BIGresearch Executive Briefing: September 2008

BIGresearch's Consumer Intentions & Actions Survey monitors more than 7,500 consumers each month to provide unique insights and identify opportunities in a fragmented and transitory marketplace.September 2008 (Respondents surveyed 9/2/08 - 9/9/08)Talking Points: Consumer confidence continues to rise Practicality in purchasing on the rise Consumers remain focused on finances Gas price "optimism"…$3.73 predicted at Halloween SPECIAL: Advanced Holiday '08 Outlook Which websites may host the most traffic for holiday Apparel orders? Shoe Wars: It's Payless again Consumer Migration: Sporting Goods 90 Day Outlook brightens from August for many categories What's Hot? To drill or not to drill?Notice: A video briefing of this report is available on Blip.TV, YouTube, or right here:ECONOMYWith gas prices tempering in the mid-$3 range, consumer confidence rises for the second month in a row…this month, 28.3% are confident/very confident in chances for a strong economy, rising from 23.6% last month and the highest reading since January (33.5%). Confidence, though, has yet to rebound from record lows reached in June and July, remaining almost 13 points behind September '07 (41.2%).Game…set…we're ready for the match-up…with the conventions concluded and the VPs selected, the court has been set for major changes on Capitol Hill. This, coupled with last month's Russian/Georgian conflict and hurricanes brewing down South, has likely led to increasing concerns regarding political and national security issues…25.8% continue to worry, up more than a point from last month and almost ten points from one year ago (16.1%).It's not the news that retailers want to hear heading into the holiday selling season (more on that in "Retail"), but consumers are hedging more toward practicality in September…close to half (49.4%) say they've become more practical in the last six months, up about a point from August (48.6%) and more than 12 points from September '07 (36.7%).Merchandisers and marketers are going to have to be extra savvy to coax the givers out of would-be grinches…this month, the majority (56.1%) maintains they're focused on needs over wants in purchasing…while down a point from August (57.2%), this reading is about 13 points higher than September '07 (43.2%), a harbinger of continued slow sales for stores.PERSONAL/FINANCIALIncreasing confidence has appeared to offset the recent rise in the U.S. unemployment rate, as consumers' outlook for the employment environment continues to improve…this month, 45.7% contend there will be "more" layoffs in the next six months, lowering from the 54.0% who felt the same in August. Two in five (44.3%) feel layoff levels will remain the "same" (v. 37.7%), while one in ten (10.0%) hope for "fewer" (v. 8.3%). Personal concerns about becoming laid off, though, remain unabated…6.7% continue to fear the pink slip, flat with August (6.8%) and rising from 4.0% one year ago.With 46.1% maintaining that they aren't saving enough for future needs, consumers remain vigilant about feeding their financial portfolios…paying down debt (35.8%) and decreasing overall spending (32.2%) remain top priorities, increasing from 32.0% and 25.8% in '07, respectively. A rising number of consumers are also planning to increase savings (25.7%) and pay with cash more often (21.8%):The Fannie Mae and Freddie Mac bailouts may have led to a short-term uptick in the stock market, but will investors remain ready to buy? In September, the majority remain confident in Wall Street, with 53.7% saying they would definitely/probably invest, up half a point from August (53.2%). One in ten (10.3%) investors are poised to "buy" in the next three months, while 5.6% intend to sell, up slightly from August (5.0%).With drivers "enjoying" lower average gas prices in recent weeks, more seem to have eased their brakes on spending…while 83.3% continue to be affected by fluctuating pump prices, slightly fewer are reducing dining out, decreasing vacation travel, and reducing spending on groceries and apparel compared to August. However, with pump prices still averaging $1/gal more than last year, major cutbacks in spending are still evident compared to '07:With the amount drained on