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Consumer confidence rebounds heading
into spring

Shoppers aren’t showing signs of a spring
spending frenzy…practicality up slightly

Improved employment forecast

Almost 9 in 10 research online before
buying in store

How does Wal-Mart stack up regionally in
Groceries & HBC?

Featured Aisle: Personal Care & Hygiene

Purchase intentions for high-dollar
durables cool off

What’s Hot/Not?  Hitting the beach and
taking a hit out on the next 007

 

Forward Looking Economic, Retail & Spending Insights for Shopper Understanding
Providing unique Insights from BIGresearch’s Consumer Intentions & Actions study of consumers and Daniel Burrus’ trend analysis & insights.
For more information: www.ConsumerIntentions.com Ÿ 800-827-6770

March 2006 
(Respondents Surveyed 3/01 – 3/08)

Burrus Consumer Research leverages Daniel Burrus’ twenty-year record for accurately predicting the future of technology-driven change, and the vast online research capabilities of our consumer research division, to precisely predict consumers’ intentions and actions as they relate to purchasing both traditional products and emerging consumer electronics.   

 

Our comprehensive syndicated studies are designed to provide actionable intelligence that can be used to develop more effective product and marketing strategies for retailers, manufacturers, and marketing executives.

 


 

 

 

As they look forward to the end of winter, consumers see signs of a spring rebound for the state of the economy…45.1% say they are very confident/confident in chances for a strong economy, up more than half a point from last month (44.5%) and tied with last year (45.2%).

 

With the war on terror raging on in the Middle East and the Dubai/US ports issue in the news, consumers feel slightly more worried about political and national security issues compared to February…19.2% remain concerned, up a point from last month, but an improvement from last year (21.3%).

 

Although consumer confidence improves this month, shoppers aren’t showing signs of a spring spending frenzy…those who say they have become more practical in their purchases in the last six months rises to 42.7% from 42.1% in February and just a slight decline from ’05 (42.9%). 

 

Though consumers don’t appear to be putting locks on their wallets…with retailers moving the last of the winter merchandise out at bargain basement prices, fewer than half (48.9%) say they’ve been more focused on needs over wants, a decline from last month (51.3%) and last year (51.6%). 



 

Low unemployment and a brighter outlook for the economy translate into improved employment forecast in minds of consumers…those predicting “more” layoffs in the next six months lowers to 35.9% (v. 42.6% last month), those expecting the “same” rises to 52.8% (v. 46.8%), while slightly more (11.3%) say “fewer” (v. 10.5%).  Workers also less concerned with the status of their own employment…4.4% worry about becoming laid off, compared to 5.1% last month and the lowest reading since July ’05 (4.0%).

 

With holiday bills paid off (or simply adjusting to the fact of having holiday bills left to pay), consumers have relaxed financial concerns in March…although still the #1 financial plan, fewer plan to pay down debt in the next three months (40.6%, down from 43.6% in February).  Fewer also plan to increase savings (31.2%) and decrease overall spending (29.6%) compared to last month.  Slightly more keeping credit cards at bay by paying with cash more often, up to 24.8% from 24.4% last month.

 

Although the Dow continues to hover around 11,000, investor confidence in the stock market remains on par with lower levels reached in February…61.3% of investors say would definitely/probably invest this month.  Though only 11.9% plan to buy stocks in the next 3 months, down from 13.5% last month…5.5% plan to sell, also down from 6.1%.

 

Lower prices at the pump in recent weeks have fewer drivers adjusting their spending on other goods and services to accommodate their fuel purchases…33.2% in March say that pump prices are having “no major impact” on their spending (up from 29.9% in February), although a significant decline from ’05 (48.7%).  With gas prices currently on the rise, though, look for fewer to say “no impact” in coming weeks.

 

Surfing the web proves to be an important tool when it comes to finding out about potential purchases…a whopping 87.3% of consumers say they regularly or occasionally research products online before making a purchase in a store.  The most frequently searched products are Electronics (39.9%), Appliances (17.7%), Medicines/Vitamins/Supplements (17.2%), Apparel (17.1%), and Home Improvement Items (15.1%).  More than one in five (21.2%) say they hit Google.com first when researching, while 6.9% say the same for Yahoo.com…Amazon.com (5.0%), Ebay.com (3.9%), and MSN.com (2.4%) follow.

