Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Advertising creative
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- Insights and opportunities
- Market size and segmentation
- Market drivers
- Psychographic drivers
- Innovation and innovators
- Shopping attitudes
- Strategies used to avoid paying full price
- Shopping trends, by retailer
- Discount and value-driven department stores
- Mid-end department stores
- Luxury department stores
- Shopping trends, by product type
- Electronics
- Clothing, accessories and footwear
- Furniture and housewares
Insights and Opportunities
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- Consider expanding the food offering to attract new customers
- Increase selection of plus sizes to attract more female shoppers, especially in the southeast
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- Figure 1: States in which at least 27% of the population are obese, 2007
- iPhone Parents
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- Figure 2: Incidence of using mobile devices to search for bargains, by parent segments, April 2010
- Give customers control over clothing design
- Retail Theater: Interactive dressing rooms and counters
Inspire Insights
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- Media Evolution
- What's it about?
- What we've seen
- Specifics
- Implications
Market Size and Trends
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- Total annual sales
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- Figure 3: Department stores sales at current prices, 2005-10
- Figure 4: Department stores sales at inflation-adjusted prices, 2005-10
- Department store sales vs. total retail sales
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- Figure 5: Department stores vs. total retail sales at current prices, 2004-09
Segmentation
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- Key points
- Total department store sales by segment
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- Figure 6: Total department stores sales, discount vs non-discount stores, 2004-09
- Leased department sales by segment
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- Figure 7: Leased department sales at department stores, discount vs non-discount stores, 2004-09
- Discount department stores sales
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- Figure 8: Discount department stores sales at current prices, 2004-09
- Sales of department stores (excl. discount department stores)
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- Figure 9: Sales of department stores (excl. discount department stores) at current prices, 2004-09
Market Drivers
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- Key points
- Economic drivers
- Persistent unemployment drives many to shop carefully
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- Figure 10: U.S. unemployment and job openings rate, December 2009
- Disposable income remains limited in many households
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- Figure 11: Real disposable personal income, January 2007-January 2010
- Consumer confidence remains at historically low level
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- Figure 12: Consumer Sentiment Index, 2007-09
- Income and job concerns drive many into mass merchandisers
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- Figure 13: Shopping patterns in discount vs. department stores, by household income, October 2009
Psychographic Drivers: Attitudes that Shape the Market
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- Key points
- Value for money primary driver
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- Figure 14: Shopping attitudes, 2005-09
- Price and convenience critical behavioral drivers
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- Figure 15: Reasons for not shopping at department stores, April 2010
Innovation and Innovators
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- Key points
- What the consumer wants
- Price, nice staff and tailoring key to driving foot traffic
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- Figure 16: Demand for various innovations and improvements, by age, April 2010
- Free beverages and tailoring may be especially effective in driving traffic among affluents
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- Figure 17: Demand for various innovations and improvements, by household income, April 2010
- What retailers are doing—recent innovations from leading retailers
- Macy’s Online Finder
- Macy’s iPhone app
- JCPenney iPhone App
- Kmart: Smart Assist Program
- Kmart leverages free shipping and social media to gain an edge
Case Studies: Department Stores
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- Luxury department stores
- Macy’s
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- Figure 18: Proportion of total Macy’s sales accounted for by four major categories, 2007-09
- Nordstrom
- Saks Fifth Avenue
- Mid-end department stores and discount
- JCPenney
- Sears and Kmart
- Kohl’s
- Ross Dress For Less
Advertising and Promotion
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- Overview
- Bon-ton brands offer savings to those who bring in Goodwill donations
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- Figure 19: Bon-ton Goodwill donation ad, 2010
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- Figure 20: Younkers Goodwill donation ad, 2010
- JCPenney and Carson Pirie Scott offer savings in appreciation
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- Figure 21: Carson Pirie Scott (Carsons) ad, 2010
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- Figure 22: JCPenney (JCPenney) ad, 2010
- Social media tools and tactics
- Macy’s
- Nordstrom
- JCPenney
- Kmart
- Kohl’s
- Bloomingdale’s
- Responding to users
- Advertising events and promotions
Shopping Attitudes
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- Key points
