43% |
|
45% |
43% |
40% |
Somewhat/Much Worse Off |
21% |
30% |
|
41% |
30% |
20% |
Credit card debt level |
|
|
|
|
|
|
Much/Somewhat Better Off |
28% |
23% |
|
15% |
26% |
25% |
No Change from Last Year |
51% |
51% |
|
54% |
47% |
56% |
Somewhat/Much Worse Off |
21% |
26% |
|
32% |
27% |
19% |
Monthly mortgage and car payments |
|
|
|
|
|
|
Much/Somewhat Better Off |
21% |
17% |
|
11% |
18% |
22% |
No Change from Last Year |
65% |
65% |
|
65% |
65% |
63% |
Somewhat/Much Worse Off |
13% |
18% |
|
24% |
18% |
15% |
Worth of household members’ investments |
|
|
|
|
|
|
Much/Somewhat Better Off |
27% |
10% |
|
6% |
11% |
12% |
No Change from Last Year |
51% |
38% |
|
55% |
39% |
22% |
Somewhat/Much Worse Off |
23% |
52% |
|
40% |
51% |
66% |
Value of home |
|
|
|
|
|
|
Much/Somewhat Better Off |
30% |
17% |
|
11% |
18% |
20% |
No Change from Last Year |
50% |
49% |
|
63% |
50% |
35% |
Somewhat/Much Worse Off |
20% |
34% |
|
26% |
32% |
44% |
Highlighting/bolding indicates either a significant differences between total primary shoppers March 2008 vs. total primary shoppers October 2008, or significantly higher percentages between down-, middle-, or up-market shoppers vs. total primary shoppers October 2008.
Source: TNS Retail Forward ShopperScape™, October 2008
Target: Pay Less. Top Priority.
Target shoppers are tightening their purse strings. According to TNS Retail Forward’s ShopperScapeTM, the percentage of monthly Target shoppers planning to spend less in the coming month has been much higher in recent months compared with anticipated spending plans earlier in the year. As shoppers pull back, Target is experiencing a slowdown in sales and profit growth. It also has been recording a string of monthly same-store sales declines. In response, Target is turning up the volume on value and its “Pay Less.” proposition—a critical message in courting shoppers during this tough economic climate.
Jennifer Halterman
Senior Consultant, TNS Retail Forward
For more information on “Target: Pay Less. Top Priority” and the Retail Forward Intelligence System™ contact Kathy Clarke at 614-355-4009 or or email her at 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’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. |
| 