The Checkout 2.10 - 2009 Holiday Spending

the

inside the in-store experience

powered by The Integer Group® and M/A/R/C® Research2.10issue

in focus: 2009 Holiday ShoppingThis month we asked shoppers about their holiday shopping plans this season. Do they expect to spend more, less, or the same compared to last year? Which retail channels will be most affected?

2009 Year in Review • Recession or not, shoppers are slowly coming back. • The time-versus-money dichotomy continues. What does that mean for your shoppers?• Quick fill-in trips help ease pressure on household cash flow.• Spenders are using more convenience-based shopping aids and in-store advertising.• SKU rationalization: Is it working? Why some shoppers are walking away.• Mobile shopping shows upward mobility.

In focus: Holiday Spending• Recessionary pressures have made us a nation of shopping procrastinators.• The game of chicken between shoppers looking for deals and retailers seeking sales intensifies.• 2009 Holiday shoppers wanted instant gratification, free shipping, and free stuff.

IN THIS ISSUE


2page

Coupons and free shipping high on shoppers’ wish lists

“Have you taken advantage of any of the following holiday gift specials or sales?”

Holiday Specials & Shopping Tactics

? =

After a lackluster fourth-quarter holiday-shopping season, store coupons and free-shipping offers might have been some of the best tools retailers used to salvage their 2009 sales figures. In the wake of the worst economic crisis in decades, these two incentives top the list of gift specials or sales shoppers used most. In fact, nearly half of those surveyed indicated they took advantage of store coupons (46%) or free online shipping incentives (45%) when they shopped for gifts in 2009. Instant gratification reigns; shoppers were most attracted to promotions that offered the most immediate forms of reward in terms of cash back, free shipping, or free merchandise. The fewer hoops you make shoppers jump through, the more likely they are to participate in your promotion.

46

45

37

31

28

28

26

23

21

17

16

Newspaper/store flyers and coupons

Free shipping for online orders

Buy one/get one half-price offers

Instant rebates

An online offer that was e-mailed to you

Special loyalty or appreciation rewards

An in-store offer that was e-mailed to you

Black Friday deals

Mail-in rebates

Early-bird door-buster specials

Daily specials on a store's Web site

16

15

13

13

12

7

3

2

1

2

15

Special gift card savings (in-store)

Friends and family discounts

Competitor price-matching offers

Last-minute deals

Special gift card savings (online)

Additional savings from store credit card offer

Offers delivered by social networks

Refer-a-friend programs

Offers delivered bymobile/smart phone apps

Other

None of the above

In-store

Out-of-store


3page

2

“When do you do most of your in-store and online shopping?”

The Holiday-Shopping Time Line

? =

Holiday shopping holdouts

Despite the abundance of early shopping events like Black Friday and Cyber Monday, most shoppers reported waiting until December before doing the bulk of their holiday shopping. Shoppers indicated that they intended to do most of their shopping, both online and in-store, in the two weeks prior to December 25 rather than during the traditional retail spikes of Black Friday and Cyber Monday. Consistent with our findings on late-season holiday shopping and retail promotions, many shoppers planned to wait until Green Monday (the last day to take advantage of free-shipping offers).

in-storeonline

2

in-storeonline

0

10

20

30

40

50

60

24

-No

v

25

-No

v

26

-No

v

27

-No

v

28

-No

v

29

-No

v

30

-No

v

1-D

ec

2-D

ec

3-D

ec

4-D

ec

5-D

ec

6-D

ec

7-D

ec

8-D

ec

9-D

ec

10

-De

c

11

-De

c

12

-De

c

13

-De

c

14

-De

c

15

-De

c

16

-De

c

17

-De

c

18

-De

c

19

-De

c

20

-De

c

21

-De

c

22

-De

c

23

-De

c

24

-De

c

25

-De

c

(%)

Cyber M

onday

Black

Friday

Thanksgiv

ing

Gre

en M

onda

y


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“In the past three months, how has your shopping behavior changed?”

Frugal buying declined throughout 2009

? =

Shopping Behavior Compared to Three Months Ago

While frugal buying dominated much of 2009’s shopping expenditures, the trend lessened as the year continued. And while men were more inclined to open their wallets over the course of the year, females too showed a similar pattern of gradually loosening the purse strings. The question is whether or not this trend will continue through 2010.

