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Welcome to the ShopperScape™
Newsletter December 2007
- Expect Guitar Hero and other video and electronic games to win the popularity contest with parents especially in the aftermath of recalls of toys made in China.
- Plan for shoppers to seek more practical gifts, including gift cards, this year.
- Anticipate lots of deal-seeking gift buyers who have done their homework online prior to venturing to stores.
- Recognize this year’s holiday season as a zero-sum game at best for retailers, which mandates sharper pricing, more engaging promotions, tighter inventory control and better customer service than the competition offers.
- Anticipate shoppers on the tightest budgets to be shopping late in the season and looking for affordable gifts.
Early Promotions Attract Shoppers but Many Keep their Options Open
The most recent ShopperScape™ survey findings (fielded the week before through the day prior to Thanksgiving) reveal that some shoppers made a little more progress in fulfilling their holiday gift lists than last year at the same point in time. Shoppers had completed 24% of their shopping on average vs. 22% last year (Figure 1).
Figure
1
Average Percentage of Shopping Completed Just Prior to Thanksgiving
|
Nov-07 |
Nov-06 |
Average (including zeros) |
24% |
22% |
Percentage stating "don't know" |
14% |
NA |
Source: TNS ShopperScape™, November 2006 and November 2007
As the season progresses, shoppers’ plans continue to suggest a pullback from last year’s spending (Figure 2). However, this month’s Y-T-Y comparisons are less bleak than last month’s.
- This year, fewer shoppers (-3 percentage points) are saying that they plan to spend the same amount as they did last year.
- More shoppers (+2 percentage points) indicate plans to spend somewhat less than they did last year.
- Up Market shoppers are most likely (57%) to state they are holding the line on spending instead of planning to spend less.
- In contrast, Down Market shoppers are most likely to be reining in holiday spending or not shopping for holiday gifts.
Figure
2
Spending Intentions on Holiday Gifts This Year (Christmas, Chanukah/Hanukkah, or Kwanza) Compared with Last Year and by Income Market
| |
November 2007 vs.
November 2006 |
November 2007 by
Income Market |
| |
Nov-07 |
Nov-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 |
5% |
3% |
3% |
| Somewhat more |
11% |
11% |
0 |
10% |
10% |
13% |
| About the same amount |
48% |
51% |
-3 |
36% |
49% |
57% |
| Somewhat less |
21% |
19% |
+2 |
22% |
22% |
18% |
| A lot less |
12% |
11% |
+1 |
17% |
12% |
7% |
| I don’t buy holiday gifts |
5% |
6% |
-1 |
10% |
4% |
2% |
Source: TNS Retail Forward ShopperScape™, November 2006 and November 2007
Among shoppers who estimated their holiday gift budgets, the average amount reported ($590) is 6% below last year’s average estimate ($627) during the pre-Thanksgiving point in time. Differences among income market segments suggest Middle Market shoppers are pulling the reins in on spending most vs. last year: (Figure 3)
- Down Market shoppers plan to spend $296 on average this year, which is down 1% from last year.
- On average, Middle Market shoppers—the middle 50% of the income spectrum—plan to decrease their holiday spending vs. October 2006 by 6% to $510, which is below the overall average.
- Up Market shoppers plan to decrease their holiday spending vs. October 2006 by 2% to $930 on average.
- About the same percentage (37%) of shoppers don’t know what they plan to spend during the holidays yet vs. last year’s shoppers.
Source: TNS Retail Forward ShopperScape™, November 2006 and November 2007
As reported last month, Down Market shoppers—shoppers who are most economically vulnerable—are most likely to be undecided (47%) about what they will spend on holiday gifts. Between October and November only 2% more Down Market shoppers had determined their budgets. Comparing this month’s figures with the previous year shows Down Market shoppers historically decide what they can afford to spend late in the season, likely based on what’s left in their December paychecks after bills are paid (Figure 4).
Figure
4 Percentage of Shoppers Who Don't Know What They Plan to Spend on
Holiday Gifts This Year Compared with 2006 by Income Market
|
Nov-07 |
Oct-07 |
Nov-06 |
Down Market (<$22,500) |
47% |
49% |
47% |
Middle Market ($22,500 - $84,999) |
38% |
43% |
38% |
Up Market ($85,000+) |
26% |
30% |
28% |
Source:
TNS Retail Forward ShopperScape™, November 2006 and November 2007
What’s Hot and What’s Not
This year, gift cards displaced apparel-related items as the most popular type of holiday gift shoppers intend to purchase (Figure 5).
