The American Value Shopper in a Down Economy: Demographic, Marketing, Retailing and Consumer Insights to Sustain Brand Loyalty in a Down Economy

Published: Jun 1, 2008 - 177 Pages

Table of Contents:

Chapter 1 Executive Summary
  • Scope of Report
  • Report Methodology
  • Value Shopper & Others Defined
  • The Current Economic Landscape
    • Growth Slows, Economic Future Uncertain
    • Figure 1-1 Percentage Changes in U.S. Current-Dollar GDP, Real GDP and the GDP Price Index, 2002-2008 (%)

  • U.S. Consumer Spending Trends and Attitudes
    • 77% Lack Confidence in Economy
    • Table 1-2 Percentage of Adults Who Responded Positively to Economy-Related Statements, Month Over Month, October 2007-April 2008
    • (U.S. adults)
    • Prime Consumers Are Tightening Purse Strings
    • Table 1-3 Average Household Income of Adults Who Plan to Decrease Spending, Year Over Year, April 2003-April 2008 (U.S. adults)
    • Less Educated More Dramatic, More Educated More Sensitive
    • Table 1-4 Adults Who Plan to Decrease Spending, by Level of Education Year Over Year, April 2003-April 2008 (Percent)
    • Homeowners Running Scared
    • Table 1-5 Adults Who Plan to Decrease Spending by Residential Status Year Over Year, April 2003-April 2008 (Percent)
    • Older Adults Increasingly Likely to Reduce Spending
    • Table 1-6 Adults Who Plan to Decrease Spending, by Age Range Year Over Year, April 2003-April 2008 (Percent)

  • Potential Consumer Spending Shifts by Category
    • The Biggest Losing Categories are…
    • Table 1-7 U.S. Adults Who Plan to Decrease Spending in: Sporting Goods, Women’s Dress Clothing, Men’s Dress Clothing, Children’s Toys, CDs/DVDs/Videos/Books, and Various Home Goods April 2003-April 2008 (U.S. adults)
    • Retail Channel Gains in Specific Product Categories
    • Table 1-8 Selected Retail Channel Preferences by Product Category: Adults Overall, April 2003- April 2008 (U.S. adults)
    • Increased Interest in Savings May Be Boon for Internet Shopping
    • Table 1-9 Selected Retail Channel Preferences by Product Category: Adults Overall, April 2003- April 2008 (U.S. adults)
    • Retail Channel Preferences Are Eroding
    • Figure 1-10 Percentage of Adults With No Retail Channel Preference by Product Category: April 2003 vs. April 2008 (U.S. adults)

  • Value Shopper Demographics
    • The Average Value Shopper: Affluent and Educated
    • The Extreme Value Shopper Splits Between Young and Old
    • Demographic Profile of Entertainment and No Interest Shoppers

  • Value Shopper Attitudes
    • Value Shoppers Outgoing, Adventurous
    • All New, All The Time
    • Research…A Reward In Itself?
    • Ask Me, I Know
    • Quality Across the Board
    • Going On A Value Hunt
    • Shop for Joy
    • Brand Savvy
    • Highly Aware of Advertising
    • Image May Be Everything to XVS
    • Table 1-11 Statements Indicating Outgoing, Adventurous, and Unique Attitudes, Fall 2007 (index)

  • Value Shopper Selected Retail Preferences
    • Retailer Categories: Value Shoppers Show Consistently Higher Penetration than Total Population
    • Table 1-12 Type of Retailer Shopped Last Four Weeks by Shopper Type, 2007 (%)
    • Wal-Mart Tops the List of Retailers
    • Table 1-13 Top 10 Department, Discount, Children’s Toy, Clothing and Footwear Store: Shopped Last Four Weeks by Shopper Type, 2007 (%)
    • Average Value Shoppers Get Around
    • Table 1-14 Shopping Outlet Preferences of Average Value Shoppers, 2007 (%)
    • Extreme Value Shoppers More Focused on Necessities
    • Table 1-15 Shopping Outlet Preferences of Extreme Value Shoppers, 2007 (index)
    • Entertainment and No Interest Shopper Store Preferences

