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Finally, shoppers are (slowly) coming back to shopping, but with new rules. Their rules. See it here first.

The Shopping Playbook

The new rules for Shopping are clear and firm. TEGIC RETAIL A R T /S L S W M O FR NEW REPORT BLE + PREDICTIVE A N O TI C A + ED D EN CURRENT DATA + TR


HOW AMERICA SHOPS® FUTURE SHOP (2011-2013) Shoppers have conquered their personal recession. They’ve learned a lot, and ready to shop again with new rules.

THE SHOPPING PLAYBOOK

1 2 3 4 5 6

Recession or Not, I’m going to Shop

People like to shop, they need to buy, but they don’t want all that debt again. Your Move: Reward shoppers for shopping smart. Help shoppers buy responsibly with innovative payment plans, pre-paying and rewards for shopping smart. Only then will they be able to buy more.

There are 15 rules for Future Shopping

Shoppers learned lessons during the recession that will stick and shape their future shopping. Your move: Play to their rules, and everyone will win.

There is no pent up demand.

There is a steady return to the essentials, and to some favorite brands. Your move: If you are selling furniture or clothing essentials, shoppers are back, other categories need to tap into their desire to get back to the brands they miss.

First shoppers to come back: Men. The Young. The Affluent. Minorities.

These 4 population segments are the most willing to spend now. Each have different reasons why they can/will spend, and some will surprise you. Your move: The future will not be about broad strokes, but smartly targeted appeals.

There are 4 ways shoppers are spending more; and 4 ways they are not.

This report covers how they are spending more, or not in 47 categories so you can design the right promotion strategy. Your move: Know how shoppers think about your category in order to develop the right promotions.

Retail creativity works.

The recession forced retailers to get creative, pay attention to the store, turn up the lights, polish the floors and paint the walls. Shoppers noticed (in some channels more than others) and they liked it. Your move: Understand which features of a better looking store can impact shoppers.


ES CATOR CATEGORI

44 LEADING INDI

METHODOLOGY

21 CHANNELS

Internet survey; conducted August ‘10. Nationwide sample of 1500 adults

Catalog Convenience Store Department Store BY ED YZ Discount/Off-Price Clothing ANAL Store The report will include data tables as Dollar Store follow, with trending comparisons as Drug Store appropriate vs. 2008 and 2009. E-mobile Home Improvement Store • Total Internet • Men and Women Mass Merchandiser/ Supercenter • Generation: Millennials, Gen X, Mall Boomers, Seniors - Enclosed • Income: under $50K, $50-$100K, $100K+ - Strip • Ethnicity: Caucasian, Hispanic, Specialty Store - Beauty African-American - Clothing - Home Furnishings E - Pet Supplies BL AVAILA ANALYTIC CELLS - Other Supermarket Shoppers at: - Full Line Dollar Stores (Dollar General, Family Dollar) - Limited Assortment Drug Stores (CVS, Rite Aid, Walgreens) TV Shopping Mass Merchandisers (Target, Walmart) Warehouse Club Supermarkets (Albertsons, Kroger, Publix, Safeway) Warehouse Clubs (Costco, Sam’s Club)

HOPS

RECOVERY WORKS

WSL/Strategic Retail will lead workshops for your company to: • D  evelop strategies that will increase sales for your brands, your categories, your retailers • Create Recovery Action Steps for your business • Workshop Details: »» Customized to your specific business »» 3 hours; 15-20 attendees »» Developed and facilitated by WSL/SR

Baby Personal Care Baking Ingredients Body Moisturizers Breakfast Cereal Bottled Water Cake/Crackers/Dessert Candy Cell Phone Service Clothing Coffee Computers/Software Carbonated Beverages/Soda Cosmetics Eating At Restaurants Electronics Entertainment (concerts, tickets) Fashion Accessories Fragrance Frozen Food Greeting Cards Hair Care Products Home Décor Home Fragrance/Candles Home Furnishing Home Service Ice Cream/Yogurt Household Cleaning Products Liquor Magazines Men’s Grooming OTC Medication Oral Care Outdoor Furniture Packaged Convenience Foods Paper Goods Pet Supplies Premium Cable TV Service Prescription Medication Salon Services Salt Snacks Skin Care Products Sleepwear/ Loungewear Take-out Foods Toys and Games Vacations Vitamins/Nutritional Wine

