BIG Executive Briefing
Economic & Consumer Insights for Marketing Executives
BIG Executive Briefing
Economic
& Consumer Insights for Marketing Executives
Talking Points :
· Confidence among consumers off slightly
from
July
· Practicality among consumers
is down this
month
· Perhaps issues with job security have affected confidence this month
· Consumers less likely to defer entertainment purchases in July
· Presidential Special: Where are different supporters shopping?
· It's all about price when it comes to Shoes, also the subject of this month's Consumer Migration Index
· It's Back-to-School season...consumers look to purchase more children's clothing and shoes, according to the 90 Day Outlook
· What's hot this month? Ever tried "Googling" yourself?
ECONOMY
Bush and Kerry are in a dead heat for the presidential
election (Kerry
41.2% to Bush's 41.1%...2.3% for Nader and 14.1% still undecided - see Retail section
for supporter shopping preferences), and it doesn't look
like the race for the White House has diverted consumers' attention
from matters of political and national security. Those worrying about political/national security flat to
up slightly from July and now at 24.6%, but still below August 2003's
25.4%. Consumer confidence also off slightly...46.7% are very confident/confident v. 47.6% in
July.
Perhaps after months of cutting
back, consumers are ready to loosen the grips on their wallets?
Practicality among
consumers is down 4 points in August to 40.4%, the
lowest reading for 2004. Also an improvement from August 2003 (49.4%), but check
out August 2002 (34.7%), and you'll find that it looks
like consumers still aren't quite as willing to let loose on the
spending as they were 2 years ago.
Fewer consumers focused on needs over wants this
month...50.5% v. July's 54.0% and also down from a year ago
(58.2%). But, folks, it's still important to note that the
majority of
consumer are still more focused on the necessities.
PERSONAL/FINANCIAL
Perhaps
issues with job security have shaken confidence this
month ...consumers are slightly less optimistic with the
employment environment compared to July, but more positive than they were 1 year
ago...those who expect "more" layoffs over the next 6 months up 2 points to 28.5%
v. 26.3% in July, "same" up to 52.6% (v. 51.5%), "fewer" down to 18.9%
(v. 22.2%). Becoming laid off is still on the minds of consumers,
though...5.9% worry about losing their own job, compared to 5.0% in
July.
Looks like more will be opting
for credit over cash in the next 3 months, as fewer plan to pay down debt this month...40.6%
v. 42.2% in July and the lowest reading since June 2003 (40.8%). Fewer
also plan to allocate more money to their piggy banks this month, with
30.3% who say they'll increase savings in the next 3 months, down from July's 31.8%.
Decrease overall spending down a point while pay with cash more
often and refinance home flat with July.
Don't look for the stock market
to take off, as confidence in the market declines this month...59.7% of investors say they would definitely/probably invest
v. 61.7% in July. Investors planning to buy stocks in the next 3
months flat with July at 13.3%, while more planning to sell, 6.9% v. 6.0% last
month.
Summer blockbusters, amusement
parks and state fairs are taking over this season, as fewer consumers
put off entertainment purchases in July. Also less likely to be deferred:
home improvement projects, auto purchases, electronics and vacation
travel. Going out to eat the lone category more likely to be deferred, so
it looks like consumers are allocating their spending here to other areas.
(Be sure to check out the 90 Day Outlook, where consumers expected to cut back
dining out expenditures in coming months as well.)
It appears that consumers are accepting the reality of
high gas prices, as the
impact on spending almost the same as July when it comes
to spending on groceries and clothing as well as carpooling. Slightly fewer consumers
planning to delay major purchases, reduce dining out, and decrease vacation/travel. Fewer consumers (46.5%
v. 50.1% last month) say that fluctuating gas prices have had
no major impact.
RETAIL
How do you keep customer coming
back to your stores? Put it on sale! Consumers continue to seek bargains as 87.8% say they usually or
only buy clothing on sale and it looks like name brands are being affected, as
those who say familiar labels are important when buying clothing decline to
32.5% from 35.9% in July. WalMart, JC Penney and Kohls pack the 1-2-3
punch again this month when it comes to shopping for Women's Clothing.
Target and Kmart trail in the 4 & 5 slots, respectively.