  • Looking Ahead
    • Higher Unemployment, Tighter Credit Likely
    • Importance of Reaching Out to All Types of Value Shoppers
    • Opportunity for Marketers to Learn and Innovate
    • Not Just About Price, but It May Seem So
    • Added Value of Sustainability Keeps Growing
    • There’s Value in Company Values
    • Coupon Use likely to Rise
    • Sampling to Boom
    • Word-of-Mouth: Added-Value for Marketers and Consumers
    • Leveraging the Internet
    • Private Labels May Be the Lucky Ones

Chapter 2 The Current Economic Landscape

  • Overview
  • 2008 Real GDP Growth Forecasted at a Meager 0.9%
  • Figure 2-1 U.S. Current-Dollar GDP vs. Real GDP 2002-2008 (in trillion $)
  • Figure 2-2 Percentage Changes in U.S. Current-Dollar GDP, Real GDP and the GDP Price Index 2002-2008 (%)
  • Economic Future Uncertain
  • Unemployment
  • Figure 2-3 Initial Weekly Unemployment Claims, Four-Week Moving Average January 24, 1977-April 26, 2008 (in thousands)
  • Figure 2-4 Average Annual Civilian Labor Force Participation Rate and Unemployment Rate 1977-2008 (percent)
  • Personal Consumption Slows
  • Figure 2-5 Personal Consumption Expenditures, Current-Dollar versus Real, 2000-2007 (in billions $)
  • Figure 2-6 Percentage Changes in U.S. Current-Dollar PCE, Real PCE and the PCE Price Index, 2002-2008 (%)
  • Consumer Prices on the Rise
  • Figure 2-7 Average Annual Percent Change in the Consumer Price Index for All Items, Durable Goods, Non-Durable Goods and Services 1978-Q1, 2008 (percent)
  • Food Price Increase Breaks Four Percent in 2008
  • Figure 2-8 Average Annual Percent Change in the CPI for Food and Beverage, Food at Home and Food Away from Home 1978-Q1, 2008 (percent)
  • Apparel Price Declines Slowing
  • Figure 2-9 Average Annual Percent Change in the CPI for All Apparel, Men’s and Boys’ Apparel and Women’s and Girls’ Apparel 1978-Q1,
  • 2008 (percent)
  • Housing CPI Steady at Three Percent
  • Figure 2-10 Average Annual Percent Change in the CPI for All Housing Items, Shelter, Fuels & Utilities and Furnishings & Operations 1978-Q1, 2008 (percent)
  • Transportation Costs on the Rise
  • Figure 2-11 Average Annual Percent Change in the CPI for All Transportation, Private, Public and Motor Fuel 1978-Q1, 2008 (percent)
  • Other Costs Show a Mixed Trend
  • Figure 2-12 Average Annual Percent Change in the CPI for Medical Care, Personal Care Products & Services and Education 1978-Q1,
  • 2008 (percent)