CONTACT US 307 SEVENTH AVENUE SUITE 1707 NEW YORK NY 10001 T 212.924.7780 F 212.924.7608 E INFO@WSLSTRATEGICRETAIL.COM


BUY HOW AMERICA SHOPS® FUTURE SHOP (2011-2013) TO KNOW... ...what shopping Moderation means in your category and channel. ...which categories are recovering. Spending behavior on over 47 categories.

...what shoppers do to make a category recover. There are many ways to spend more in a category: Use

more; go back to favorite brands; return to favorite stores, even if they cost more.

...which population segments are on their way to recovery or still stuck in the Great Recession. The report tracks Gender, Generations (Millennials, Gen X, Boomers, Seniors); Ethnicity (Caucasian, Hispanic, African American), Household Income.

HOW AMERICA SHOPS® FUTURE SHOP (2011-2013) REPORT ADD-ON:

WORKSHOP

A  NALYTIC CELLS* *See inside for the full list of Analytic Cells)

Please send check payable in US dollars to: WSL /STRATEGIC RETAIL, 307 Seventh Avenue, Suite 1707, New York NY 10001 NAME:

PHONE:

TITLE:

FAX:

COMPANY:

EMAIL:

ADDRESS: CITY:

STATE:

ZIP:

For more information or to order by credit card, please contact us at info@wslstrategicretail.com or 212.924.7780 (Businesses in NY state, please add 8.375% NY sales tax)

BONUS OFFER Purchase the report and receive a 1-year subscription to “Smart Moves” - examples of what smart companies are doing to survive and thrive.

As retail strategists and shopping futurists, we are recognized for our ability to turn shopper insights into smart actionable strategies. Never before has this been so essential. So let us help you navigate this new shopping world. 307 SEVENTH AVENUE SUITE 1707 NEW YORK NY 10001 T 212.924.7780 F 212.924.7608 E INFO@WSLSTRATEGICRETAIL.COM


© WSL MARKETING INC. 2010. NO PART OF THIS DOCUMENT MAY BE REPRODUCED WITHOUT WRITTEN PERMISSION FROM THE PUBLISHER

IN THIS REPORT 5 6 7 9 17 ...

BACKGROUND & OBJECTIVES

...

METHODOLOGY

...

HOW TO READ THIS REPORT

...

EXECUTIVE SUMMARY ...

DETAILED FINDINGS

17 25 31 35 43

49

...

...

Chapter 1: Yes! Recovery.

...

Chapter 2: Get Back To Shopping

...

Chapter 3: Playbook for Future Shopping

...

Chapter 4: What Spending More Looks Like

...

Chapter 5: Return To Spending By Category

APPENDIX


While there are no more than one-in-four shoppers coming back to spending in any of the 44 categories we studied, why and how this select group is doing so helps us understand what will drive the future of shopping. WHY they are spending more has most to do with financial confidence, and this confidence comes from a mix of more income and less debt. HOW they are spending more is primarily about taking advantage of sales, but also about some pent up demand.

WHY SHOPPERS ARE SPENDING MORE (For All Demographic Groups, See Table 7 in the Appendix)

Overall the top 3 reasons for coming back to spending are . . . • 32% feel more confident about their finances • 30% are tired of cutting back • 27% paid down debt, allowing them to shop again Once again it’s clear: more Men are confident about their future finances, and more than twice as many Men say their household income has already gone up. (Did they not tell their wives?)