- Young adults more likely to state they enjoy shopping and tell others
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- Figure 23: Shopping and related attitudes, by age, April 2010
- Affluents more likely to rate purchases
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- Figure 24: Shopping and related attitudes, by household income, April 2010
Strategies Used to Avoid Paying Full Price at Department Stores
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- Key points
- Circulars still a key piece of collateral
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- Figure 25: Strategies used by consumers to avoid paying full price at department stores, by age, April 2010
- Affluents more likely to research online and use mobile tools
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- Figure 26: Strategies used by consumers to avoid paying full price, by household income, April 2010
Shopping Trends, by Retailer
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- Key points
- Mass merchandisers dominate but traffic remains fairly stable at many department stores
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- Figure 27: Incidence of shopping at department store retailers in last three months, by named retailer, 2005-09
- Young adults and affluents are key segments
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- Figure 28: Incidence and frequency of shopping at department stores, by age, April 2010
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- Figure 29: Incidence and frequency of shopping at department stores, by household income, April 2010
- Young adults and affluents more likely to report increased spending, despite economy
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- Figure 30: Incidence of shopping at department stores more, Less or About the same amount as last year, by age, April 2010
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- Figure 31: Incidence of shopping at department stores more, Less or About the same amount as last year, by household income, April 2010
Discount and Value-driven Department Stores
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- Key points
- Chains closely associated with value remain most popular
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- Figure 32: Incidence of shopping at Discount and value-driven Department stores in last three months, by named retailer, by age, November 2008-December 2009
- Figure 33: Incidence of shopping at Discount and value-driven department stores in last three months, by named retailer, by household income, November 2008-December 2009
Mid-end Department Stores
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- Key points
- Most mid-end department store chains relatively small
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- Figure 34: Incidence of shopping at mid-end department stores in last three months, by named retailer, by age, November 2008-December 2009
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- Figure 35: Incidence of shopping at mid-end department stores in last three months, by named retailer, by household income, November 2008-December 2009
Luxury Department Stores
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- Key points
- Macy’s a dominant player in the luxury segment; women key segment
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- Figure 36: Incidence of shopping at luxury department stores in last three months, by named retailers, by gender, November 2008-December 2009
- High appeal among affluents helps Macy’s recover quickly from recession
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- Figure 37: Incidence of shopping at luxury department stores in last three months, by named retailer, by household income, November 2008-December 2009
Category Purchase: An Overview
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- Key points
- Clothing and food/drug remain key categories for all three segments
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- Figure 38: Incidence of shopping at department stores most or all of the time for various categories, by age, April, 2010
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- Figure 39: Incidence of shopping at department stores most or all of the time for various categories, by age, April, 2010
Electronics
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- Key points
- About one in four shoppers purchased an appliance, computer or other electronic device
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- Figure 40: Incidence of category purchase, by age, November 2008-December 2009
- About half purchase electronics at department stores at least some of the time
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- Figure 41: Frequency of purchasing electronics at department stores, by age, April 2010
- Price and convenience most common reasons for buying elsewhere
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- Figure 42: Reason for not purchasing electronics at department stores, by gender, April 2010
Clothing, Accessories and Footwear
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- Key points
- Fit, price and style primary purchase drivers
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- Figure 43: Importance of product attributes when purchasing clothing and accessories, by household income, April 2010
- Apparel more popular than shoes and accessories among affluents
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- Figure 44: Frequency of purchasing clothing, shoes and accessories at department stores, by household income, April 2010
- Personal care and cosmetics relatively popular among young adults
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- Figure 45: Frequency of purchasing personal care, cosmetics/perfume and sporting goods at department stores, by age, April 2010
Furniture and Housewares