gas directly affecting the disposable income available to spend on other goods and services, retailers may be pleased to find increasing optimism regarding pump price predictions through Halloween. This month, one-third (34.0%) contend that gas prices will rise, lowering from the 39.5% who felt the same about the direction of prices come Labor Day. Almost half (45.4%) expect them to remain the same, while one in five (20.7%) portend a decrease. Drivers are predicting an average pump price of $3.73/gal on Fright Night, $0.20 below the $3.93 anticipated for Labor Day.RETAILSPECIAL: Advanced Holiday '08 Outlook…While one-fifth (21.0%) indicating it's too early to know, recent improvements in consumer confidence and prices at the pump don't appear to be enough to offset lasting effects of a still-dismal housing market, the credit crunch, and economic turmoil in general…a minor 4.7% indicate they plan to spend more on gifts this year compared to last, lowering from 6.9% who said the same one year ago. One in three (31.4%) plans to spend the same (v. 37.4% in '07), while two in five (39.0%) intend on spending less (v. 30.9% last year).Retailers hoping to make the most of a likely less-than-stellar holiday selling season will benefit from knowing who the likely "Big Spenders" and "Penny Pinchers" are…this season's spenders are more likely to be male, younger, and maintain higher household incomes than their penny-pinching counterparts:Cyber Monday may continue to pick up steam with holiday shoppers hitting the 'Net to find the best prices on holiday gifts, as 91.0% contend they already regularly or occasionally surf the web to research products online. Electronics (43.3%), Apparel (22.9%), Appliances (22.9%), Home Improvement (19.4%), and Shoes (19.0%) are among the most popular categories researched, while Google (25.6%), Amazon (8.9%), Yahoo (5.5%), and eBay (2.8%) are the most frequently searched sites.With Apparel a perennial gifting favorite, which sites may host the most traffic this holiday season? Consumers contend they frequent Walmart.com (4.7%) most often for items including clothing, shoes, and accessories…eBay.com (4.5%), JCPenney.com (4.3%), Amazon.com (3.7%), and Kohls.com (3.1%) follow closely behind. Though savvy sites take note: almost half (46.5%) indicate "No Preference" for Apparel site shopped most often…these open-minded shoppers may be lured to sites offering special bonuses, free shipping, and exclusive merchandise.Now onto the brick and mortar report…in Women's Clothing, Walmart maintains the lead among budget-conscious consumers…the big discounter leads with 11.7% shopping there most often, relatively flat from 11.9% one year ago, Kohl's (8.0%) follows in second, also flat (7.8% in '07). JC Penney (6.4%), Macy's (5.8%), and Target (2.7%) round out the Top 5 and all pick up share steam compared to '07.Over in the Men's section, Walmart continues to dominate with 15.3% shopping there most often, rising from 14.4% one year ago. Kohl's (8.7%) and JC Penney (8.4%) follow, growing from 7.7% and 7.9% last year, respectively. Macy's (5.6%) and Sears (3.3%) complete the Top 5.The latest round of the Shoe Wars has Payless in the lead for the second consecutive month with 11.2% to Walmart's 10.8%. The footwear giants (who were tied in September '07 with 10.8% each) continue to best the rest of the Top 5: Kohl's (5.1%), DSW (3.6%), and Macy's tied with JC Penney (3.2% each).Of course, subscribers to our monthly Retail Ratings Reports know where female fashionistas are clamoring up to the latest footwear trends for fall. Click here for the details on Kohl's, Macy's, and DSW: www.bigresearch.com/cast-members/big-rrr-shoes-aug08.pdfTo learn more about the Retail Ratings Reports, which are available for 12 major categories, call 1-800-800-4462 or visit us on the web at www.BIGresearch.com.Walmart continues to court favor with sports fans…the big discounter leads in Sporting Goods/Exercise Equipment with 15.8% shopping there most often (up from 14.6% last year)…big box Dick's Sporting Goods, though, is a close second with 12.2%, rising from 10.6% in '07. The Sports Authority (5.4%), Academy (3.1%), and Big 5 (3.0%) also score within the Top 5.It should come as no surprise in this