Looks
like WalMart's "always low prices" and "BOGO" (buy one, get one 1/2 off)
specials at Payless are helping to keep the 2 stores at very top for
shoes, as Price the top reason
to shop a particular shoe store with 73.5% saying so...Selection (54.8%), Location
(38.5%), and Quality (35.6%) follow. WalMart and Payless are in a virtual deadlock this month, WalMart's
got the very slightest of edges with 17.5% share v.
Payless with 17.4%. Kmart's a distant #3, with Kohls, JC Penney, and Sears
tied at #5. BIG Insight Special: Since January 2003, Payless has lost 11%
of their $50,000+ income shoppers, and almost 10% of their female customer
base, which has enabled WalMart to sneak up on the top spot.
With Payless just announcing plans to sell or close over 400 locations
due to another disappointing quarterly earnings report, it's interesting to
note who's the big winner and who's falling behind when it comes to
gaining/losing customers in Shoes. This month's Consumer
Migration Index, 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 - new customers outnumber those
who have left - spell net growth, shows that Payless is trailing WalMart by
a rating of -6.8 to +1.9, perennial loser Kmart with a -3.6...and it looks
like WalMart will stand to gain more when Payless starts shutting
doors.
So where are fickle customers (those shopping a
particular store 1 year or less) going for their shoe needs?
WalMart's #1 with 12.3% share...2. Payless (10.1%), 3. DSW (8.5%), 4. Shoe Carnival
(5.0%), 5. Target & Kohls (3.3%). Inconvenient location, poor selection and high
prices are the biggest reasons consumers cite for switching shoe
stores.
People have little preference for their tire
brands, but when they do, they're most
likely buy are Goodyear and Michelin. Guess where consumers are most
likely to shop for them...Sears, followed closely by (big surprise here)
WalMart. Sam's Club #3.
FUTURE PURCHASES
With
students looking forward to heading back to school/college in the coming weeks
(yeah, right), it seems as though some
parents may get hit up for school and dorm room essentials like computers, appliances, and TVs, as 6
month purchase intentions for these categories on a slight uptick from July.
Jewelry/watch also up (slightly) this month...major home improvement/repair, digital camera, vacation,
stereo equipment flat, while car/truck, furniture, house, DVD/VCR
down.
Parents around the country rejoice as the
2004 Back-to-School shopping season is in full force...90 day outlook is up this month
for children's clothing and shoes, according to the BIGresearch Diffusion Index
(those who say they'll spend less subtracted from those who will spend more).
The outlook also improves month-over-month and year-over-year for the other softline
categories:
Retail Merchandise Categories - 90 Day
Outlook
(August 04 compared to
July 04 and August 03)
| Category | July 04 | August 03 | Category | July 04 | August 03 |
| Children's | UP | UP | Toys and Games | UP | UP |
| Women's Dress | UP | UP | CDs/DVDs/Videos/Books | UP | DOWN |
|
Women's Casual |
UP | UP | Electronics | UP | UP |
| Men's Dress | UP | UP | Groceries | DOWN | DOWN |
| Men's Casual | UP | UP | Home Improvement | DOWN | DOWN |
| Shoes | UP | UP | Lawn & Garden | DOWN | FLAT |
| HBA | UP | UP | Home Furniture | DOWN | DOWN |
| Dining Out | DOWN | DOWN | Decorative Home Furnishings | UP | FLAT |
| Sporting Goods | DOWN | UP | Linens/Bedding/Draperies | UP slightly | UP |
ON THE LIGHTER
SIDE...What's Hot
and What's Not
It's all about pearly
whites and Google this month when it comes to "What's Hot"...those 18-34
made teeth whitener their top choice (followed by Google), while those 35+ are
feeling more of the heat with the popular search engine (teeth whitener
#2). Hybrid autos, cell phone/PDA combos, and 24 hour test drives follow
in the 3 - 5 slots for both age groups. Not so hot? Monogrammed
underwear...well, let's just not go there.
Sincerely,
BIGresearch,
LLC. a Prosper International
Company
100 Old Wilson Bridge, Suite 205, Worthington, Ohio 43085
614-846-0146 • 614-846-0156 •
info@bigresearch.com
Editor