How America Shops MegaTrends 2010

For 20 years, How America Shops®
forward-thinking research
has successfully predicted shopper
attitudes and behaviors,
new channels and developing categories.
This 2010 edition will help you
successfully navigate
your odyssey to the new retail world.
“The great recession” has changed the future of retail.
It has brought to an end one of the most transformational decades in history our social, political and economic history, and, yes, our shopping history.
This recession wasn’t the beginning of a behavioral shift, it was the conclusion.
For years shoppers intended to de-clutter, live simple and spend less.
But, it took the financial crash to make that happen.
Now! new white spaces emerge.
Prepare to begin a journey into the unknown.
An odyssey of almost mythic Greek proportions.
Navigating your business through the obstacles will be stormy…
but less so if you follow shoppers into the future.
Be alert to the hurdles as you navigate your odyssey into the new retail world.
How America Shops® MegaTrends 2010 will be your guide to:
»» Shopper sectors that will re-shape retail
»» The passing of “channels”
»» Pillars of retail that will decline/disappear
»» Categories that will re-shape every aspect of the store (What is a store, anyway?)
defining the future of the retail world...
Since 1986, WSL/STRATEGIC RETAIL has helped global clients build smart shopper
strategies for today, and envision tomorrow. Our insightful understanding of shoppers,
their behavior and the retail landscape leads our clients to success.
Experience
04
RETAILers
Avon
Boots (UK)
Bath & Body Works
Charming Shoppes/Lane Bryant
CVS/pharmacy
Disney
eBay
Edgars (South Africa)
General Growth Properties
Honey Baked Ham
JC Penney
JP Morgan/Chase
Kate’s Paperie
Kohl’s
O Boticario (Brazil)
Rite Aid
Home Shopping Network
Sainsbury’s (UK)
Saks Fifth Avenue
Sephora
Target
Ulta
Victoria’s Secret
Walgreens
Walmart
Wegmans
Manufacturers
American Greetings
Campbell’s
Condé Nast Publications
Coty
Diageo
Donna Karan
Energizer
Estée Lauder
First Quality
General Mills
Gillette
Givaudan
Glaxo Smith Kline
Goody Products
Hachette Filipacchi Media
Hallmark
Hearst Publications
Helen Kaminski (Australia)
John Sands (Australia)
Johnson & Johnson
Kraft
L’Oréal
Mattel
Maybelline/Garnier
Nestlé
Nestlé Purina
Neutrogena
Newell
Pacific Brands Limited (Australia)
PepsiCo
Pfizer
Pierre Fabre (France)
Procter & Gamble
Revlon
S.C. Johnson
Telescope Casual Furniture
Time Inc.
Unilever
Associations
CEW
FMI
GDI
GMA
GMDC
MPA
NACDS
NACS
PLMA
W H AT Y O U W I L L L E A R N F R O M
TO GUIDE YOUR
SUCCESSFUL ODYSSEY
New white spaces emerge
But first you must get through the dark days. Shoppers are not going back to their old ways. There
is no “New Normal” here, only uncharted shopping territory.
You need to be open to change not blinded by business as usual.
When will it end?
Economists were late to call it a recession and will be early to call an end to it. Shoppers believe
their “personal recession” will linger way beyond the official one.
Count on 2 more years of recession mindset. At least.
The end of channels
If it takes two or more powerful players to make a channel then there are no more channels. The
future is about powerful retailers, and fewer of them.
Don’t jump to the conclusion that it’s all about Walmart.
Shoppers say, “Not so!”
The launch of new retail
The Odyssey means following shoppers where they really shop now - whether it’s Amazon or Aldi.
You need to understand why and where they are going and where you fit.
There’s a new shopping decision tree. It’s not what it was.
New shopper sectors = New opportunities
Demographics have surprisingly little to do with shoppers’ recovery mindset. Future shopping
behaviors will be shaped by how badly or gently shoppers travelled through the recession.
5 Shopper Sectors will define future shopper opportunities.
Finally health & Wellness goes mainstream
Forced to cut back on expensive take-out food and eating out, shoppers went back to home cooking,
healthier lifestyles and the supermarket. Now wellness goes beyond food.
Find your white space in the new health & wellness movement
Online shopping defines the new retail world
The success story of the recession has been online shopping. No longer only for the rich or techies: now
it’s smart and easy shopping for all -- and so many points of access. (Mobile shopping anyone?)
No wonder Walmart worries about Amazon. What about you?