- Further evidence of the spending pullback, all top five categories are showing decreasing percentages of shoppers intending to purchase them except for gift cards, which shows flat Y-T-Y percentage purchase intent.
- What’s hot are video games and gaming systems such as Guitar Hero, which are likely displacing some toy sales.
- Cold, hard cash will be just as common as consumer electronics gifts. But, interest in consumer electronics gifts has increased—albeit slightly—from last year.
- Food/food baskets will be slightly more popular than home décor or home-related furnishings.
Figure
5 Types of Gifts Primary Shoppers Are Planning to Buy Holiday 2007 vs. Holiday 2006
|
Nov-07 |
Nov-06 |
Percentage Point Difference 2006 to 2007 |
Gift cards /gift certificates |
50% |
50% |
0 |
Clothing, clothing accessories or shoes |
49% |
52% |
-4 |
Toys/dolls/games (not video games) |
39% |
42% |
-3 |
Books |
31% |
35% |
-4 |
Pre-recorded music or video tapes, CDs or DVDs |
29% |
32% |
-3 |
Video games, video gaming systems or related accessories |
24% |
22% |
+2 |
Personal care or beauty items |
21% |
24% |
-3 |
Money/checks/bonds |
18% |
NA |
NA |
Consumer electronics or personal computer-related accessories |
18% |
17% |
+1 |
Food/food baskets |
15% |
NA |
NA |
Home décor or home-related furnishings |
14% |
17% |
-3 |
Sporting goods or leisure items |
12% |
13% |
-1 |
Fine jewelry |
10% |
10% |
0 |
Tools |
9% |
NA |
NA |
Plants/wreaths/flowers |
5% |
NA |
NA |
Other (specify)* |
15% |
19% |
NA |
Don’t know |
17% |
17% |
0 |
*YTY percentages are not comparable for "other" since additional categories were added as
potential responses in 2007.
Source:
TNS Retail Forward ShopperScape™, November 2006 and November 2007
Although gift cards remain the hottest item, the percentage of shoppers planning to buy them as holiday gifts this year declined between October and November by 6 percentage points (Figure 6).
- However, as many shoppers (24%) in November as noted in October didn’t know yet whether they would buy gift cards.
- Up Market shoppers will be the most avid buyers (70%) of gift cards.
Figure
6 Percentage Planning to Purchase Gift Cards for Holiday 2007
|
Total Holiday Primary Shoppers November 2007 |
Total
Holiday Primary
Shoppers
October 2007 |
Down
Market (<$22,500) |
Middle
Market ($22,500 - $84,999) |
Up
Market
($85,000+) |
Yes |
59% |
65% |
43% |
59% |
70% |
No |
17% |
11% |
24% |
17% |
12% |
Don't know |
24% |
24% |
33% |
24% |
17% |
Source: TNS Retail Forward ShopperScape™, October 2007 and November 2007
Shoppers who plan to purchase gifts cards, and were willing to venture estimates about how many and how much they intend to buy, reported plans to purchase 4.9 gift cards and spend $135 on average (Figures 7 and 8).
- These estimates are slightly below last month’s estimates of 5.4 gift cards and $145 average spending.
- More shoppers have decided to buy gift cards as the holiday shopping season rolls on. But one-third of shoppers remain undecided about how many they will buy and what they will spend—likely depending upon what alternatives they discover on the hunt to fulfill holiday lists.
- Among those able to estimate how many gift cards they intend to buy, the average of about five cards is consistent across income markets.
Figure
7 Average Number of Gift Cards Planning to Purchase*
|
Total
Holiday
Primary Shoppers November 2007 |
Total
Holiday Primary Shoppers October 2007 |
Down
Market (<$22,500) |
Middle Market ($22,500 - $84,999) |
Up
Market ($85,000+) |
Average number |
4.9 |
5.4 |
5.5 |
4.6 |
5.3 |
Don't know yet |
33% |
38% |
37% |
32% |
31% |
*Base equals primary shoppers estimating the number of gift cards they plan to buy.
Source:
TNS ShopperScape™, October 2007 and November 2007
Figure
8
Average Amount Planning to Spend on Gift Cards*
|
Total Holiday Primary Shoppers November 2007 |
Total Holiday Primary Shoppers October 2007 |
Down Market (<$22,500) |
Middle
Market ($22,500 - $84,999) |
Up
Market
($85,000+) |
Average amount |
$135 |
$145 |
$90 |
$121 |
$183 |
Don't know yet |
33% |
36% |
39% |
33% |
30% |
*Base equals primary shoppers estimating the amounts on gift cards they plan to spend.