economic climate that price (53.9%) is the far-leading factor to shop a particular sports store most often…selection (38.2%), location (37.2%), quality (29.0%), and service (14.2%) follow.How long can Walmart top the scoreboard? According to the September Consumer Migration Index (CMI), which tracks those who have immigrated to a store (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 Dick's, boasting a +7.0 CMI, is likely to continue gaining on the big W, who has a relatively flat +0.9 rating:Shoppers most often cited high prices (15.4%) and inconvenient location (15.3%) as reasons to stop supporting a particular Sporting Goods store…poor selection (8.9%), decline of store appearance (6.7%), and poor customer service (6.5%) followed.It's still no contest for Walmart in the Grocery aisle…with 17.4% shopping there most often (up from 14.8% last year), the Bentonville behemoth leads nearest-competitor Kroger (6.4%) by a full 11 points…Publix (4.1%), Safeway (2.8%), and Shoprite (2.1%) complete the Top 5.And, the Walmart imprint is even deeper in Health & Beauty Care…the big discounter is shopped by almost one in three consumers (30.1%) for soaps, shampoos, and the like, 20+ points ahead of druggists CVS and Walgreens. The complete Top 5: Walmart (30.1%), CVS (8.4%), Walgreens (8.0%), Target (6.5%), and Rite Aid (2.8%).With consumers most often preferring druggists (40.1%) over discounters (14.5%) for Prescription Drugs, Walgreens (15.8%) and CVS (14.4%) continue to lead this category, rising from 15.0% and 12.5%, respectively, over the last 12 months. Walmart, though, remains a strong contender in third with 10.5%, up from 8.9% last year. Rite Aid (6.1%) and Target (2.4%) round out the Top 5.FUTURE PURCHASESWhile confidence did increase in September, it appears that rising practicality is squashing consumers' urge to spend, resulting in a mixed 90-Day Outlook, according to the BIGresearch Diffusion Index (those who say they'll spend less subtracted from those who will spend more). Look closely and you'll be able to spot planned gifting categories for the coming months -- Toys, Electronics, CDs/DVDs, and Apparel are up from last month…however, with these categories down compared to September '07, it's likely that consumers will be buying with less enthusiasm this year:Retail Merchandise Categories - 90 Day Outlook(September 08 compared to August 08 and September 07) Category August 08 September 07 Category August 08 September 07 Children's DOWN 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 UP DOWN Groceries UP DOWN Men's Casual UP DOWN Home Improvement FLAT DOWN Shoes DOWN DOWN Lawn & Garden DOWN DOWN HBC DOWN DOWN Home Furniture UP DOWN Dining Out DOWN DOWN Decorative Home Furnishings FLAT DOWN Sporting Goods DOWN DOWN Linens/Bedding/Draperies UP DOWN We've dished a lot of dismal news to retailers this month, but here's a slim silver lining…it appears that consumers haven't completely retreated from considering major purchases, as six- month purchase intentions for many high-dollar durables are relatively stable from '07. Computers, furniture, and digital cameras are up slightly…housing, RV/boat flat, while jewelry/watch, home appliances, major home improvements, stereo equipment, and DVD/VCR are down half a point or less. While autos improve from last month (to 9.6%, from 8.9% in August), 11.1% planned to purchase in September '07. The shining star continues to be TVs…10.6% plans to buy, compared to 9.3% last year (perhaps fueled by the upcoming digital conversion).ON THE LIGHTER SIDE...What's Hot and What's NotTo drill or not to drill? That's one of the big issues aimed at the Presidential candidates, and we've got your answer: three in four constituents agree that drilling for oil in the U.S. is what's hot this month. Golden Olympian Michael Phelps and fall festivals also top this eclectic list. Brown bag lunches appeal particularly to women, as do clutch handbags, while men prefer Facebook over MySpace. What's Not? While some have virtually met their match, the majority agree they are not quite ready for the online dating pool.Sincerely,Editor

P2PI MEMBERS

JOIN P2PI

You May Also Like

Halloween 2023 Shopping Trends

Report: Retail Media Ad Spend on Amazon Jumped 31% in 2023