1Q’09

2Q’09

3Q’09

1Q’09

2Q’09

3Q’09

1Q’09

2Q’09

3Q’09

61

54

56

56

51

52

66 34 1

56 42 2

60 38 3

46 3

47 3

4Q’09 46 51 3

43 3

42 3

44 3

4Q’09 53 44 3

37 2

4Q’09 59 37 4

Indicates significant difference from previous quarter at 95% confidence level

Buying fewer/cheaper items

Buying more/moreexpensive items

(%)Total

Males

Females

* *

*

*

*

*

*

*

*

*

Indicates significant difference between males/females at 95% confidence level

no change


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“When thinking about your everyday shopping needs (food, cleaning products, etc.), what would you say is the primary goal you are trying to meet from each trip you take?”? =

Everyday Shopping Goals

2009 shopping trips price- and convenience-driven

In 2009, we saw shoppers take on a more utilitarian view of shopping – looking to get in, find what they need, and get out without overspending and without having very much fun. Shoppers are realizing that they might have to change their shopping behaviors to adjust for continuing recessionary conditions. Instead of getting everything at once, they are increasingly using more quick fill-in trips to avoid larger grocery receipts and impact on the family budget.

However, while both price and convenience have consistently dominated shoppers’ priorities the entire year, both factors seem to be trending downward heading into 2010, possibly indicating that the period of retrenchment for many shoppers could be easing, and a refocus on quality and experience might soon return.

29

28

8

12

8

7

6

1

29

23

10

12

11

8

7

2

26

26

11

12

11

7

6

2

26

24

11

14

11

7

5

2

Get everything in single trip,saving the need for more trips

To spend as little as possible

Quick fill-in trips to replacethe things I use as I go

A comprehensive restockingof the items I have used

To satisfy the needs of all myfamily members

To find the freshest andbest quality items

Spend as little time inthe store as possible

Be entertained andhave a fun time

(%)Q1

Q2

Q3

Q4

Indicates significant difference from previous quarter

at 95% confidence level


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Shopping Aids

“Thinking about your most recent shopping trip for groceries, which of the following did you use in the store to help you shop?”? =

Spenders utilize more experience- andconvenience-based shopping aids

Since the start of the year, shoppers appear to rely more on coupons, from both manufacturers and retailers, to help them shop for groceries. While coupon use has been increasing, other forms of traditional shopping aids, such as directional signage and in-store associates, have been steadily decreasing.

However, when viewing the shopping-aid preferences of Spenders (those who report shopping more) alongside Savers (those shopping less), stark differences in recessionary coping strategies appear. The Savers segment shows higher price sensitivity and corresponding shopping strategy using circulars and coupons, from both manufacturers and retailers, significantly more than their Spender counterparts, who are using more convenience-based shopping aids such as directional signage, in-store associates, self-checkout, and mobile phones.

6

18

10

27

37

38

49

29

36

45

12

18

21

22

24

33

38

40

43

44

0 10 20 30 40 50 60

Mobile phone

Message on shelf

In-store associate

Circular - in-store

Circular - newspaper

Coupons - store

Coupon - manufacturer

Self-checkout

Directional signage

Shopper discount card

(%)Spenders (People shopping more)

Savers (People shopping less)

Indicates significant difference from previous quarter at 95% confidence level

*

*

*

*

*

*

*


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Time is greater than money

“Currently, where do you believe you fall between each of the following?”? =

Shopper Values

Throughout 2009, shoppers notably chose price as their primary purchase consideration. However, with bargain hunting at its lowest point of the year, customers appear willing to spend more money if it saves them time. Both of these changes represent significant differences from shoppers’ sentiments earlier in the year. In the short term, more shoppers were willing to chase deals, but as the recession lengthens, fewer are willing to put in the extra time and effort.

seek out lowest possible price

save money by shopping around

save today,buy tomorrow

stick with familiar brands or items

buy individual-sized items

seek out American-made

spend more but save time

buy now on credit

switch brands or try new brands

more often

buy in bulk

Q1’09

Q2’09

Q3’09

Q1’09

Q2’09

Q3’09

Q1’09

Q2’09

Q3’09

Q1’09

Q2’09

Q3’09

Q1’09

Q2’09

Q3’09

Q3’09

describes more

41

37

39

35

31

30

35 41 19 6

32 44 19 6

33 42 18 6

22 44 26 8

22 47 25 6

22 47 25 6

14 34 37 15

14 36 38 13

13 37 37 13

43 21 5

45 19 5

Q4’09 29 44 22 5

42 19 5

40 16 5

41 17 5

Q4’09 37 41 17 5

39 15 6

buy private-label/store brands

buy national/name brands

15 46 32 7

Q4’09 16 45 31 8

Q4’09 14 35 39 12

Q4’09 22 47 25 6

Q4’09 33 42 19 6

Indicates significant difference from previous month at 95% confidence level.