Source: TNS ShopperScape™, October 2007 and November 2007
Who’s Winning and Who’s Missing Out on Gift Cards
Some lines of trade are doing a better job than others in promoting gift cards (Figure 9). Comparing percentages of where shoppers are planning to shop for holiday gifts in general with percentages of shoppers planning to buy gift cards at various lines of trade shows:
- Restaurants/coffee shop gift cards remain most popular followed by discount store/supercenter and value department store gift cards.
- Among the top five channels shoppers plan to shop for holiday gifts—discount stores/supercenters, value department stores, toy retailers, traditional department stores and book and media stores—book and media stores have the highest (37%) percentage of shoppers planning to buy gift cards. In contrast, only 15% of toy retailers and 22% of traditional department store shoppers plan to buy gift cards.
- Among apparel-related channels, specialty apparel stores are doing the best job of promoting gift cards to shoppers. Only 12% of shoppers plan to shop at specialty apparel stores for holiday gifts but 39% of them will be buying gift cards.
- Also, a higher-than-average percentage (33%) of consumer electronics store shoppers will be gift card purchasers.
- Although about half (48%) of grocery store/supermarket holiday gift shoppers will be buying gifts cards, only 8% of warehouse club holiday gift shoppers will be doing so.
Figure 9
Where Primary Shoppers Are Planning to Shop and Buy Gift Cards
|
Shop
(n = 3806) |
Buy Gift Cards
(n = 2229) |
Percentage of Shoppers Buying Gift Cards in Channel |
|
|
|
|
Discount stores/Supercenters |
35% |
17% |
28% |
Value department stores (such as JCPenney, Kohl’s, Sears, etc.) |
30% |
16% |
31% |
Toy retailers |
22% |
6% |
15% |
Traditional department stores (such as Belk, Dillards, Macy’s, etc.) |
22% |
8% |
22% |
Book and media stores |
21% |
13% |
37% |
Warehouse clubs |
15% |
2% |
8% |
Catalogs |
13% |
NA |
NA |
Consumer electronics/appliance/computer stores |
12% |
7% |
33% |
Specialty apparel stores (such as Ann Taylor, Chico's, Gap, etc.) |
12% |
8% |
39% |
Personal care beauty retailers |
9% |
3% |
20% |
Factory outlet stores |
9% |
NA |
NA |
Grocery stores/supermarkets |
8% |
7% |
48% |
Sporting good stores |
8% |
4% |
27% |
Crafts or fabrics store |
7% |
2% |
19% |
Small-format value stores (such as dollar stores) |
7% |
1% |
9% |
Home improvement/hardware stores |
7% |
8% |
70% |
Gadget/gift/theme stores |
6% |
2% |
15% |
Drug stores |
6% |
1% |
13% |
Upscale department stores (such as Bloomingdale’s, Nordstrom, Saks 5th Avenue, etc.) |
6% |
2% |
24% |
Home furnishings/domestics stores |
5% |
2% |
23% |
Jewelry stores |
4% |
1% |
15% |
Shoe stores |
3% |
2% |
27% |
Office supply stores |
3% |
1% |
22% |
Restaurants/coffee shops |
NA |
22% |
NA |
Credit card gift cards (e.g., Visa, MasterCard) |
NA |
12% |
NA |
Entertainment venues (e.g., movie theaters, sporting venues) |
NA |
8% |
NA |
Online Retailers |
NA |
5% |
NA |
Catalog Retailers |
NA |
1% |
NA |
Other |
9% |
9% |
NA |
I don’t know |
20% |
22% |
NA |
Source:
TNS ShopperScape™, November 2007
Going Online before Hitting the Stores
Pre-store shopping online has become integrated into shoppers’ journeys, especially as gas prices soar. Almost six of out 10 (57%) holiday gift shoppers plan to do some online shopping (defined as shopping whether or not a purchase is made) this year (Figure 10).
- Up Market shoppers (72%) will be the most avid online shoppers.
Figure 10
Percentage Planning to Shop Online for Holiday Gifts
|
|
Total
Primary Shoppers |
Down Market (<$22,500) |
Middle
Market
($22,500 - $84,999) |
Up
Market ($85,000+) |
Yes |
57% |
44% |
56% |
72% |
No |
24% |
34% |
25% |
14% |
Don't know |
19% |
23% |
19% |
14% |
Source: TNS ShopperScape™, November 2007
Of shoppers planning to shop online, half plan to purchase holiday gifts or gift cards online this year (Figure 11).