Chapter 3 U.S. Consumer Spending Trends and Attitudes

  • Note On BIGresearch Data
  • Faith No More: 77% Lack Confidence in Economy
  • Table 3-1 Percentage of Adults with Little or No Confidence in Short-Term Prospects for the Economy, Month Over Month, October 2007-April 2008 (U.S. adults)
  • Table 3-2 Percentage of Adults with Little or No Confidence in Short-Term Prospects for the Economy, Year Over Year, April 2003-April 2008 (U.S. adults)
  • Realistic Spending Sets In
  • Table 3-3 Percentage of Adults Who Are More Practical or Realistic in Their Purchases, Month Over Month, October 2007-April 2008 (U.S. adults)
  • Table 3-4 Percentage of Adults Who Are More Practical or Realistic in Their Purchases, Year Over Year, April 2003-April 2008 (U.S. adults)
  • Consumers Consistently Decreasing Spending
  • Table 3-5 Percentage of Adults Who Are Planning to Decrease Spending, Month Over Month, October 2007-April 2008 (U.S. adults)
  • Table 3-6 Percentage of Adults Who Are Planning to Decrease Spending, Year Over Year, April 2003-April 2008 (U.S. adults)
  • Financial Realism Means Cutting Back
  • More Paying Off Debt
  • Table 3-7 Percentage of Adults Who Are Planning to Pay Down Debt, Month over Month, October 2007-April 2008 (U.S. adults)
  • Table 3-8 Percentage of Adults Who Are Planning to Pay Down Debt, Year Over Year, April 2003-April 2008 (U.S. adults)
  • Selected U.S. Demographics within Economic Attitudes
    • Prime Consumers Are Tightening Purse Strings
    • Table 3-9 Average Household Income of Adults Who Plan to Decrease Spending, Year Over Year, April 2003-April 2008 (U.S. adults)
    • What About the Lower Income Shoppers?
    • Higher-Income Households Quick to Respond to Change in Economy
    • Table 3-10 Adults Who Plan to Decrease Spending, by Household Income Year Over Year, April 2003-April 2008 (Percent)
    • Table 3-11 Adults Who Plan to Decrease Spending, by Household Income Year Over Year, April 2003-April 2008 (Number in survey of 8,000)
    • Lower Educated More Dramatic, Higher Educated More Sensitive
    • Table 3-12 Adults Who Plan to Decrease Spending, by Level of Education Year Over Year, April 2003-April 2008 (Percent)
    • Homeowners Running Scared
    • Table 3-13 Adults Who Plan to Decrease Spending by Residential Status Year Over Year, April 2003-April 2008 (Percent)
    • Older Adults Increasingly Likely to Reduce Spending
    • Table 3-14 Adults Who Plan to Decrease Spending, by Age Range Year Over Year, April 2003-April 2008 (Percent)

Chapter 4 Potential Consumer Spending Shifts by Category

  • Note On BIGresearch Data
  • Grocery Spend (Relatively) Spared
  • Table 4-1 U.S. Adults Who Plan to Decrease Spending in Groceries, April 2003-April 2008 (U.S. adults)
  • Lawn & Garden, HBC and Children’s Clothing Spending Slow
  • Table 4-2 U.S. Adults Who Plan to Decrease Spending in: Health & Beauty Care, Children’s Clothing and Lawn & Garden Supplies, April 2003-April 2008 (U.S. adults)
  • The Biggest Losing Categories are…
  • Table 4-3 U.S. Adults Who Plan to Decrease Spending in: Sporting Goods, Women’s Dress Clothing, Men’s Dress Clothing, Children’s Toys, CDs/DVDs/Videos/Books, and Various Home Goods April 2003-April 2008 (U.S. adults)
  • Among Adults Who Plan To Cut Overall Spending, Groceries the Least Effected
  • Table 4-4 Spending Plans by Product Category: U.S. Adults Who Plan to Decrease Spending, April 2003-April 2008 (U.S. adults)
  • Sporting Goods, Home Furnishings Suffer Most
  • Table 4-5 Spending Plans by Product Category: U.S. Adults Who Plan to Decrease Spending, April 2003-April 2008 (U.S. adults)
  • Retail Channel Preferences within Category
    • Retail Channel Gains in Specific Product Categories
    • Table 4-5 Selected Retail Channel Preferences by Product Category: Adults Overall, April 2003- April 2008 (U.S. adults)
    • Increased Interest in Savings May Be Boon for Internet Shopping
    • Table 4-6 Selected Retail Channel Preferences by Product Category: Adults Overall, April 2003- April 2008 (U.S. adults)
    • Retail Channel Preferences Are Eroding
    • Figure 4-7 Percentage of Adults With No Retail Channel Preference by Product Category: April 2003 vs. April 2008 (U.S. adults)
    • Warehouse Clubs, Internet Draw Disproportionately Among Shoppers Who Are Curbing Spending
    • Table 4-8 Selected Retail Channel Preferences by Product Category: Adults Overall vs. Adults Who Plan to Decrease Spending, April 2008 (U.S. adults)
    • More Shoppers Head to Discount Stores
    • Weakening Consumer Preference for Wal-Mart?
    • Table 4-9 Selected Retail Chain Preferences by Product Category: Adults Overall, April 2003-April 2008 (U.S. adults)
    • Table 4-10 Selected Retail Chain Preferences by Product Category: Adults Who Plan to Decrease Spending, April 2003-April 2008 (U.S. adults) (U.S. adults)