 

With TV hits like Project Runway keeping fashion in the forefront of viewers’ minds and retailers like Target and H&M lining their shelves with designer stylings, 40.0% say that familiar labels are important to them when shopping for clothing, up from 38.6% last month and 34.0% last year, and only the second time in 4 years that this figure has registered at or above 40%. 

 

And it looks as though shoppers aren’t averse to devoting more of their budgets to the style cause…in March 19.0% contend that they only buy clothing on sale, continuing a downward trend begun in ’03:




With Wal-Mart continuing to improve their fashion offerings, don’t look for the Bentonville-based powerhouse to relinquish its lead in Women’s Clothing anytime soon…17.1% say they shop here most often, compared to Kohl’s (6.4%), JC Penney (5.6%), Target (2.8%), and Macy’s (2.3%).

 

In the Men’s department, Wal-Mart also continues to lead, with almost one in five (19.5%) shopping there most often…JC Penney (7.3%), Kohl’s (5.9%), Sears (3.6%), and Target (3.4%) complete the Top 5.

 

There’s no denying it here though, Wal-Mart’s got competition when it comes to Shoes…this month in the battle for the top spot in footwear, Payless has a razor sharp edge over the big W, 14.5% share to 14.4%, respectfully.  JC Penney (3.1%) and Kohl’s (3.0%) are neck-and-neck…Kmart (2.5%) manages to claw its way back in the Top 5, and comes in just ahead of DSW (2.4%).

 

The average consumer contends he/she’s spent $115 in the last 12 months on Linens, Bedding & Draperies…so which retailer has benefited most from these expenditures?  No shock here, more than one in five (23.7%) shop Wal-Mart most often for Linens, Bedding and the like, while Bed Bath & Beyond (8.0%), JC Penney (6.9%), Target (5.6%), and Linens ‘n Things (4.8%) follow not-so-closely behind.  Consumers say they shop their preferred store most often due to price (64.4%), selection (48.7%), quality (37.2%), and location (35.6%).

 

But which Linens/Bedding retailers have fallen behind in the past year?  According to this month’s Consumer Migration Index (CMI), Wal-Mart may have some competition to contend with (eventually).   The CMI, which tracks those who have immigrated to a store (the new customers within the past year) against those who have emigrated (left within the past year) and where a positive rating spells net growth to a retailer, shows that discounters Wal-Mart and Kmart as well as JC Penney have had more customers leave in the past year than come in…Wal-Mart takes the smallest hit with a -2.0 rating, while Kmart and JC Penney end up with -7.3 and -4.8 ratings, respectively:

 



Why did these customers leave and to where did they go?  26.0% complain of high prices at their former store for Linens & Bedding, while 22.8% cited inconvenient location…poor selection (18.4%), poor customer service (11.0%), and lack of newest styles (10.4%) follow.  Among these shoppers, it’s a tie between Wal-Mart and big box Bed Bath & Beyond for the store they peruse most often (each with 14.9%), cheap chic Target (8.4%) follows, while Linens ‘n Things (6.4%) and Kohl’s (4.4%) follow.  Online retailer Overstock.com finishes just out of the Top 5 with 4.1%.

 

It should come as no surprise that Wal-Mart continues national domination in March as the store shopped most often for Groceries and Health & Beauty Care (with 16.0% and 31.3% share in each category, respectively), though how does the EDLP behemoth stack up regionally?  Folks in the Midwest and South are loyal to the big W for Groceries, while the discounter faces varied competition in HBC:

 

Groceries (1st Choice): Shop at Most Often

Northeast

Midwest

South

West

1. Shoprite 8.8%

2. Stop ‘n Shop 8.7%

3. Wal-Mart 7.1%

4. Giant 5.1%

5. Shaws 4.7%

1. Wal-Mart 14.6%

2. Kroger 9.3%

3. Meijer 9.2%

4. Aldi 3.9%

5. Jewel 3.4%

1. Wal-Mart 27.0%

2. Kroger 8.7%

3. Publix 8.2%

4. Food Lion 5.5%

5. HEB 5.4%

1. Safeway 11.8%

2. Albertsons 9.7%

3. Wal-Mart 9.5%

4. Ralphs 4.2%

5. Winco 3.5%

 

