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The BIGinsight™ Consumer Intentions & Actions®
Survey monitors over 8,000 consumers each month providing unique
insights & identifying opportunities in a fragmented and transitory
marketplace.
Talking Points:
- Scary! Confidence drops to 22.0% this month
- Focus on necessities on par with recession-era Oct-08
- It’s bargain hunting season: cutting back on spending is top financial priority
- Pump price pressures have eased, but expect smart shopping strategies to continue
- One in four only buy clothing on sale
- Consumer Migration: Children’s Clothing
- 90 Day Outlook: Shoppers have more treats than tricks in mind for retailers
- What’s Hot…a full time job or Sofia Vergara? The outcome may shock you (or not, given what you know about the economy)
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Need a scary Halloween costume this year? Try dolling up as the economy…this month, only 22.0% say they are very confident/confident in the chances for a strong economy, sinking further from last month’s dismal 22.7% as well as the less-than-impressive Oct-10 (28.5%) and Oct-09 (30.4%) readings. This isn’t the lowest October confidence reading in our record book, though…amidst bank failures and the plunging stock market, just 19.0% proclaimed confidence in our economy in Oct-08.
With all remaining status quo on the home front (you know…high unemployment, high debt, lousy housing market), worry remains relatively stable in October…this month, about one in five (21.9%) say they continue to be concerned about political and national security issues, lowering a point from September (22.8%), but remaining slightly elevated from Oct-10 (21.3%).
This isn’t the news that retailers wanted to hear headed into the Holiday ’11 shopping season, but the majority of consumers (50.8%) are continuing to focus on practicality when spending. This month’s reading is relatively flat from September (51.1%), and tracking slightly higher than Oct-10 (48.6%) as well as Oct-09 (48.8%).
You’d better start making your case for needing that new 3D TV, tablet, or high-end handbag under the tree…those focused on just the necessities when at the store also remains elevated in October, currently at 58.1%. This figure is on par with last month (58.4%) as well as Oct-08 (57.8%)…yes – you read that right – October 2008.
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High unemployment seems to be the sticking point for consumers’ confidence in the economy…in October, more than one in three (35.1%) contend there will be “more” layoffs over the next six months, rising from 27.9% one year ago. The majority (51.8%) thinks layoff levels will remain the “same” (recall that same = 9.1% official unemployment rate). About one in ten (13.1%) is hoping for “fewer,” five points lower than what was recorded in Oct-10 (18.5%).
Is this the silver lining to the unemployment problem? Those gainfully employed seem pretty secure about keeping their jobs…just 3.4% say they are concerned with being handed a pink slip, lowering half a point from a year ago (3.9%) and less than half that of the Oct-08 reading (7.5%).
Expect stores abound with bargain hunters this holiday season, as cutting back on spending is the primary financial concern for more than a third (35.5%) over the next three months, rising from 34.6% one year ago. Nearly as many (32.9%) plan to pay down debt, lowering a point from Oct-10 (33.9%). More than a quarter (27.0%) plans to increase savings during Q4, while 24.0% intend to pay with cash more often.
While pump prices have eased the pressure on consumers’ wallets over the past few weeks, don’t expect the smart shopping strategies adopted to deal with fluctuating $/gal to fall by the wayside….more than two in five (42.0%) say they are still taking fewer shopping trips to conserve gas. The same number of people will continue to shop for sales more often (42.0%) and shop closer to home (41.6%). More than a third are still clipping coupons (36.9%) and/or buying up store brand/generic items (34.9%).
Nearly one in three drivers (32.9%) is predicting that pump prices will begin climbing again by the end of the month, much lower than the nearly half (46.1%) who felt the same way in September. Two in five (46.6%) anticipate that prices will stabilize, while one in five (20.5%) is confident that the cost of fueling up will continue to go down. The average pump price expected by the end of October is $3.53/gal, lowering from the $3.73/gal predicted at the close of September.
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Sale racks in apparel will be shopped this holiday season as a quarter of consumers (25.0%) contend they only buy clothing on sale, rising three points from September (22.0%) and half a point from Oct-10 (24.4%). Three in five (61.7%) say they usually buy apparel on sale, while a mere 13.3% indicate that sales aren’t important.
Sale or no sale, shoppers are increasingly checking labels before heading to the check-out…nearly half (46.4%) say that familiar clothing labels are important to them, rising from 45.3% in Oct-10 as well as 41.8% in Oct-09.
With leading labels from the likes of Vera Wang, Lauren Conrad, and now Jennifer Lopez, Kohl’s seems to have found a recipe for success when going head-to-head with Walmart in Women’s Clothing. While the big W continues to lead this category (with 12.6% shopping there most often), the gap between it and #2 Kohl’s has narrowed from 3.3 points in Oct-10 to 1.6 points presently. The Top 5 in its entirety: 1. Walmart (12.6%), 2. Kohl’s (11.0%), 3. Macy’s (7.1%), 4. JC Penney (6.9%), 5. Target (2.6%).
