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Mass Merchandisers: Incl Impact of COVID-19 - US - December 2020

OVERVIEW
What you need to know
Key issues covered in this Report
Definition
COVID-19: market context
Economic and other assumptions
EXECUTIVE SUMMARY 
Top takeaways
Market overview
Mass merchandisers’ sales will benefit from value-focused shoppers
Figure 1: Total US revenues and forecast of mass merchandisers, at current prices, 2015-25
Impact of COVID-19 on mass merchandisers
Figure 2: Short-, medium- and long-term impact of COVID-19 on mass merchandisers, December 2020
Opportunities and challenges
Use partnerships to become a destination beyond the essentials
Improve online convenience through social commerce and personal services
Use technology to provide a clean shopping experience
THE MARKET – KEY TAKEAWAYS 
High unemployment and low confidence will keep value-conscious consumers shopping at mass retailers
Partnerships, sustainability and technology will fuel mass retailers’ sales growth
MARKET SIZE AND FORECAST 
Value-focused shopping will accelerate growth at mass merchandisers
Figure 3: Total US revenues and forecast of mass merchandisers, at current prices, 2015-25
Figure 4: Total US revenues and forecast of mass merchandisers, by segment, at current prices, 2015-25
Macroeconomic data
High unemployment and low confidence will push more consumers to mass retailers
A focus on essentials will continue to drive traffic at mass retailers
Impact of COVID-19 on mass merchandisers
Figure 5: Short-, medium- and long-term impact of COVID-19 on mass merchandisers, December 2020
Lockdown
Re-emergence
Recovery
COVID-19: US context
Learnings from the last recession
MARKET FACTORS 
Recession will elicit more value-seeking behavior
Figure 6: Consumer confidence and unemployment, 2000-October 2020
Lifestyle and ethnicity influences where consumers shop
Figure 7: Number of households, by race and Hispanic origin of householder, 2013-23
Figure 8: Living arrangements of adults aged 18 or older, 2008 and 2018
Tech-driven consumers seek a seamless shopping experience
MARKET OPPORTUNITIES 
Embrace secondhand and sustainable shopping
Explore external partnerships that combine consumers’ interests
Figure 9: Ulta and Target partnership announcement, November 2020
Evolve online offerings to improve the online experience
Use technology to provide safer, cleaner shopping
COMPETITIVE STRATEGIES
Target and Ulta team up to tackle the beauty market
Walmart’s new loyalty program goes toe-to-toe with Prime
Figure 10: Walmart + commercial, September 2020
Store brands get a facelift
Figure 11: Target good & gather groceries, September 2020
Figure 12: Walmart free assembly apparel, December 2020
Mass retailers meet holiday shoppers where they are
Walmart delivers Christmas to shoppers, including trees
Meijer rewards those who use curbside pickup
Retailers get social with shoppers
Figure 13: Target shopping guide: gifts for the fam, December 2020
Figure 14: Walmart and Tastemade “struggle meals” holiday video, November 2020
THE CONSUMER – KEY TAKEAWAYS 
Majority of consumers are shopping Target and Walmart
Shoppers come for the prices, stay for the convenience and variety
The pandemic has shifted shopping habits and preferences
CONSUMER TRENDS DRIVERS AND MASS MERCHANDISERS
Value
Technology
Wellbeing
Surroundings
RETAILERS SHOPPED AND SHOPPING METHOD
Walmart and Target have widespread consumer appeal
Figure 15: Retailers shopped, October 2020
Target is the mass merchant of choice for value-seeking higher-income shoppers
Figure 16: Retailers shopped – By HHI, October 2020
Majority of parents are shopping multiple mass merchandisers
Figure 17: Retailers shopped – By parental status, October 2020
Gen Z still likes to shop in stores
Figure 18: Retailers shopped and shopping method – By generation, October 2020
ITEMS PURCHASED 
Essentials and beauty are top purchases, regardless of brand
Figure 19: Items purchased – Store brands versus name brands, October 2020
Mass merchandisers are a beauty destination for most women
Figure 20: Items purchased – Store brand versus name brand (BPC) – By gender, October 2020
Parents are shifting grocery purchases to mass retailers
Figure 21: Target recipe for parents and kids, October 2020
Figure 22: Items purchased – Store brand versus name brand (groceries) – By parental status, October 2020
REASONS FOR SHOPPING MASS MERCHANDISERS
Value is a primary reason for shopping mass
What’s happening
Figure 23: Reasons for shopping mass merchandisers, October 2020
What it means
What to do
Men’s trust motivates them to shop
Figure 24: Target Style: how to play dress up, November 2020
Black consumers shop for the whole family
Figure 25: Reasons for shopping mass merchandisers – By gender and ethnicity, October 2020
PERCEPTIONS OF MASS MERCHANDISERS
Target vs Walmart
Figure 26: Perceptions of mass merchandisers – Target versus Walmart, October 2020
Kmart and Walmart need reliability
Figure 27: Correspondence analysis – Symmetrical map – Perceptions of mass merchandise, October 2020
Social consciousness needs improvements
Figure 28: Target Black-owned businesses post, September 2020
Figure 29: Walmart taking action against racism, June 2020
Majority don’t think it’s easy to shop online at mass merchandisers
Figure 30: Select perceptions of mass merchandisers, October 2020
Young women love Target’s affordable trends
Figure 31: Target designer dress collection, June 2020
Black consumers appreciate Walmart, while Hispanic consumers appreciate Target
Figure 32: Perceptions of Walmart – By race, October 2020
Figure 33: Perceptions of Target – By Hispanic origin, October 2020
CHANGES BECAUSE OF COVID-19
One third of shoppers are primarily shopping at mass retailers
Figure 34: Changes because of COVID-19, October 2020
Mass merchandisers have gained more male shoppers
Figure 35: Changes because of COVID-19 – By gender, October 2020
DESIRED IMPROVEMENTS
Free delivery will have the most impact on shopping
Figure 36: Desired improvements, October 2020
Cleanliness is currency for many shoppers
Figure 37: Desired improvements – Clean-shopping – Select demographics, October 2020
Figure 38: Walmart touch-free checkout video, April 2020
Social commerce appeals to tech-driven and convenience-driven shoppers
Figure 39: Desired improvements – Shopping through social media – Select demographics, October 2020
Hispanic shoppers want both clean and alternative shopping options
Figure 40: Desired improvements – By Hispanic origin, October 2020
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Forecast
Consumer survey data
Abbreviations and terms
Abbreviations
APPENDIX – THE CONSUMER
Figure 41: Shopping method – in-store versus online, October 2020
Figure 42: Correspondence analysis – Symmetrical map – Perceptions of mass merchandise, October 2020

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