Health & Beauty Care (1st Choice): Shop at Most Often

Northeast

Midwest

South

West

1. Wal-Mart 21.0%

2. CVS 14.4%

3. Rite Aid 4.3%

4. Walgreens 3.6%

5. Eckerd 2.5%

1. Wal-Mart 31.9%

2. Walgreens 8.4%

3. Target 7.1%

4. Meijer 4.7%

5. CVS 3.7%

1. Wal-Mart 41.2%

2. Walgreens 6.4%

3. CVS 6.2%

4. Target 4.6%

5. Publix 1.8%

1. Wal-Mart 25.7%

2. Target 5.9%

3. Walgreens 5.8%

4. Rite Aid 4.2%

5. Longs Drug 3.2%



 

 

This month, we’re rolling down the Personal Care & Hygiene aisle…when it comes to the store consumers prefer to shop most often for shampoo, shaving cream and the like, it’s Wal-Mart (32.2% say so), while Target (5.1%), Walgreens (4.8%),  and CVS (4.2%) follow.  One-quarter (24.7%) cite “no preference.”  Women tend to spend a little more than men in this aisle each month, averaging $19.79 to $18.33, respectively.

 

When shopping for Personal Care products about four in five (78.1%) say they expect these products to be merchandised together in the store, yet 44.1% indicate they regularly or occasionally have trouble finding the products they want to purchase.  And the top reasons consumers have difficulty: cannot find the exact product form (27.5% say so), trouble finding the types of product needed (25.0%), difficulty finding the right brand (23.6%), and product is out of stock (23.4%).

 

Two important Personal Care products to both genders are razors and shaving cream/gel, so what drives consumers to pick up a particular brand/product?  For razors, more than two in five (43.0%) buy because it works best, followed by price (35.3%), and buy what’s on sale (27.7%).  Motivation to buy, though, can change depending on who you talk to:

 

What are the reasons why you buy a particular Razor?

Men

Women
  1. It works best 45.6%
  2. Price 31.9%
  3. Particular Brand/Name Recognition 30.6%
  4. Habit 22.0%
  5. Quality 21.0%
  1. It works best 40.6%
  2. Price 38.3%
  3. Buy what’s on sale 34.5%
  4. Particular Brand/Name Recognition 24.6%
  5. Have a coupon 18.7%

 

On the flip side, when purchasing shaving cream/gel, skin conditioners/softeners are the #1 purchase influencing factor (41.1% say so)…price (39.0%) then “it works best” (33.8%) follow.  Women, however, appear to be more driven to purchase based on conditioners and price compared to men:

 

What are the reasons why you buy a particular brand of Shaving Cream/Gel?

Men

Women
  1. It works best 37.2%
  2. Contains Skin Conditioners/Softeners 36.0%
  3. Price 34.3%
  4. Habit 30.0%
  5. Buy what’s on sale 27.4%
  1. Contains Skin Conditioners/Softeners 45.7%
  2. Price 43.3%
  3. Buy what’s on sale 35.2%
  4. It works best 30.7%
  5. Fragrance 23.6%



 

 

The 90 Day Outlook brightens for clothing and seasonal categories from February, according to the BIGresearch Diffusion Index (those who say they’ll spend less subtracted from those who’ll spend more).  However, year-over-year intended spending level continue to decline:

 

Retail Merchandise Categories - 90 Day Outlook

(March 06 compared to February 06 and March 05)

Category

February 06

March 05

Category

February 06

March 05

Children's

UP

DOWN

Toys and Games

UP

DOWN

Women's Dress

UP

DOWN

CDs/DVDs/Videos/Books

UP

DOWN

Women's Casual

UP

DOWN

Electronics

UP

DOWN

Men's Dress

FLAT

DOWN

Groceries

DOWN

DOWN

Men's Casual

UP

DOWN

Home Improvement

UP

DOWN

Shoes

UP

DOWN

Lawn & Garden

UP

DOWN

HBC

FLAT

DOWN

Home Furniture

DOWN

DOWN

Dining Out

DOWN

DOWN

Decorative Home Furnishings

DOWN

DOWN

Sporting Goods

DOWN

DOWN

Linens/Bedding/Draperies

DOWN

DOWN


Six month purchase intentions for high-dollar durables cool off as practical consumers evaluate their budgets (and perhaps expect a bill from the tax man next month)…furniture, jewelry/watch, home, auto, stereo equipment, TV, DVD/VCR, and digital camera spending intentions down from February.  Computer, home appliances flat, while seasonal purchases home improvement and vacation travel up slightly.