(%)


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Spenders are walking away empty-handedbecause they can’t find what they want

“Thinking about your retail shopping in general, in the past three months, have you gone to a store to purchase a specific item but did not make a purchase? If so, what was the MAIN reason why you walked away from the aisle without making a purchase?”? =

MAIN Reason for Walking Away – Spenders Vs. Savers

The biggest turnoffs for shoppers continue to be high prices and limited store selection, although shoppers do appear to be less sensitive to price than they were earlier in the year. Spenders also seem less likely to list situational factors like cleanliness and store organization and layout as primary deterrents from making a purchase. Not surprisingly, Savers reported price as the main factor for not making a purchase, while Spenders couldn’t find the exact product they were seeking.

1

3

4

9

48

32

2

3

6

8

36

37

0 10 20 30 40 50 60

The store was dirty

The aisle was confusing/disorganized

The aisle was crowded

I couldn't find the brand thatI was looking for

The price was more than I wanted to pay

I couldn't find the exact item, product,or size I was looking for




9page

Spenders are having fun again in the store and online

“Which of the following best describes how you feel about shopping?”? =

Feelings About Shopping – Spenders Vs. Savers

Consumers as a whole, seem to enjoy shopping less, with more shoppers indicating that they do not think that everyday shopping is relaxing and fun. Spenders who want to be entertained and have fun go to the stores to explore and relax, but along with that, they also end up buying things they didn’t plan to purchase. Online shoppers tend to be planners and explorers who do preshopping research, prepare a shopping list, and shop primarily by price once a product is chosen. Online shoppers also report that they are more likely to not make a purchase if they do not find the exact item for the price they wanted to pay.

The adventurous Spenders are more likely to explore the store environment and view shopping as a relaxing and fun activity – and thus more susceptible to make impulse purchases (43%). Their shopping preferences also continue to reiterate their focus on convenience with more than a third (34%) saying they are willing to pay more to make their lives easier and expressing deep affinity for online shopping.

Conversely, Savers are not having fun in the store and focus on discipline and price, being sure to use shopping lists and coupons and refraining from browsing.

11

11

39

29

17

37

25

30

40

23

23

34

34

34

35

43

47

0 10 20 30 40 50

Brand names are extremelyimportant to me

Shopping is fun

I seek out couponsfor everything

Online shopping is thebest use of technology

I will pay more if mylife is made easier

I always prepare a list

Shopping is how I relax

I often buy things thatI did not plan to buy

I like to explore the store




10page

Coupon usage climbs

“Which of the following are new behaviors you have started in the past three months when you’re shopping?”? =

New Shopping Behaviors

Coupon usage grows, and grows, and grows. Recessionary pressures have reshaped the shopper mind-set and have significantly altered the way they prioritize their time, shopping trips, retailers, and more importantly - their money. As seen in prior sections of this report, coupons and circulars are beginning to play a much larger role in shoppers’ money-saving arsenal. Savers are taking it one step further, and have reduced the amount of time and money they spend on the Internet. Spenders, who are spending more and more often, are increasingly using the Internet to compare prices and make purchases, both via a computer and their mobile phones.

45

42

42

31

32

18

9

4

21

43

41

38

30

30

15

9

4

20

47

42

38

31

27

14

9

4

18

Have started/am using more store or manufacturer coupons

Have started/am using store circulars more often to find deals

Reading packaging or signage more to find better deals

Have started/am using Internet coupons more often

Have started/am using Internet more to compare prices

Have started/am using store Web sites more often to make purchases

Driving farther to save money on purchases

Using cell phone to help me shop

None of these

(%)Q2

Q3

Q4




11page

“Thinking again about your everyday shopping needs, what are the top three important criteria for your choice of store?”? =

One-stop shops are tops

Store-Selection Criteria

When selecting stores, consumers prefer to shop at retailers that allow them to get all of their shopping done in one place. In addition to selection, everyday low pricing and the price/quality mix rounded out the top three most important criteria for shoppers.

Spenders are concerned with retailers’ breadth and quality of products and feel that the store environment is a direct reflection of who they are as people. Unsurprisingly, Savers choose their retailer primarily by price considerations, buying less and seeking the lowest prices.