05
RETAIL CHANNELS
Catalogs
Convenience Stores
Deep Discount Supermarkets (e.g. Aldi)
Department Stores
Discount Clothing Stores
Dollar Stores
Drug Stores
Home Improvement Stores
Mall/Strip Mall
Mass Merchandisers/Supercenters
Mobile
Online
Supermarkets
TV Shopping
Warehouse Clubs
Specialty Stores
»» Beauty
»» Books
»» Clothing
»» Electronics
»» Food
»» Greeting Cards
»» Home
»» Liquor/Wine
»» Office Supplies
»» Toys
»» Vintage/Reuse
»» Vitamins/Nutrition
LEADING INDICATOR CATEGORIES
Clothing
Computer/Software
Cosmetics
Electronics
Fashion Accessories
Food & Grocery
Food - Produce
Food - Take-out
Food - Eating at Restaurants
Fragrance
Greeting Cards
Hair Care
Home Décor
Home Furnishings/Appliances
OTC Medication
Pet Supplies (Food & Accessories)
Skin Care
Vitamins & Supplements
Wine/Liquor
KEY SHOPPER SEGMENTS
06
Age
Gender
18-34
35-54
55-70
Men
Women
Income
<$25K
$25K - <$40K
$40K - <$75K
$75K - <$100K
$100K +
Ethnicity (Women)
African American
Caucasian
Hispanic
+ 5 Shopper Sectors
INTERVIEW METHOD
SAMPLE
HOUSEHOLD INCOME
AGE
QUESTION TOPICS
National Internet Survey
1950 shoppers New larger sample in 2010
»» 1530 women - primary shopper in the household
»» including quota samples of:
-- 150 Hispanic women
-- 150 African American women
»» 420 Men - who do some household shopping
$25,000 - $100,000 +
18-70
Trended 2006, 2008, 2010
»» Shopping Behavior: Number of shopping trips/week
»» Shopping Channels: Last week, last 3 months
»» Category Purchase Behavior:
-- Spending vs. year ago
-- Channels shopped
Attitude and Values that influence shopping life.
»» e.g., spending confidence, trade-offs in spending, health and
wellness.
Recession/Recovery
»» How long their “personal recession” will last
»» How do they “cluster” into shopper personalities
ACTION STEPS
Recovery Values
»» How are shoppers changing
»» What are their new values
PRESENTATION
Customized to each client’s industry and issues
07
TABLE OF CONTENTS
ABOUT US
5
OBJECTIVES & METHODOLOGY
7
EXECUTIVE SUMMARY
11
SECTION 1: HOW WOMEN SHOP
27
•
•
•
•
Emotions and Attitudes that Influence Shopping
Shopping Behavior
Spending on Leading Indicator Categories
Where Categories are Purchased “Most Often”
SECTION 2: HOW ETHNIC WOMEN SHOP
•
•
•
•
Emotions and Attitudes that Influence Shopping
Shopping Behavior
Spending on Leading Indicator Categories
Where Categories are Purchased “Most Often”
SECTION 3: HOW MEN SHOP
•
•
•
•
Emotions and Attitudes that Influence Shopping
Shopping Behavior
Spending on Leading Indicator Categories
Where Categories are Purchased “Most Often”
SECTION 4: SHOPPER PERSONALITIES
•
•
•
•
APPENDIX
Emotions and Attitudes that Influence Shopping
Shopping Behavior
Spending on Leading Indicator Categories
How to Use the Shopper Personalities
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46
52
65
66
73
77
80
83
84
91
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101
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107
114
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© 2010 WSL STRATEGIC RETAIL, no part of this publication may be reproduced or redistributed without written permission from the publisher.
EXECUTIVE
SUMMARY
© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher
The Odyssey
Challenges
Opportunities
White Spaces
Two years ago, in the 2008 edition of How America Shops® MegaTrends, we
warned that shopper anarchy was imminent (thus the title of the study “Anarchy.”) The signs of disillusionment with a life of shopping, buying and consuming
were evident even then. Prices on everything were going up. Home values and
stocks were going down. Savings were non-existent; credit was maxed out.
American shoppers were stretched too thin. And then the house of cards collapsed (aka the House of Lehman). In How America Shops® 2008 we didn’t
predict the Great Recession but we did predict the end of the shoppers’ passion
to consume.
The Odyssey to a New Retail World Begins
The difficult journey begins now as the economy teeters toward recovery.
After almost a decade of calamitous change that has transformed the way Americans live and shop, this recession was the final curtain call. Americans changed
how and where they shopped, first through necessity, now through choice. They
now no longer live to shop, they shop to live. They have a new set of shopping
values that are entrenched, certainly for the near term.
As a result, there is lots of white space emerging that reveals new challenges (as
established channels, retailers and brands are tested), new opportunities (as new
channels, retailers and technologies emerge) and new means of growth (as new
shopper values materialize). In order to succeed now, companies must understand new shopper attitudes, values and the new Terms for Success for brands
and stores and shoppers.
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COPYRIGHT 2010
How America Shops® 2010 MegaTrends Study
The Odyssey Begins to the New Retail World
Executive Summary
© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher
The Top 7 Terms for Success for Your Odyssey
There are 7 Truths upon which companies need to (re)build shopper strategies for
the coming years. Ignore them at your peril. Understand them and white spaces
of opportunity emerge.