Chapter 5 Value Shopper Demographics

  • Note on Simmons Market Research Bureau Consumer Data
  • Value Shopper & Others Defined
  • Percentage of Population by Shopper Type
  • Table 5-1 Percentage of Shoppers by Type: Average Value Shopper, Extreme Value Shopper, Entertainment Shopper and No Interest Shopper, 2003-2007 (%)
  • The Average Value Shopper
  • The More Affluent, Educated, the More Value Shopper Minded
  • Table 5-2 Top Demographic Characteristics of Average Value Shoppers, 2007 (index)
  • The Extreme Value Shopper Splits
  • Extreme Value Shoppers are Younger
  • …And Older
  • Other XVS Demographics
  • Table 5-3 Top Demographic Characteristics of Extreme Value Shoppers, 2007 (index)
  • A Look at Average Value Shoppers by Household Income
  • Table 5-4 Percentage of Average Value Shoppers by Household Income, 2007 (%)
  • Profile of Average Value Shoppers with Household Incomes of <$50K
  • Table 5-5 Top Demographic Characteristics of Average Value Shoppers with Household Incomes of <$50K, 2007 (index)
  • Demographic Profile of Average Value Shoppers with Household Incomes of $50K-$99K
  • Table 5-6 Top Demographic Characteristics of Average Value Shoppers with Household Incomes of $50K-$99K, 2007 (index)
  • Demographic Profile of Average Value Shoppers with Household Incomes of $100K+
  • Table 5-7 Top Demographic Characteristics of Average Value Shoppers with Household Incomes of $100K+, 2007 (index)
  • Demographic Profile of Entertainment Shoppers
  • Table 5-8 Top Demographic Characteristics of Entertainment Shoppers, 2007 (index)
  • Demographic Profile of No Interest Shoppers
  • Table 5-9 Top Demographic Characteristics of No Interest Shoppers, 2007 (index)

Chapter 6 Value Shopper Attitudes

  • Introduction
  • If Anything, A Fun Shopper!
  • Table 6-1 Statements Indicating Outgoing, Adventurous, and Unique Attitudes, Fall 2007 (index)
  • All New, All The Time
  • Table 6-2 Statements Indicating Importance of Early Trial, Adoption and Newness, Fall 2007 (index)
  • Value Shoppers as Researchers, Fact Finders and Planners
  • Table 6-3 Statements Indicating Role as Researcher, Fact-Finder, Planner, Fall 2007 (index)
  • Ask Me, I Know
  • Table 6-4 Statements Indicating Importance of Role as Expert, Fall 2007 (index)
  • Quality is Key to XVS
  • Table 6-5 Statements Indicating Importance of Quality, Fall 2007 (index)
  • Going on a Value Hunt
  • Table 6-6 Statements Indicating Interest in Value Hunting, Fall 2007 (index)
  • Shop for Joy
  • Table 6-7 Statements Indicating Joy In Shopping Experience, Fall 2007 (index)
  • Brand Savvy
  • Table 6-8 Statements Indicating Strong Interest in Brands, Fall 2007 (index)
  • Highly Aware of Advertising
  • Table 6-9 Statements Indicating High Receptivity to Advertising, Fall 2007 (index)
  • But Also Psychographic Pitfalls
  • Table 6-10 Statements Indicating a Level of Self-Doubt, Fall 2007 (index)
  • Affected by Opinions of Others
  • Table 6-11 Statements Indicating Need for Outside Approval, Fall 2007 (index)
  • Image May Be Everything to XVS
  • Table 6-12 Statements Indicating Importance of Image, Fall 2007 (index)
  • Competitive and Controlling
  • Table 6-13 Statements Indicating Workaholic Nature, Fall 2007 (index)
  • And Yet Still Fearful of Responsibility
  • Table 6-14 Statements Indicating Fear of Responsibility, Fall 2007 (index)