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- Key points
- Incidence of category purchase relatively consistent across demographic groups
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- Figure 46: Incidence of furniture and housewares category purchase, by age, November 2008-December 2009
- Most purchase furniture, home appliances and tools at department stores at least some of the time
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- Figure 47: Incidence of furniture and housewares category purchase, by age, April 2010
- Price, convenience and brand selection most common reasons for buying outside the channel
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- Figure 48: Reasons for purchasing furniture, appliance and lawn-garden equipment in other channels, by gender, April 2010
Impact of Race/Hispanic Origin
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- Few actionable differences between race/ethnicity groups
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- Figure 49: Incidence of shopping at department store and mass merchandiser chains, by named retailer, by race/Hispanic origin, November 2008-December 2009
- Price, color and fit especially important among blacks
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- Figure 50: Importance of specific product attributes in clothing/accessory/shoe purchases, by race/Hispanic origin, April 2010
Cluster Analysis
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- Online Savers (33%)
- Demographics
- Characteristics
- Opportunity
- Short and Spend-less (42%)
- Demographics
- Characteristics
- Opportunity
- Low-tech Infrequents (25%)
- Demographics
- Characteristics
- Opportunity
- Cluster characteristic tables
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- Figure 51: Department store shopper clusters, April 2010
- Figure 52: Frequency of shopping at department stores, by department store shopper clusters, April 2010
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- Figure 53: Strategies used by consumers to avoid paying full price at department stores, by department store shopper clusters, April 2010
- Figure 54: Importance of specific product attributes in apparel/shoe/accessory purchases, by department store shopper clusters, April 2010
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- Figure 55: Shopping and related attitudes, by department store shopper clusters, April 2010
- Figure 56: Demand for various innovations and improvements, by department store shopper clusters, April 2010
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- Figure 57: Incidence of shopping at department stores more, Less or About the same amount as last year, by department store shopper clusters, April 2010
- Cluster demographic tables
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- Figure 58: Department store shopper clusters, by gender, April 2010
- Figure 59: Department store shopper clusters, by age, April 2010
- Figure 60: Department store shopper clusters, by household income, April 2010
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- Figure 61: Department store shopper clusters, by race, April 2010
- Figure 62: Department store shopper clusters, by Hispanic origin, April 2010
- Cluster methodology
Custom Consumer Groups
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- The search for status as well as unique products and experiences drives many into department stores
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- Figure 63: Incidence of shopping at department stores in last three months, by retail segmentation group, November 2008-December 2009
- Many high-value customers enjoy culture and wellness
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- Figure 64: Incidence of shopping at department stores in last three months, by named retailer, by high incidence shopper Mosaic groups, November 2008-December 2009
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- Figure 65: Incidence of category purchase, by high incidence shopper Mosaic groups, November 2008-December 2009
- Many minorities, and some urban affluents, belong to lower incidence groups
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- Figure 66: Incidence of shopping at department stores in last three months, by named retailer, by lower incidence shopper Mosaic groups, November 2008-December 2009
Appendix: Other Useful Consumer Tables
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- Figure 67: Shopping and related attitudes, by gender, April 2010
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- Figure 68: Incidence of category purchase at department store, by race/Hispanic origin, April 2010
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- Figure 69: Incidence of furniture and housewares category purchase, by household income, April 2010
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- Figure 70: Importance of product attributes when purchasing clothing and accessories, by household income, April 2010
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- Figure 71: Frequency of purchasing electronics at department stores, by household income, April 2010
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Appendix: Simmons Retail Shopper Segmentation Defintions
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- Just the Essentials
- Upscale Clicks and Bricks
- Status Strivers
- Virtual Shoppers
- Mall Maniacs
- Original Traditionalists
Appendix: Simmons Mosaic definitions
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- Type A02: Dream Weavers
- Type A05: Enterprising Couples
- Type A07: New Suburbia Families
- Type B01: Status-conscious Consumers
- Type G02: Rural Southern Living
- Type B02: Affluent Urban Professionals
- Type E01: Ethnic Urban Mix
- Type J02: Latino Nuevo
- Type J03: Struggling City Centers
- Type K03: African-American Neighborhoods
Appendix: Trade Associations
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