01 The end is not near
When will the recession end? If we knew that we’d be billionaires (and this report
would need a new author). What we do know is when shoppers think it will end.
53% of women feel the recession will last at least another 1 to 2 years.
43% think it will take at least another 3 to 6 years or more.
So, for all intents and purposes, it will be the end of 2011 before we can even think
of recovery. (Takes your breath away.)
How long do shoppers think it will it take for their personal finances to improve?
Here’s some good news.
40% feel by the end of 2010.
47% feel it will take at least 2 to 3 years – or they have no idea how long.
13% say they really were never affected by the recession.
Worth noting: women, men, the affluent and all ages of shoppers agree on this.
02 T here is no pent-up demand - less is really more
The 2009 holiday shopping season nixed the idea that shoppers had over a year of
pent-up demand that would send them rushing to the stores to splurge on gifts for
themselves and each other. In fact, shoppers are quite okay spending less.
“Less is more” has become a fundamental value shift.
63% of shoppers don’t want to buy as they did before.
Even the affluent.
How America Shops® 2010 MegaTrends Study
The Odyssey Begins to the New Retail World
Executive Summary
© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher
COPYRIGHT 2010
13
03 Smart shopping rules
The obsession with paying less is now nearly universal.
70% of women agree “It is important to get the lowest price on most things I
buy.” + 6 points since 2008 and + 17 points since 2004.
Smart shopping is also about the shopper being absolutely assured she’s getting the best value for her money --- whether she’s buying diapers, cereal or a
designer handbag. As a result, she’s willing to stop, pause, rethink her purchase
before she puts an item in her basket – or will take an item out of her basket at the
checkout if she thinks it’s not really worth it.
The “cautious pause” we defined six years ago, is now part of her everyday
shopper psyche and values.
64% of shoppers ask themselves “Is this a smart use of my money?”
+ 8 points since 2008 and +16 points since 2004.
Money has become more important than time (or gas, for the moment).
53% of shoppers will go further to shop in stores where they can save money,
- 5 points from 2008 when gas prices were higher and +10 points since 2004;
Only 19% will pay a bit more to shop in stores where they can get in and out
quickly, –15 points since 2004.
04 Fear still reigns
Whether your frame of reference for an “odyssey” is the mythical Greek journey
or Star Wars, the perils are the same — fear of the unknown and continues to
affect how people feel about shopping and spending.
47% of women are uncertain about the future, so 52% are staying out of stores
where they are tempted to overspend. (The same is true for 1/3 of those earning
over $150k.)
32% constantly worry about how much debt they have, and 25% have
promised themselves they will never get into such debt again. (While this
is not as big an issue for those with incomes over $150k, still 17% and 14%
respectively are worried about the level of their debt.)
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COPYRIGHT 2010
How America Shops® 2010 MegaTrends Study
The Odyssey Begins to the New Retail World
Executive Summary
© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher
05 Premium brands are in peril
We wish there was some good news to report here, but we don’t see it. Shoppers’ willingness to pay more for brands is shaky. As their spending power has
declined, more have opted for lower-priced brands that let them save money, and
not enough believe paying more actually ensures a better product.
50% now choose lower priced brands, +16 points since 2004.
Only 31% agree that trusted brands are worth paying more.
06 Many like to shop (still); many don’t
The core of women who enjoy shopping is unchanged, even during these years of
learning to spend less.
42% of women enjoy browsing, the same as in 2004 (39%).
38% agree they still love to shop, even though they are buying less of
everything.
On the flip side, as many women have found other ways to use the time they once
spent shopping.
40% like spending less time shopping and more time doing other things.
07
Demographics matter less now
Throughout this report it is startling how little demographics matter. The rich are
not as different from everyone else (at least emotionally); and overall, the young
have become as conservative in their attitudes toward shopping and their willingness to spend as older shoppers.
25% of shoppers with +$150k incomes say their finances were not affected
by the recession, however . . . one-third are cutting spending, avoiding places
where they are tempted to over-spend, and are content buying less.
50% or more of all age and income groups feel the recession will be around at
least 2 more years, and agree it will take them at least 2 more years to recover
their financial stability. (One difference is that more of those 55+, whose prime
earning years are behind them, have no idea when, or if, their finances will
recover.)
How America Shops® 2010 MegaTrends Study
The Odyssey Begins to the New Retail World
Executive Summary
© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher
COPYRIGHT 2010
15
Shopping Trends
2010
Trips & Stops Increase as Stocking-up Declines
Women are trying to live within their budget --- which means resisting the
temptation to stock up if they can’t pay for it. Stocking up less means more trips to
replenish, and going to more stores to find the best sales and the lowest prices.