Chapter 7 Value Shopper Retail Preferences

  • Retailer Categories: Value Shoppers Show Consistently Higher Penetration than Total Population
  • Table 7-1 Type of Retailer Shopped in Last Four Weeks, by Shopper Type, 2007 (%)
  • Department, Discount, Children’s Toy, Clothing and Footwear Store Preferences
    • Wal-Mart Tops the List of Retailers
    • Table 7-2 Department, Discount, Children’s Toy, Clothing and Footwear Store: Shopped Last Four Weeks by Shopper Type, 2007 (%)
    • Table 7-2 Department, Discount, Children’s Toy, Clothing and Footwear Store: Shopped Last Four Weeks by Shopper Type, 2007 (%)
    • Average Value Shoppers Go to More Stores
    • Table 7-3 Shopping Outlet Preferences of Average Value Shoppers, 2007 (%)
    • Extreme Value Shoppers More Focused on Necessities
    • Table 7-4 Shopping Outlet Preferences of Extreme Value Shoppers, 2007 (index)
    • Entertainment Shopper Store Preference
    • Table 7-5 Shopping Outlet Preferences of Entertainment Shoppers, 2007 (index)
    • Table 7-5[Cont.] Shopping Outlet Preferences of Entertainment Shoppers, 2007 (index)
    • No Interest Shoppers Prefer Not to Shop
    • Table 7-6 Shopping Outlet Preferences of No Interest Shoppers, 2007 (index)

  • Supermarket Preferences
    • Table 7-7 Supermarket and Food Store: Shopped Last Four Weeks by Shopper Type, 2007 (%)
    • AVS May Be More Likely to Shop Quality Experience
    • Table 7-8 Supermarket Preferences of Average Value Shoppers, 2007 (index)
    • XVS Indexes Show Mixed Supermarket Allegiances
    • Table 7-9 Supermarket Preferences of Extreme Value Shoppers, 2007 (index)
    • Food Shopping Is Necessity, Not Fun For Entertainment Shoppers
    • Table 7-10 Supermarket Preferences of Entertainment Shoppers, 2007 (index)
    • No Interests Show Some Interest in A&P, Piggly Wiggly
    • & Save-A-Lot
    • Table 7-11 Supermarket Preferences of No Interest Shoppers, 2007 (index)

  • A Look at Other Top Retailers by Segments
    • Convenience Stores
    • Table 7-12 Convenience Stores: Purchased Last Four Weeks by Shopper Type, 2007 (%)
    • Drug Stores
    • Table 7-13 Drug Stores: Purchased Last Four Weeks by Shopper Type, 2007 (%)
    • Home Electronics Stores
    • Table 7-14 Home Electronics Stores: Purchased Last Four Weeks by Shopper Type, 2007 (%)
    • Home Furnishing & Houseware Stores
    • Table 7-15 Home Furnishing & Houseware Stores: Purchased Last Four Weeks by Shopper Type, 2007 (%)
    • Home Improvement Stores
    • Table 7-16 Home Improvement Stores: Purchased Last Four Weeks by Shopper Type, 2007 (%)
    • Office Supply/Computer Stores
    • Table 7-17 Office Supply/Computer Stores: Purchased Last Four Weeks by Shopper Type, 2007 (%)