Walmart has a more secure lead over in the Men’s section…16.2% say they shop the discounter most often, ahead of Kohl’s (10.8%), JC Penney (8.8%), Macy’s (5.8%), and Target (3.3%).
Walmart completes the apparel trifecta with the top spot in Children’s Clothing as well…here, 15.0% shop the Bentonville behemoth most often…Kohl’s follows farther behind with 6.6%. Target (5.0%), JC Penney (4.0%), and Macy’s (2.3%) complete the Top 5.
Practical consumers focus on price (54.4%) most often when deciding where to shop for Children’s apparel…selection (35.3%), quality (29.3%), location (26.4%), and a good selection of sizes (21.7%) also factor into the buying equation.
While Walmart maintains the clear advantage in Children’s Clothing, will any retailers erode this lead in the coming years? According to this month’s Consumer Migration Index (CMI), which tracks those who have immigrated to a store (new customers within the past year, “In”) against those who have emigrated (left within the past year, “Out”) and where a positive reading spells net growth to a retailer, four out of the Top 5 retailers in this category face a customer deficits, most notably Walmart (-1.3 CMI) and JC Penney (-1.0).
Now why isn’t Kohl’s included in the above chart? Kohl’s didn’t register enough customers leaving their store in the past year to calculate a specific CMI rating. By this fact, though, we can assume a positive CMI for Kohl’s – a customer surplus. Given this data, the department store darling is likely to shorten Walmart’s lead in this category.
Finally, among Children’s Clothing shoppers of one year or less, the top reason cited to switch stores was high prices (17.6%). Inconvenient location (9.0%), poor selection (5.1%), and decline of store appearance (4.6%) are also worth noting.
Another exciting holiday season may be in store for Children’s Toys…while Walmart is tops in this category (with 22.1% shopping there most often), Toys R Us (17.2%) maintains a respectable legion of followers as well. Target (6.9%), Amazon.com (1.7%), and Kmart (1.1%) follow not-so-closely behind.
For toys for those big girls and boys - Electronics - expect the majority of shoppers to head to Best Buy (31.0%) or Walmart (21.0%). Amazon.com (5.0%), Target (3.8%), and Sears (1.6%) round out the Top 5.
While the majority (51.9%) of shoppers head collectively to traditional grocers for their foodstuffs, that one big discounter continues to lead the Grocery category, specifically speaking. Nearly one in five (19.9%) stock their pantries with help from Walmart. Kroger (6.7%), Publix (3.6%), Safeway (2.7%), and Shoprite (2.4%) follow in the single digits.
While one’s not likely to find their ghoulish face paint in the Health & Beauty Care aisle (OK, maybe some will), for those everyday cosmetics, shampoos, and such, nearly a third of consumers (30.1%) head to Walmart most often. The big discounter leads CVS (10.8%), Walgreens (9.5%), Target (6.8%), and Rite Aid (3.4%).
Traditional druggists maintain their lead over the big discounter over in Prescriptions, though…here, Walgreens (16.5%) and CVS (16.1%) fill ‘scripts more often for consumers than Walmart (11.9%), Rite Aid (5.4%), and Target (2.7%).
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Fortunately for retailers this month, shoppers have more treats than tricks in mind as many categories improve from September according to the BIGinsight™ Diffusion Index. Apparel categories, toys, CDs/DVDs, and Electronics are bright spots compared to a month ago as well as Oct-10 and Oct-09. Home categories – Improvement, Lawn & Garden, Furniture, Décor, and Linens/Bedding – are falling flat. While spending looks to be perking up from the past few years, these results are tempered by the fact that all categories fail to improve from pre-recession Oct-07.
Retail Merchandise
Categories - 90 Day Outlook
(Oct-11 compared to Sept-11, Oct-10, and Oct-09)
With new Kindles and iPhones making their way to the selling floor, six month purchase intentions for mobile devices are looking upward compared to a year ago. Autos, computers, furniture, and housing are also showing signs of improvement. TVs and vacation travel are holding pretty steady from Oct-10, while digital cameras look a little passé.
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What kind of economy do we live in where having a full-time job is hotter than Modern Family’s Sofia Vergara? And, sending a text trumps sending an email, which outranks sending a card through the mail. Those under 35 still find appeal in Netflix (or whatever it’s called these days), and young women in particular love the owl trend in home décor, apparel, and jewelry. What’s not? “Mandals”…men + open-toed sandals = a big fashion DON’T.
Editor
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