Therefore, the new, smart and thrifty shopper is making more trips in a week to
more stores.
In a 3-month period women have trimmed their shopping portfolio a bit, but not
much (8.2 channels now vs. 8.6 in ’08), but they are controlling their spending
when they are in those stores.
WEEKLY SHOPPING TREND
(BY TOTAL WOMEN)
3.9
3.6
AVERAGE # OF
SHOPPING TRIPS
3.7
AVERAGE # OF
OUTLET SHOPPED
White spaces:
The Internet redefines channel choices.
Department Stores and Malls slip - again.
---- and lots more.
Mass Merchandisers/supercenters and Supermarkets are still the top two chains
shopped in 3 months. In 2008, Supermarkets had begun to regain their position
against the mighty Supercenter. They have now solidified it during the recession as a) more women shop for ingredients to prepare food instead of buying
take-out, and b) avoid the Mass Merchandiser where they can be tempted to
overspend on the wide array of everything beyond food.
A sign of the times is that Dollar Stores have moved into the #4 slot, just ahead
of Department Stores. (It’s not that Dollar Stores are gaining shoppers, it’s that
Department Stores are losing so many.)
Online shopping has taken a big leap forward. Once all about convenience and
selection, the Internet has become the go-to channel to find lowest prices and
coupons.
• On a weekly basis, 24% of women now shop Online (+14ppts since 2008). That
makes the Internet #3 behind Mass Merchandisers and Supermarkets (both at
64%) weekly, and ahead of Drug Stores (20%) and Department Stores (18%).
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COPYRIGHT 2010
How America Shops® 2010 MegaTrends Study
The Odyssey Begins to the New Retail World
Executive Summary
© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher
• In 3 months Online shopping took a big +13ppts leap over ’08 to 47% of women
shopping the Internet in the last 3 months.
Specialty Stores overall are holding during the recession. In many categories
they are a mix of lower priced big box stores, like Best Buy or Old Navy as well as
higher priced stores like Abercrombie & Fitch.
• However, Specialty Stores for Books, Greeting Cards, Home Furnishings,
Office Supplies and Vitamins have each declined by 3 to 5 ppts. vs. 2008.
While 3 – 5ppts may not seem a lot, it reflects a loss of shoppers who are now
focusing their trips on places where they can get a lot done under one roof,
save money, and not be tempted to overspend.
CHANNELS SHOPPED IN THE LAST 3 MONTHS
Total
Base: Total Women
2008
2010
(1337)
(1532)
%
%
Mass Merchandiser
83
74
Supermarket (Net)
76
71
Drug Store
64
67
Dollar Store
54
51
Department Store
54
47
Internet (Net)
34
47
Warehouse Club
40
42
Home Improvement Store
49
42
Discount Clothing Store
24
25
Enclosed Mall
39
32
Specialty Stores (Net)
76
73
Office Supplies
28
24
Pet Supplies
25
24
Beauty Care
24
23
Clothing Store
23
22
Liquor/Wine
18
22
Books
26
22
Home Furnishings
24
19
Electronics
19
17
Greeting Cards
20
17
Food
n/a
14
Toys
15
14
Vintage, Used or Pre-Owned Products
8
9
Vitamins And Nutritional Products
10
7
Average # Of Outlet Shopped
8.6
8.2
How America Shops® 2010 MegaTrends Study
The Odyssey Begins to the New Retail World
Executive Summary
© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher
COPYRIGHT 2010
17
White spaces:
Mass Merchandisers (particularly Walmart) are challenged on many fronts in
the New Retail World.
Mass Merchandisers may be shopped by the most women (even the most affluent) but they are down 9ppts vs. 2008, and two channels will continue to siphon
off Walmart’s core shoppers in this New Retail World . . .
• Almost 70% of Walmart’s core shoppers, those with HHI under $40k, are in the
Dollar Channel in 3 months; 1/4 are there every week, which is up vs. 2008.
• A channel we added for the first time this year, Deep Discount Grocery
stores like Aldi and Sav-a-Lot, attracts 15% of lower income households in
three months -- and that’s with limited distribution. As these chains expand
Walmart is further threatened.
Online is also a threat that Walmart executives are right to lose sleep over this.
• What to watch about Online shopping is where shoppers are going. Bricks
and clicks retailers like Walmart, Target, Macy’s, JC Penney’s, Costco and the
Drug chains have 7% or fewer of their shoppers buying from their Online sites
on a 3-months basis.
• In the same 3 month time period, 57% of Online shoppers have shopped
amazon.com.
SPENDING CUTS FOR MOST “LEADING INDICATOR CATEGORIES”
TELL THE PAINFUL STORY OF THE RECESSION
-- and reveal what’s worth it (or not) in the New Retail World
For the past two decades, How America Shops® has determined that certain
product categories are predictive Leading Indicators of what’s important to shoppers – what they will spend on and what has hit their frugal nerve.