Chapter 8 Looking Ahead

  • It’s the Economy Stupid
  • Bang the Recession Drum
  • Higher Unemployment, Tighter Credit Likely
  • The Credit Hangover
  • Importance of Reaching Out to All Types of Value Shoppers
  • The “Planning” Value Shopper
  • The “Opportunistic” Value Shopper
  • Communicating to All Value Shoppers a Must
  • Official Tasters: The Return of The Freebie
  • Opportunity for Marketers to Learn More About Their Loyal Consumers and Innovate
  • Fast Food Ahead of the Game
  • Retailers Lost
  • Telecom to Increase Promotion
  • For Many Value Shoppers the Shopping Experience is Key
  • Not Just About Price, but It May Seem So
  • Surplus and Salvage Groceries: Growth Channel
  • Younger Consumers Usher in the New Age of Coupons
  • Coupon Use likely to Rise with a Recession
  • Heartland Americans Most Coupon Happy
  • Average Value Shoppers Comfortable With Variety of Coupons
  • Table 8-1 Type of Coupon Ever Used by Value Shopper Cohorts, 2007
  • Opportunity for Paperless, Digital Coupons
  • Could e-Coupons Breathe New Life to an Analog Industry?
  • Word-of-Mouth: Added-Value for Marketers and Consumers
  • WOM a Real Business
  • Proof in the Numbers
  • Added Value of Sustainability Keeps Growing
  • Eco-Friendly, Organic Still Important to Value Shoppers
  • Core Company Values and Commitment Critical
  • There’s Value in Company Values
  • Not Just a Fringe Trend
  • Green Begets Green, but Skeptics Abound
  • Leveraging the Internet
  • Value Shoppers Want Options
  • Just Give Me the Bottom Line
  • Price Most Important to the Well-Off
  • What Loses Out to Price
  • The Value Shopper’s Best Friend
  • Strength in Numbers
  • Could Recession Be a Boon for Internet Retailing?
  • Where Are Average Value Shoppers Buying Online?
  • Table 8-2 Type of Item Ordered Off the Internet in Last 12 Months, 2007 (%)
  • Table 8-2[Cont.] Type of Item Ordered Off the Internet in Last 12 Months, 2007 (%)
  • Shoppers Still Need Wooing
  • Do More than Just Advertise Online
  • Will Value Branded Products/Services Surge?
  • Private Labels May Be The Lucky Ones

Abstract:

American consumers are in for some major changes as the first decade of the new century nears its close and the U.S. economy sways into its most significant downturn in years, with grim forecasts about the possibility of a recession adding to their uncertainty and anxiety. Following the subprime crisis, banks are becoming more selective about extending credit, and the borrow-and-buy bubble that powered consumer spending since the early 1980s has finally burst. On top of that, gas and food prices are on the rise. The result is that consumers are tightening their belts and reevaluating their spending habits with a renewed emphasis on old school values, which are more about price and less about the thrill of the bargain hunt.

Consumers may increasingly turn to discounters and the Internet and take other measures to conserve spendable income during an unpredictable time. On the other side of the equation, competition in a dwindling retail scene across multiple markets is changing the ways in which marketers approach their target audiences. It's a time of transition in which the highly fragmented population of value shoppers and the businesses that serve them are both looking for the clarity and confidence to keep the ball rolling.

Drawing on uniquely cross tabulated Simmons Market Research Bureau survey data, the all new Packaged Facts report, The American Value Shopper in a Down Economy, provides a snapshot of today’s value shoppers by segmenting them into four distinct cohorts and identifies what works and what doesn’t by delving into their habits, behaviors, attitudes, and motivations.

Report Methodology
The information in The American Value Shopper in a Down Economy is based on both primary and secondary research. Primary research involved interviews with experts, public relations and industry analysts in firms that specialize in value shopper market research. The report features unique analysis based on the Simmons Market Research Bureau Fall 2007 National Consumer Survey, as well as findings from BIGresearch’s Consumer Intentions and Actions data, based on online monthly surveys of over 8,000 adults. Secondary research entailed gathering information from relevant trade, business and government sources, including company literature.

How You Will Benefit from this Report
If your company is interested in understanding and reaching the value shopper, you will find this report invaluable, as it provides a comprehensive package of information and insight about value shoppers not offered in any other single source. You will gain a thorough understanding of the current demographic profile of the value shopper population. Contributing to that understanding will be a complete analysis of data from published and trade sources, and in-depth examinations of the economic and societal trends that influence the consumer behaviors of this attitudinal segment of the population. Plus, you’ll benefit from extensive data, presented in easy-to-read and practical charts, tables and graphs.

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