REASONS FOR SPENDING MORE TOTAL

MEN

WOMEN

459 %

226 A %

233 B %

I feel more confident about finances

32

36 B

29

I'm tired of cutting back so much for so long

30

30

31

I've paid down my debt and feel I can spend more now

27

30

23

I cut back on major expenses (like a mortgage or car payment)

20

20

20

My household income has gone up

19

26 B

12

I got a new or better job

8

9

7

Base: Spending More in At Least One Category

36

© WSL STRATEGIC RETAIL 2010 HOW AMERICA SHOPS® FUTURE SHOP

© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher


Some of the other demographic differences are predictable, however, some are not. • More Upper Income shoppers returned to spending because they are most confident about their future (Lower Income, 25%; Middle Income, 34%; Upper Income, 49%), or their income has already improved (Lower Income, 11%; Middle Income, 23%; Upper Income, 31%). • More Millennials and Gen X say their income has gone up or they got a new or better job. • Overall, 30% were tired of cutting back so much for so long. This is especially true for the lowest income bracket, and Caucasians. • The #1 reason why Hispanics and African Americans have gone back to spending is that they have paid down their debt, 35% and 39% respectively, and now have more money available to spend.

REASONS FOR SPENDING MORE BY DEMOGRAPHICS <$50K

$50K <$100K

59*

198

194

67*

295

75

59*

C %

D %

E %

F %

G %

H %

I %

J %

36

30

27

25

34

49 EF

32

31

39

31

28

31

29

35

27

22

34 I

20

25

I've paid down my debt and feel I can spend more now

24

24

29

31

22

28

37 E

22

35 H

39 H

I cut back on major expenses (like a mortgage or car payment)

23

14

22

19

24

16

22

20

16

27

My household income has gone up

25 CD

25 D

16 D

5

11

23 E

31 E

16

27 H

25

I got a new or better job

16 CD

8D

2

3

8

9

6

7

12

5

MILLENNIAL

GEN X

Base: Spending More in At Least One Category

150

(18-32)

(33-44)

BOOMER SENIOR (45-63)

(64+)

83*

167

A %

B %

I feel more confident about finances

35

I'm tired of cutting back so much for so long

$100K+ CAUCASIAN HISPANIC

AFRICAN AMERICAN

* Caution small base.

© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher

© WSL STRATEGIC RETAIL 2010 HOW AMERICA SHOPS® FUTURE SHOP

37


Paths to Spending Again 55%

Stock up on sales

33%

Buy large economy sizes

25%

Trade-up from private label

20%

Pay more for brands I really like

HOW SHOPPERS ARE SPENDING MORE Having told us that they will not go back to their pre-recession buying behavior, shoppers have set rules for spending again, and most of their rules are about being smart shoppers. • Across all categories, spending more is about taking advantage of sales and stocking up on those sales (55%). • Across all categories, about 1/4 are no longer buying private label brands, instead going back to their favorites. This drops to 15% in Food and Beverages. • In keeping with their lessons learned during the recession, less than 20% are returning to more expensive stores and brands, or buying things they see and want. Spending more on Beauty (Cosmetics, Fragrance, Skin Care, Hair Care, Oral Care, Men’s Grooming)

• 56% are back to taking advantage of sales in Beauty and Personal Care. • 40% of shoppers who are spending more are using more, 30% are saving by buying larger sizes. • 27% are back to buying on impulse - the largest percent of any category. • 22% are returning to more expensive stores (a welcome sign for Department and Specialty stores) and brands they really like. Spending more on Health (Rx, OTC, Vitamins, Wound Care)

• 40% are taking advantage of sales on products like OTCs or Vitamins, 30% are using more and 30% are buying larger, economy sizes. Spending more on Food & Beverages (Breakfast Cereal, Salt Snacks, Candy, Carbonated Beverages)

• 61% of those spending more are stocking up on sales. • 35% are back to buying larger sizes. • 29% are once again buying products they missed.

38

• 24% are switching back to more expensive brands they really like. © WSL STRATEGIC RETAIL 2010 HOW AMERICA SHOPS® FUTURE SHOP

© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher


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