Many Leading Indicator Categories have been tracked since 1989, including
Beauty Care, Clothing, Fashion Accessories, Food, Greeting Cards, Home Decorating, Over-the-Counter Medications. Other categories have been added to the
survey over the years to reflect social and economic trends, such as, Computers,
Electronics, Home Furnishings, Pet Supplies and Wine & Liquor.
This year we added categories that will help us monitor shoppers’ commitment
to health and wellness, specifically, Fresh Produce and Take-out Food. We also
added Eating in Restaurants, which has been one of the hardest hit categories
in the recession, and will be a Leading Indicator of when shoppers feel they can
break out and spend more.
18
COPYRIGHT 2010
How America Shops® 2010 MegaTrends Study
The Odyssey Begins to the New Retail World
Executive Summary
© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher
In the 1990s, most of the Leading Indicator Categories were showing net gains in
spending (that is the difference between the percent of shoppers spending more
and those spending less.) Since 2006, there have been mostly net losses with
increases only in essentials like Food.
This 2010 study shows accelerating declines as the recession tightened its grip.
Many categories that held steady in 2008 are showing large-scale cuts in 2010.
Those that were being cut in 2008 have been cut even more severely in 2010.
What’s Up Reveals a New Healthier Mindset
- Physical and Emotional (Pets again)
• Fresh Produce takes the lead at +19ppts net gain between those spending
more vs. less, which sounds like a win for healthier eating.
• Food in general is +4ppts. When we asked shoppers why their spending on
Food is up, 47% say it is because of rising prices, and another 19% are using
more since they are eating out less.
• Vitamins, at +4ppts, is another win for wellness, as women buy more to stave
off trips to the doctor and medications they can’t afford.
• Pet Supplies, a consistent winner, is +9ppts, a more modest gain than the
double-digit net growth of prior studies, but still an ongoing reflection of the
emotional importance of this category to American families.
What’s Down Reflects the Depth of the Recession
Literally every other Leading Indicator Category is down, and down deep, a pervasive, if not unexpected, theme in 2010. (Remember, it’s an Odyssey.)
The biggest cuts were made in categories that helped drive retail growth over the
last years.
• At the top of the list: Fashion Accessories (-46ppts), Clothing (-39ppts), Home
Furnishings (-39ppts), Restaurant Meals (-39ppts), Electronics (-38ppts),
Computers (-36ppts), Fragrance (-36ppts) and Take-Out Food (-35ppts).
• Less impacted (although it’s only relative) are: Cosmetics (-28ppts), Greeting
Cards (-20ppts), Skin Care (-18ppts), Wine & Liquor (-17ppts), Hair Care
(-16ppts) and OTC Medications (-8ppts).
Seven of these categories (Hair Care, OTC, Clothes, Liquor/Wine, Greeting Cards
and Cosmetics) were holding steady in 2008. Not any more. Nothing was immune to cutbacks, trade downs, brand switching, or just plain not buying at all.
How America Shops® 2010 MegaTrends Study
The Odyssey Begins to the New Retail World
Executive Summary
© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher
COPYRIGHT 2010
19
Demographics show very few differences. The most affluent women have not
scaled back their spending as much as the least affluent in Cosmetics (-12ppts vs.
-27ppts), Skin Care (-3ppts vs. -21ppts) and Vitamins (+9ppts vs. -4ppts). But that’s
all.
All in all, no category was sacrosanct.
WHERE LEADING INDICATOR CATEGORIES ARE PURCHASED “MOST OFTEN”
Reveal White Spaces emerging
How America Shops® asks shoppers where they shop “most often” for each of
the Leading Indicator Categories. For the most part, the top 3 retail channels for
each product category in 2010 are the same top 3 channels we reported in 2008.
However, there are several trends that reveal both the impact of the recession
and the new shopper mindset.
• While the growth in Internet shopping hasn’t propelled the Internet to the
“most often” shopped channel in any category, Online shopping in many
categories has grown dramatically. Online has narrowed the gap between
Specialty Stores and the Internet for Computers, and continues as a solid #3
for Electronics. In eight of the categories, at least 20% of women shop online
regularly for categories such as Cosmetics, Skin Care, Fashion Accessories
and Home Décor.
• Department Stores still hold their position as the #1 place to shop for fashion
but have lost ranking for Cosmetics and Skin Care. In Cosmetics they now
rank #3 after Mass Merchandisers and Drug Stores (they were #2); in Skin
Care #4 after Mass Merchandisers, Drug Stores and Specialty Beauty Stores,
(they were #3).
• Specialty Stores are losing position to cheaper channel alternatives like Mass
Merchants in Computers and Pet Supplies thanks to a combination of lower
prices and – in the case of Computers – an improved brand offering by Mass
Merchants in the category.