- Up Market online shoppers (55%) are more likely to buy online than Down or Middle Market online shoppers.
- Middle Market online shoppers are just as likely (25%) as Down Market online shoppers not to convert their online shopping to buying.
Figure 11
Percentage Planning to Purchase Holiday Gifts or Gift Cards Online*
|
Total Primary Shoppers |
Down Market (<$22,500) |
Middle Market ($22,500 - $84,999) |
Up
Market ($85,000+) |
Yes |
50% |
46% |
49% |
55% |
No |
24% |
25% |
25% |
22% |
Don't know |
26% |
30% |
26% |
23% |
* Base equals primary shoppers planning to shop online.
Source:
TNS ShopperScape™, November 2007
Average spending online is estimated at $261 by shoppers planning to purchase online and willing to hazard a guess about how much they will spend on holiday gifts or gift cards online (Figure 12).
- Up Market shoppers’ plans for online spending are much more robust—$371 on average—than other income segments.
Figure 12
Average Amount Planning to Spend Online for Holiday Gifts or Gift Cards*
|
Total Primary Shoppers |
Down Market (<$22,500) |
Middle Market ($22,500 - $84,999) |
Up
Market ($85,000+) |
Average amount |
$261 |
$129 |
$218 |
$371 |
Don't know yet |
38% |
47% |
39% |
33% |
*Base equals primary shoppers planning to buy online and estimating the amounts they plan to spend online.
Source:
TNS ShopperScape™, November 2007
Post Script on the Year of the Pig
As the Chinese Year of the Pig squeals to an end, holiday toy shoppers have understandably become even more skittish than they were last month. November 7, 2007 marked one of the most serious recalls to date—Aqua Dots with beads that can leave children who swallow them comatose. But, it also represented the recall date of Big Red Wagons, Robot 2000, Dizzy Ducks Music Box, Winnie-the-Pooh Spinning Top, Duck Family Collectable Wind-Up Toy, Pull-Back Action Toy Cars and the Dragster and Funny Car toy—all due to excessive levels of lead paint.
Recent ShopperScape™ findings show that the vast majority of parents and other shoppers of holiday gifts for infants or children—60% of shoppers overall—are taking action to ensure presents are safe. And, these actions are likely to dampen this year’s toy sales (Figure 13).
- About one-quarter (27%) of toy shoppers will examine toys more carefully before buying.
- A large percentage (18%) of shoppers is placing trust in retailers to clear unsafe toys from their shelves.
- Another 16% of shoppers for infants and children is seeking toys made somewhere other than China.
- Some shoppers (11%) will buy fewer toys this holiday season.
- Only about one in 20 shoppers for infants and children are either unaware of the recalls or not changing their buying plans despite the recalls.
Figure 13
Influence of Chinese-Made Product Recalls on Holiday Buying for Infants or Children
|
Percentage of primary shoppers |
Percentage of shoppers buying holiday gifts this year for infants or children |
60%
|
|
Percentage of shoppers buying for infants or children |
I will more carefully examine particular infants and children's products made in China before buying. |
27% |
I'm relying on retailers to make sure the holiday gifts I buy for infants and children are safe. |
18% |
I usually buy gifts other than toys for infants and children so my purchases are not influenced by the recalls. |
18% |
I will buy toys made in other countries than China for infants and children this holiday season. |
16% |
I will buy fewer toys for infants and children this holiday season. |
11% |
I'm not aware of recalls of Chinese-made infants and children's products. |
3% |
Many of the products for infants and children are made in China so I won't be changing my buying plans. |
3% |
Some other way |
4% |
Source:
TNS Retail Forward ShopperScape™, November 2007
Industry Outlook: Warehouse Clubs Warehouse clubs continue to be one of the fastest growing sectors among food, drug and mass retailing. TNS Retail Forward forecasts the industry’s sales growth rate will moderate somewhat in the next five years due to slower new store expansion and the challenge to sustain high growth levels at existing stores. Clubs increasingly will focus on initiatives to drive club traffic, raise basket (or cart) size and capture more share of wallet and share of life.
Katia Watson, Consultant, TNS Retail Forward
For more information on “Industry Outlook: Warehouse Clubs” and the Retail Forward Intelligence System™ contact Kathy Clarke at 614-355-4009 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.
|
|
