Table of Contents
Executive Summary
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- The issues
- Consumer confidence is up
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- Figure 1: Personal financial assessment, plans for spending, and US economic outlook, July 2014-September 2015
- Improved confidence does not mean less frugality
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- Figure 2: Budgeting tendency versus prior year, by select demographics, September 2015
- Multi-stop path to purchase
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- Figure 3: Retailers shopped – Also shop at, September 2015
- The opportunities
- Make it personal
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- Figure 4: Budgeting actions taken, by select demographics, September 2015
- Be an enabler, not a hindrance
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- Figure 5: Shopping behaviors, September 2015
- Go beyond price to experience to stay relevant
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- Figure 6: Items splurged on, September 2015
- What it means
The Market – What You Need to Know
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- Consumer confidence is up; more so for personal finances
- US population aging and diversifying
- Changing family dynamics impact shopping behaviors
- Improved economy does not mean wide open purses and wallets
Market Perspective
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- Consumers more confident about personal finances than US economy
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- Figure 7: Personal financial assessment, plans for spending, and US economic outlook, July 2014-September 2015
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- Figure 8: Total US value sales, by category ($ billion), 2014
Market Factors
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- America’s population is skewing older
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- Figure 9: Population, by age, 2010-20
- Increasingly diverse American profile
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- Figure 10: Total US population growth trends, by race/Hispanic origin, 2010-20
- Shifts in household dynamics impact how people budget and shop
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- Figure 11: Household type, by age of householder, 2013
- Figure 12: Percent distribution of households across income quintiles, by household type, 2013
- Macroeconomic factors reflect consumer optimism
- Consumer confidence and unemployment
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- Figure 13: Consumer confidence and unemployment, 2007-October 2015*
- Gross domestic product and personal consumption expenditures
- Disposable personal income
- Personal saving rate
- Gasoline prices
Key Players – What You Need to Know
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- Off-price is the new trend in ‘value’ retailing
- Supermarkets and department stores are facing challenges
- Retailers need to redefine value beyond merely pricing
What’s Working?
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- Value-oriented brands are thriving
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- Figure 14: Retailers shopped – Any shopping, by heaviest budget shoppers, September 2015
- Off-price retailers provide compelling options to budget shoppers who seek name brands at discounted prices
What’s Struggling?
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- Grocery stores are losing share of household care products
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- Figure 15: Supermarket share of total sales of household paper products, home laundry products, household surface cleaners, and dishwashing products, 2012 and 2014
- Recent softness seen at department stores
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- Figure 16: Analysis of department stores shopped for clothing/accessories, September 2014
What’s Next?
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- Subscription services offer savings over the long-term
- Access over ownership
- “Smarter” shopping options
The Consumer – What You Need to Know
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- Every budget shopper is different
- Nearly everyone is budgeting the same or more than last year
- Budget shoppers are well-informed by the time they’re ready to buy
- Even budget shoppers splurge once in awhile
Defining a Budget Shopper
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- Is bargain hunting hereditary?
- Slicing and dicing
- Consumer segmentation
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- Figure 17: Economic outlook segmentation, percentage by segment, July 2014-September 2015
- Figure 18: Budget shopper spectrum based on economic outlook segmentation, July 2014-September 2015
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- Figure 19: Economic outlook segmentation, general attitudes, July 2014-September 2015
- Repertoire analysis
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- Figure 20: Repertoire of budgeting actions taken, September 2015
- Figure 21: Repertoire analysis of heaviest budget shoppers, by select demographics, September 2015
- Consumers describe themselves on the spectrum
Budgeting Tendencies
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- Saving for a rainy day
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- Figure 22: Budgeting tendency versus prior year, September 2015
- Millennials are budgeting more
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- Figure 23: Tendency to save more versus last year, by select demographics, September 2015
- Cost of living getting more costly
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- Figure 24: Reasons for budgeting more, September 2015
Budgeting Actions Taken
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- Coupons remain an effective tactic to drive purchase
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- Figure 25: Budgeting actions taken, September 2015
- Personalized deals are becoming an expectation
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- Figure 26: Shopper attitudes around coupons, January 2014
- Consumers explain their actions and state preferences
Retailers Shopped
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- What they say (Top of mind)
- What they do (Loyalty)
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- Figure 27: Retailers shopped, September 2015
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- Figure 28: Retailers shopped – Any shopping, By Hispanic origin, September 2015
- What they love (Brand affinity)
- What they accept (Routine)
Shopping Behaviors
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- Consumers are proud of the savings they procure
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- Figure 29: Shopping behaviors, September 2015
- Heaviest budget shoppers more likely to stock up; less likely to splurge
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- Figure 30: Shopping behaviors, by repertoire of six or more budgeting actions taken, September 2015
- Store brand stigma is definitely waning
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- Figure 31: Percent of those who always or often buy store/private label brands instead of national brands, by select demographics, September 2015
- Role of technology
Actions Taken to Better Manage Finances
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- Consumers are monetizing their time and possessions
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- Figure 32: Actions taken to improve financial management, September 2015
- Younger consumers at all income levels try to improve their finances
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- Figure 33: Select actions taken to improve financial management, by age and household income, September 2015
- Can retailers and brands also morph into financial advisors?
Splurging
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- Consumers are craving experiences more than ever
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- Figure 34: Items splurged on, September 2015
- Turning splurges into rewards
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- Figure 35: Items splurged on, by generation, September 2015
- Why, when and what budget shoppers splurge on
From the Minds of Budget Shoppers
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- Budget shoppers reveal what’s important
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 36: Percent of consumers with bachelor’s degree or graduate/professional degree, aged 25 or older, by Race, 2014
- Figure 37: Median household income, in inflation-adjusted dollars, by Race/Hispanic origin 2004-14
- Figure 38: Number of households, 2003-13
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- Figure 39: Household size, 2003-13
- Figure 40: Household size, by race and Hispanic origin, 2013
- Figure 41: Median household income, in inflation-adjusted dollars, 2004-14
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- Figure 42: GDP change from previous period and consumption expenditures, Q1 2007-Q3 2015
- Figure 43: Disposable personal income change from previous period, January 2007-September 2015
- Figure 44: Personal saving rate, 2007-September 2015
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- Figure 45: US gasoline and diesel retail prices, all grades and formulations, 2007-October 2015
- Figure 46: Homeownership rate in the US, 2007-14
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Appendix – The Consumer
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- Target segmentation
- Facing Challenges
- Financial Nesters
- Economically Indifferent
- Fiscally Fit
- Confident Spenders
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- Figure 47: Economic outlook segmentation, by select demographics, July 2014-September 2015
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- Figure 48: Economic outlook segmentation, events experienced in the last 12 months, July 2014-September 2015
- Additional data
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- Figure 49: Shopping attitudes and coupon usage, July 2014-September 2015
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