DIFFERENCES THAT MATTER Less - Demographics
At this point in this Executive Summary we would usually include the key findings
that differentiate male shoppers, and African-American and Hispanic women.
The big finding in 2010 is that there are very few differences to report; the news is
in the similarities.
Men
Historically men are usually more optimistic than women and male attitudes in
2010 have not been as deeply impacted by the Great Recession as were those
20
COPYRIGHT 2010
How America Shops® 2010 MegaTrends Study
The Odyssey Begins to the New Retail World
Executive Summary
© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher
among the fairer sex -- but we are really splitting hairs. Here are a few examples:
• The number of men who say it’s “it’s important to get the lowest prices
on most things I buy” is up 3ppts over 2008, to 62%. Among women that
statement gets agreement from 70%, up 6ppts since ’08. A difference, but not
by much.
• You might think fear wouldn’t affect men as deeply as women given their
greater optimism, and you’d be right - to an extent. 38% of men say they’re
“cutting spending because the future is uncertain” – something that affects
47% of all women.
• However, the number of men who really got into real trouble during the
recession is identical to women: 32% of men “constantly worry about the
amount of debt I have,” same as women.
• Where we do see that wonderful male optimism is in the 70% of men who
believe the recession is over or will be over within a couple of years at most
compared, to 57% of women. (Thank heavens for that difference.)
• However, while men may be more optimistic about the future than women,
they’re responding to the recession by making similar drastic cuts across all
categories, the same as women.
African-American & Hispanic Women
The attitudes of African-American and Hispanic women are similar to Caucasian
women. Where there are differences they are more related to income than ethnic
attitudes.
• Women of all backgrounds are equally price conscious, and similar
proportions among each ethnic group say they’re more likely to sacrifice their
usual brand for a lower-priced alternative if it means they can save money
(49-52%).
• However, significantly more African-American women believe that “trusted
name brands are worth paying more for,” 54%, vs. 28%-31% of Caucasian and
Hispanic women.
• More African-American women worry that “I got into so much debt that once
I pay down my bills I will never do that again” --- 40% vs. 20% of Caucasians
and 29% of Hispanics.
• However, African American women are more optimistic about their recovery
from the recession – 59% believe their situation will improve by the end of
2010 vs. 35% of Caucasian and 45% of Hispanic women.
How America Shops® 2010 MegaTrends Study
The Odyssey Begins to the New Retail World
Executive Summary
© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher
COPYRIGHT 2010
21
Shopper
Personalities
Now that demographics matter so little, you will need a more holistic, 360° view
of shopper personalities in order to succeed. Here are the critical personality
dimensions that frame the shopper mindset moving forward.
• Living within your means. People who always live within their means came
through the recession with fewer scars than people who live large and with
debt. It doesn’t matter if they earned $50k or $100k, it was the degree to
which they “lived within their means” mindset that determined how they
experienced the recession.
• The shopping gene. Some people shop a lot because it is in their blood -- they
love it; others shop a lot because hunting for bargains is the only way they can
get by – bargain hunting is in their blood. Regardless, they love to shop, and
do it a lot.
Other people do not like to shop. They are in stores and do buy, but they can’t be
bothered to shop “smart” – it takes too much shopping to find the lowest prices
or switch brands. They love the Internet because it helps them avoid stores.
Whether they are affluent or not doesn’t matter, they missed the shopping gene.
5 Shoppers you will encounter on your Odyssey To the New Retail World
CHIC CHIC CHARLOTTE (17%)
MISERABLE MONA (18%)
Spared by the recession. A
devoted (affluent) shopper,
but with a new reserve
about excess consumption.
Hurt by the recession, always
struggles, but that’s her lot in life.
Why shop if you can’t buy?
17% 18%
BUBBLE BARBIE (24%)
Hurt by the
recession, not much
money, but a girl’s
just got to shop.
24%
21%
20%
SHOP-A-LOT SUE (21%)
Hurt by the recession,
but determined to shop
smarter to get what she
wants.
CHARLES
MORRIS
13% 17%
I’LL PASS PATTY (20%)
Never joined the
shopping culture so the
recession doesn’t hurt
much. Why would
anyone want to shop?
BOB
31%
19%
STU
21%
PETE
WOMEN
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COPYRIGHT 2010
MEN
How America Shops® 2010 MegaTrends Study
The Odyssey Begins to the New Retail World
Executive Summary
© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher
To define the SHOPPER PERSONALTIES, we segmented women and men based
on their responses to a series of questions and attributes, for example, How long
will your personal recession last? Do you agree that you always spend within
your means? Does spending on a well-known brand make you feel good? Do you
go online looking for discounts before you shop?