3

8

6

13

12

44

37

39

10

11

14

17

21

26

38

44

0 10 20 30 40 50

Has a shopping environmentthat reflects who I am

Fantastic customer service

Carry high-quality brands

Is a store brand I trust

Accepts my bank or credit cards

Offers lowest prices

Close by

Carries everything I need




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Retailers and value perceptions go hand-in-hand

“Still thinking about value, please list all brands that communicate value to you.”? =Brands That Communicate Value

When asked which brands best communicate value to them, most consumers think of major retailers like Walmart and Target. Walmart continues to be the most popular value brand, with 14% of shoppers listing the retailer. Retailers are increasingly expected to be seen as value brands. But others like Apple, Sony, and Kellogg's — which are generally not the lowest price products — are communicating value through the quality and familiarity of their brands.

18

10

9

4

4

4

5

5

5

5

4

4

14

10

8

6

6

6

5

5

5

5

5

5Italics indicate previous month’s ranking.

(%)

clothing/shoes

cosmetics/toiletries

cars/accessories/

parts

food/beverage/

brandselectronics stores

(2)

(1)

(na)

(2) (2)

(1)

(1) (2)

(1)

(na)

(2)

(1)

(2) (na)

(3)

(3)

(na)

(na)

Levi’s

Nike

Lee

Johnson &Johnson

Colgate

Crest

Toyota

Honda

Ford

Sony

Apple

Dell

Kraft

Kellogg’s

Campbell’s

Walmart

Target

Costco

AUG

NOV




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29

33

10

28

19

25

22

18

41

39

-27

-20

-29

-28

-35

-34

-6

-55

-54

Difficulty getting to store

Quality store chain

Advertisements/special promotions

Other

Customer service

Safety

Store appearance

Parking

None of these, don't care

Product selection

Fresh or quality food selection

Reasons to Avoid Reasons to Seek Out

C-Store fear factors – freshness, quality, selection

“Please select the top three factors that would cause you to avoid visiting a specific convenience store location?”“Please select the top three factors that would cause you to seek out a specific convenience store location?”? =

Reasons to Seek-out or Avoid a Specific C-Store Location

In general, most shoppers place heightened importance on issues regarding food quality and product variety/selection when choosing convenience stores. Along gender lines, women are more concerned about safety and quality food options, whereas men are more likely to say they don’t care as long as the store is convenient and trustworthy. Furthermore, male shoppers will avoid a c-store because of poor staff quality, limited selection, or long lines. Younger shoppers (18–24 years of age) differentiate convenience stores by the exterior appearance, sense of personal security, and selection of healthy food options. Because a convenience store is supposed to be, by definition, convenient, this same younger shopper will avoid a c-store because of a confusing layout or difficulty getting to the store.

Above other factors, convenience-store shoppers primarily look at product selection and food quality when selecting between different retailers and store locations. Higher income ($75K+) shoppers are more sensitive to parking and product selection than lower-income groups.

Female shoppers are increasingly becoming a more important segment for the c-store channel and are attracted when stores offer a sense of security; clean store environment; fresh, high-quality food; and special promotions.

DEC (%)


14page

The Integer Group® (www.integer.com) is one of America’s largest promotional and retail marketing agencies and a key member of the TBWA\Marketing Services portfolio. The Integer Group resides At the Intersection of Branding and Selling® and creates strategic marketing solutions for clients in categories that include beverage, packaged goods, telecommunications, fast food, home and shelter, and power sports. Join Integer® in a conversation on shoppingculture and brand strategy at:

M/A/R/C® Research is a brand development firm dedicated to helping clients create, evaluate, and strengthen their brands. Our teams design and execute qualitative and quantitative, traditional and online solutions while adhering to a client-service ethic built on being easy to work with and delivering what is promised.

Our core competency is measuring attitudes and behaviors to accurately explain and predict market share, revenue, and bottom line impact of a client’s actions. We help our clients address consumer, channel, and B2B marketing issues to launch better products and services, attract and retain valuable customers, and build stronger brands. Our proven, marketing-issue focused solutions support clients’ brand building efforts.

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The Integer Group

Craig Elston

Sr. VP, Insight & Strategy

[email protected]

7245 West Alaska Drive

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tel +1.303.393.3474

contact:

M/A/R/C Research

Randy Wahl

EVP, Advanced Analytics

[email protected]

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contact:

The Checkout is based on a nationally representative survey of 1,200 U.S. adults conducted monthly by M/A/R/C Research. Please contact us to learn more about the data we collect or additional analysis.

©2010 by The Integer Group® and M/A/R/C® Research. All rights reserved.The data contained in this report may be reproduced in any form as long as the data is cited from The Integer Group and M/A/R/C Research. www.ShopperCulture.com.

The Checkout 2.10 - 2009 Holiday Spending

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Transcript of The Checkout 2.10 - 2009 Holiday Spending