Table of Contents
Executive Summary
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- Overview
- The issues
- Mass shoppers driven by price, resulting in low loyalty
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- Figure 1: Attitudes toward mass merchandisers, October 2017
- Competition is rising outside the channel
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- Figure 2: Influencers to encourage more shopping, October 2017
- The opportunities
- Utilize technology to encourage more shopping and combat negative perceptions
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- Figure 3: Perceptions of mass merchandisers, October 2017
- Store brands have potential to engage more shoppers and foster loyalty
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- Figure 4: Attitudes toward mass merchandisers and influencers to encourage more shopping, October 2017
- What it means
The Market – What You Need to Know
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- An optimistic outlook
- Supercenters and warehouse clubs are driving growth, but pressure exists from outside the channel
- Diverse consumers have diverse needs, but most seek value
Market Size and Forecast
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- Growth is expected to continue, driven by supercenters and warehouse clubs
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- Figure 5: Total US sales and fan chart forecast of mass merchandisers*, at current prices, 2012-22
- Figure 6: Total US sales and forecast for mass merchandisers*, at current prices, 2012-22
Market Breakdown
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- Supercenters steadily growing, while discount department stores decline
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- Figure 7: Total US retail sales and forecast of mass merchandisers*, by segment, at current prices, 2012-22
- Supercenters are taking share from discount stores
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- Figure 8: Total US retail sales and forecast of mass merchandisers*, by segment, at current prices, 2015 and 2017
Market Perspective
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- Consumers are shopping mass frequently, but pressure from outside the channel continues
Market Factors
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- A diverse population creates diverse shopping needs
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- Figure 9: Population by race and Hispanic origin, 2012-22
- Figure 10: Households with related children, by race and Hispanic origin of householder, 2016
- Income plays a role in consumers’ purchase decisions
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- Figure 11: Median household income, by race and Hispanic origin of householder, 2015
- Consumer confidence and DPI on the rise
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- Figure 12: Consumer confidence and unemployment, 2007-September 2017
- Most consumers seek deals and value at mass retailers
Key Players – What You Need to Know
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- Target and Walmart are making moves to win customers
- Combatting negative perceptions
- Simplifying shopping
What’s In?
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- New initiatives by Target and Walmart appear to be luring in shoppers
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- Figure 13: Retailers shopped – Walmart and Target, October 2017
- How Target plans to win
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- Figure 14: Target email campaign, October 2017
- Target winning with store brands, environment, and value
- How Walmart plans to win
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- Figure 15: Walmart email campaign, August 2017
- Walmart increasing appeal among younger shoppers
What’s Struggling?
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- Is cheap a bad thing?
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- Figure 16: Perceptions of mass merchandisers, select retailers, October 2017
- Kmart and Meijer struggle to keep up with the bigger names
- Target has low association with easy online shopping
What’s Next?
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- Keeping it simple for shoppers
- Creating new reasons to shop
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- Figure 17: Walmart email campaign, November 2017
The Consumer – What You Need to Know
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- Nearly all consumers shop mass, and most do so frequently
- Grocery, beauty, and clothing are key categories
- Price motivates shoppers, dilutes loyalty
- Mass merchandisers deliver good value, but have room for improvement in stores and customer service
- Consumers want rewards and flexible shopping options
Retailers Shopped
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- Nearly all consumers shop mass and more continue to do so online
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- Figure 18: Retailers shopped, October 2017
- Young adults shop the most and they shop around
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- Figure 19: Retailers shopped, by age and income, October 2017
- Parents a key mass customer, even among less-shopped retailers
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- Figure 20: Retailers shopped, parental status by presence of children, October 2017
- Hispanics shopping at major players more than non-Hispanics are
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- Figure 21: Retailers shopped, by race and Hispanic origin, October 2017
Frequency of Shopping
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- Frequency is split nearly even between heavy and moderate shoppers
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- Figure 22: Frequency of shopping, October 2017
- Hispanics are frequent shoppers, Blacks are more moderate
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- Figure 23: Frequency of shopping, by race and Hispanic origin, October 2017
- Who’s shopping more and who’s shopping less?
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- Figure 24: Frequency of shopping, by gender and age, October 2017
Items Purchased
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- Grocery items, beauty, and clothing are top purchases
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- Figure 25: Items purchased, October 2017
- Women, especially moms, are fulfilling grocery needs at mass
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- Figure 26: Items purchased, by select demographics, October 2017
- Men are turning to mass for their fashion needs
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- Figure 27: Items purchased, by select demographics, October 2017
- Hispanics shopping mass for fashion and decor
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- Figure 28: Items purchased, by race and Hispanic origin, October 2017
Attitudes toward Mass Merchandisers
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- Competitive prices and product selection lure shoppers to the channel
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- Figure 29: Attitudes toward mass merchandisers, October 2017
- Certain heavy shoppers are less likely to be loyal
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- Figure 30: Attitudes toward mass merchandisers and frequency of shopping, by parental status, October 2017
- Shoppers across income levels are buying store brands
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- Figure 31: Attitudes toward mass merchandisers, by age and income, October 2017
- Blacks are influenced by price, less likely to be loyal
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- Figure 32: Attitudes toward mass merchandisers, by race and Hispanic origin, October 2017
Perceptions of Mass Merchandisers
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- Most consumers associate mass merchandisers with value and product selection, but some negative perceptions plague retailers
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- Figure 33: Perceptions of mass merchandisers – Part 1, October 2017
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- Figure 34: Perceptions of mass merchandisers – Part 2, October 2017
- Figure 35: Correspondence analysis – Perceptions of mass merchandisers, October 2017
- Young women view Target as more hip and upscale, with good value and products
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- Figure 36: Perceptions of mass merchandisers – Target, by gender and age, October 2017
- Older, lower-income consumers feel Walmart offers good value and ample products
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- Figure 37: Perceptions of mass merchandisers – Walmart, by age and income, October 2017
- Dads perceive Kmart as having good value and product selection, as well as easy store layouts
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- Figure 38: Perceptions of mass merchandisers – Kmart, by parental status, October 2017
- Young men have positive perceptions of Meijer’s store environment, brands, and customer service
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- Figure 39: Perceptions of mass merchandisers – Meijer, by gender and age, October 2017
Influencers to Encourage More Shopping
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- Loyalty rewards and speedy checkouts and deliveries could drive more shopping
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- Figure 40: Influencers to encourage more shopping, October 2017
- Parents, especially moms, want better rewards
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- Figure 41: Influencers to encourage more shopping, by parental status, October 2017
- Self-checkouts and flexible delivery options appealing to younger shoppers
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- Figure 42: Influencers to encourage more shopping, by age or generation, October 2017
- Hispanics want more delivery options
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- Figure 43: Influencers to encourage more shopping, by race and Hispanic origin, October 2017
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Correspondence analysis methodology
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
Appendix – The Market
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- Figure 44: Total US sales and forecast for mass merchandisers*, at inflation-adjusted prices, 2012-22
- Figure 45: Total US retail sales and forecast of supercenters and warehouse clubs, at current prices, 2012-22
- Figure 46: Total US retail sales and forecast of discount department stores, at current prices, 2012-22
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- Figure 47: US revenues of leading national mass merchandisers, at current prices, 2012-16
- Figure 48: Target’s US revenues, by merchandise category, at current prices, 2009-13
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