We confirmed how little gender and ethnic background influence a shopping
personality. While the How America Shops® sample ranged from 18 to 70, the
average age of each personality falls between 40 and 48. Household size is similar, and 60% to 70% of each segment is employed. The mean household income
range is broader, $60k to $101k, and while fear and worry about debt correlate to
income, shopping behavior correlates less so.
The 3,000 ft. overview of the SHOPPER PERSONALTIES looks like this.
Meet Shop-a-Lot Sue (21%) and Miserable Mona (18%). If you only focused on
demographics you would see them as the same people: they have the lowest
mean income of the segments at $60k and the least education (high school/some
college.) They are both the Walmart core shopper, however, their reactions to
the recession and to shopping are very, very different. When it comes to handling
their debt, dedication to being a smart shopper, and their attitudes about life and
shopping, these two are polar opposites.
Shop-a-Lot Sue loves, loves, loves shopping – and is darn good at it, too. She and
her mate (Shop-a-Lot Stu) see their low income as a challenge, not a deal breaker. Sue knows she doesn’t have much to spend, so she shops smart, which let’s
her buy more. She’s Online more than most, and is often in the Mass Merchandisers (Walmart), Dollar, and Deep Discount stores. She’s given up her aspirations
for big name brands and is okay with less. She’s not so worried about debt; she
will figure out a way to stay ahead of it.
Miserable Mona, on the other hand, is so jaded by her financial situation that
she finds no pleasure in shopping --- why would you want to shop if you can’t
buy anything? She either can’t be bothered or can’t figure out how to be a smart
shopper – even when it would save her money. Making ends meet is a constant
struggle. Miserable Mona (and Miserable Morris) headed into the recession
with debt, and dread sinking deeper. She wavers between staying out of stores
so she won’t overspend or just accepting her fate as debt-ridden and deprived.
Either way she doesn’t like to shop and she shops least of all the personalities.
Miserable Mona is also a Walmart, Dollar and Deep Discount shopper, but she
doesn’t see Online as a tool to help her.
I’ll Pass Patty didn’t get the shopping gene. She is apathetic about shopping, it is
a means to an end. She has above average income at $90k and she (and her male
counterpart Pete) live within their means so they were not terribly affected by the
recession. To her, smart shopping is no shopping. Low price is important, but not
if it means having to shop around. No surprise, more I’ll Pass Pattys shop Online
in order to avoid brick and mortar stores.
How America Shops® 2010 MegaTrends Study
The Odyssey Begins to the New Retail World
Executive Summary
© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher
COPYRIGHT 2010
23
Bubble Barbie has lived the recession in a bubble, trying to ignore it all and
continue to shop, which is what she loves to do. Her income ($72k) is right in
the middle, and the recession has been hard on her, leaving her worried about
debt. Although she should be, she is not a smart shopper. She’s in denial about
the ‘need’ to clip coupons or shop online for better deals. She’s still browsing her
stores and wanting all her “stuff.” Retailers love to see her come into their store –
and she doesn’t disappoint, she’s there often. Her male companion (Bubble Bob)
doesn’t love to shop quite as much, but he doesn’t spend within his means and is
worried about debt. He continues to shop as he always did because it makes him
feel good.
Chic Chic Charlotte (along with Charles) has been sheltered by a higher income
(mean $101k). She loves to shop and does so more than any of the other segments, making the most trips to the most stores. Shopping smart isn’t high on her
list because she feels she doesn’t really need to be so concerned about saving
a few dollars. Though she doesn’t have to worry about debt that doesn’t mean
she’s been unaffected by the recession. She has re-thought her spending and
decided she doesn’t need all the stuff anymore. She’ll shop, but will buy less.
Her new shopping mindset will be the undoing of department stores.
How to Use the Shopper Personalities
Often success is about who you know, which is why we knew you would want to
meet these women – and men. Now that you have met them, here’s what to do
with them.
1.Know which personalities are in your franchise. There is a strong case here
for looking beyond age and income, and even gender, to know your shopper.
2.Note the similarities. The Great Recession has made each of the five price
conscious and coupon happy. Promoting price may have been déclassé in
better times for some upscale categories, but it is now simply smart shopping.
Upscale brands may benefit from a more subtle approach to price than mass
market commodities, but Chic Chic Charlotte responds to the same message
as Shop-a-Lot Sue -- an opportunity to save money.
3.Value stores, from Walmart to Dollar General have two different shopper
personalities walking through their doors – downtrodden, Miserable Mona
and can-do Shop-a-Lot Sue. Take the risk of marketing to the more upbeat
Sue, with attractive stores and the aspirational merchandise she’s looking for.
Even Walmart has discovered that stores don’t have to be dark and cluttered
to reassure shoppers that you have lowest prices. There’s nothing wrong with
adding a little Miley Cyrus cachet to everyday low price.
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COPYRIGHT 2010
How America Shops® 2010 MegaTrends Study
The Odyssey Begins to the New Retail World
Executive Summary
© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher
4.Bargain shoppers like Shop-a-Lot Sue want coupons, sales and promotion
codes. As a bargain hunter she will return again and again to the places that
reward her hunt. Make her day, and let her find the bargains on your store or
site and you will be “bookmarked.”
5.Bubble Barbie is the best reason to keep doing attractive displays of new
products that stop her in the aisle and add more to her basket. She is
wandering the Malls, the Mass Merchandisers and Drug Stores looking for
affordable things to add to her collection. Sales and discounts are good,
but not necessary for her to buy. Fortunately, she is the largest personality
segment (24%), and if you have her you are fortunate.
6.The more affluent (Chic Chic Charlotte) have developed a case of retail guilt.
Many stores and brands want her because of her affluence, but she is not
as spend-thrift as she was in the ‘90s. She doesn’t want to have to go online
to find a sale, but she will if she must. Better to reassure her that you are
offering her value, which is the only way to get her to spend to the max.
The Odyssey Begins - Action steps for you
The emerging retail world may look familiar but it is not. We’re about to embark
on a journey into the retail unknown. An odyssey of almost mythic Greek proportions. Where shoppers are totally in control. Where purchase decisions begin
at a different point. Where “bricks” and “clicks” merge seamlessly with mobile.
Where “clicks” define the road ahead. New white spaces are emerging upon
which we can/will/must write a new shopping history. The journey begins now.
White Spaces of
Opportunity
The Less is More World. “Less is more” has dramatic implications for retailing at
large and you need to find your balance here. Less is more raises a fundamental
question: Must companies tamp down their expectations to match the shoppers’
new expectations? Must we shrink our businesses, reduce store size, cut back
the number of stores, our inventory, our SKUs, new product introductions, price
points? Yes and no.
Y es…it’s critical to rethink the practices of opening stores willy-nilly, introducing
new products (without innovating), increasing prices (without adding inherent
value).
o… it’s less about tamping down expectations and more about redefining them
N
to meet the expectations of shoppers who now demand more – much more – if
you want them to spend beyond the basics, to trade up and immerse themselves
in new shopping experiences.
Be Bold or Fail. Tweaking, line extending, and launching me-too items will be a
losing strategy on two counts. First, retailers are taking marginally different products off the shelf, not adding them, and second, shoppers are over “new” and
premium price unless it is really new and has real added values.
How America Shops® 2010 MegaTrends Study
The Odyssey Begins to the New Retail World
Executive Summary
© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher
COPYRIGHT 2010
25
Restore Value - Romance the Brand. While shoppers are focused on being practical and thrifty, they will, at the same time, spend big on products that they feel
are sensational --- UGGS, Kindle, iAnything (Pods, Phones, Touch). It’s all about
polishing the brand image, not taking it for granted. Without the brand image,
trading down will win.
Innovate Discounting. Lower-priced options, private label, better value sizes,
coupons, price-checking -- anything that helps shoppers manage their weekly
spending more effectively will remain on their list. Anything premium priced, even
if only a little – product, service or retailer – will lose shoppers unless its value is
clearly stated, and seen as worth the price. Fill the white space with meaningful
rewards.
Be Mobile. This easier access to the Internet will make cyberspace about so
much more than buying. It will play a larger role as the place where people go to
find coupons, promotions, lowest price, information they trust – all at their fingertips. Mobile technology is fast enhancing the shopping experience, customizing
it intimately in ways many have yet to understand, forcing traditional retailers to
rethink how they communicate, connect and sell everyday.
Re-think the Website -- Again. The physical store will be transformed in this new
white space. That’s not to say there will be no more bricks and mortar. But a
retailer’s website cannot be an add-on. It will become (as many already are) the
#1 store, the most profitable store, and in many cases the flagship store, while the
physical store will become the showcase for testing, trial, experience -- the secondary space. As a result, how brands are distributed is being transformed right
now. Think about the revolution in the music and the book industry as a guide to
this new retail world. (Where’s the store? Why the store? Why is it worth it?)
Be a Safe Place. While fear and uncertainty remain, retailers and manufacturers need to make all shoppers feel safe, assure them that the brands, services
and experiences offered will help them on the road to recovery. Reward them for
smart shopping behavior. Build their trust for the long term.
Shopper Personalities. The shopper personalities all walk through the same retail stores, but see the experience differently and buy differently. The opportunity
then is to create holistic retail experiences and connections that provide the joy,
the emotional reward but without the guilt. It gets back to restating value. It’s not
about just another place to shop, another thing to buy, it’s about why this place,
why this thing. Why it’s worth it.
26
COPYRIGHT 2010
How America Shops® 2010 MegaTrends Study
The Odyssey Begins to the New Retail World
Executive Summary
© WSL Marketing Inc. 2010. No Part Of This Document May Be Reproduced Without Written Permission From The Publisher
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