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The Budget Shopper - US - November 2017

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
The issues
Fierce competition is challenging value-focused retailers
Figure 1: Retailers shopped, August 2017
Budget shoppers are more focused on price, less on brand loyalty
Figure 2: Influence on shopping, August 2017
The opportunities
Unlocking store or generic brands
Figure 3: Budgeting actions, August 2017
Appealing to all types of budget shoppers
Figure 4: Budgeting behaviors, by age and household income, August 2017
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Financial situations could impact consumers’ need to budget
Planning ahead
MARKET FACTORS 
Optimistic market factors could impact consumers’ willingness to spend
Figure 5: Consumer Sentiment Index, January 2007-September 2017
The election has made some rethink their finances
Figure 6: Election impact on household income and cost of living, by select demographics, May 2017
Diverse households lead to diverse shopping needs
Figure 7: Number of households, by race and Hispanic origin of householder, 2006 and 2016
Preparing for the unknown
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Budget shoppers are frequenting mass and grocery
Value-focused retailers feel the pressure of rising competition
A shift away from name brands
WHAT’S WORKING?
Changes at mass and grocery are capturing the attention of budget shoppers
Figure 8: Retailers shopped, August 2017
Figure 9: Walmart email campaign, August 2017
Figure 10: Amazon email campaign, September 2017
WHAT’S STRUGGLING?
Value-oriented channels are losing budget shoppers to competitors
Figure 11: Retailers shopped, August 2017
WHAT’S NEXT?
New competition arises from current players
Figure 12: Target email campaign, September 2017
An emergence of affordable, nameless brands could threaten some current store brands
Figure 13: Influence on shopping, by age, August 2017
Publicizing assortment, not price, at value-oriented retailers
Helping budget shoppers narrow down their options
THE CONSUMER – WHAT YOU NEED TO KNOW 
Most consumers are budgeting more or the same
Budget shoppers enjoy deal-seeking and are planning for the future
Mass and grocery are preferred by budget shoppers
Experiences are worth splurging on
BUDGETING BEHAVIORS
Budgeting means different things, to different people
Few consumers rarely budget
Figure 14: Budgeting behaviors, August 2017
Younger consumers are more budget conscious, regardless of income
Figure 15: Budgeting behaviors, by age and household income, August 2017
Retirees and older consumers not tied to a budget
Figure 16: Budgeting behaviors by select demographics, August 2017
Blacks and Hispanics are more likely to budget
Figure 17: Budgeting behaviors, by race and Hispanic origin, August 2017
REASONS FOR BUDGETING
Most consumers enjoy the thrill of deal-seeking
Figure 18: Reasons for budgeting, August 2017
Long-term planning and debt reduction key budget drivers
Figure 19: Reasons for budgeting, by gender, August 2017
Figure 20: Reasons for budgeting, by gender and current marital status, August 2017
Older consumers enjoy the hunt for deals
Figure 21: Reasons for budgeting, by age, August 2017
Blacks and Asians are saving, but for different reasons
Figure 22: Reasons for budgeting, by race and Hispanic origin, August 2017
In their own words
RETAILERS SHOPPED
Budget shoppers prefer mainstream channels and Amazon
Figure 23: Retailers shopped, August 2017
Older shoppers stay true to routine and shop grocery
Figure 24: Select retailers shopped, by age, August 2017
Lower-income consumers seek value at mass merchandisers, while higher-income ones prefer Amazon
Figure 25: Retailers shopped, by household income, August 2017
Heavy budgeters shopping value-oriented retailers
Figure 26: Retailers shopped, by age, August 2017
Blacks and Hispanics seek value, while Asians aren’t deterred by membership fees
Figure 27: Retailers shopped, by race and Hispanic origin, August 2017
Budget shoppers describe their favorite stores
BUDGETING ACTIONS
Store brands, discounts, and low-priced items capture most budget shoppers’ interest
Figure 28: Budgeting actions, August 2017
Younger adults frequently shop discounted items and store brands
Figure 29: Budgeting actions, by age, August 2017
Coupon use spans generations
Figure 30: Budgeting actions, by generation, August 2017
Hispanics regularly practice more budgeting actions
Figure 31: Budgeting actions, by race and Hispanic origin, August 2017
INFLUENCE ON SHOPPING
Many budgeters are willing to take a risk or shop around for the best prices
Figure 32: Influence on shopping, August 2017
Younger budget shoppers are less loyal to brands
Figure 33: Influence on shopping, by age, August 2017
Parents are willing to wait for the right prices
Figure 34: Influence on shopping, by select demographics, August 2017
Asian non-Hispanics are strategic with their shopping
Figure 35: Influences on shopping, by Asians, August 2017
SPLURGES
Most consumers willing to splurge on entertainment, experiences and clothes
Figure 36: Splurges, August 2017
Those with higher incomes prefer splurging on experiences
Figure 37: Splurges, by age and household income, August 2017
Young men splurge on fitness
Figure 38: Splurges, by select demographics, August 2017
Whites value splurging on experiences, while Blacks splurge on fashion
Figure 39: Splurges, by race and Hispanic origin, August 2017
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Consumer qualitative research
Direct marketing creative
Abbreviations
APPENDIX – THE MARKET 
Figure 40: Population by race and Hispanic origin, 2012-22
Figure 41: Households, by type, 2016
APPENDIX – THE CONSUMER 
Figure 42: Retailers shopped, dollar stores – CHAID – Tree output, August 2017
Figure 43: Retailers shopped, grocery stores – CHAID – Tree output, August 2017
Figure 44: Retailers shopped, mass merchandisers – CHAID – Tree output, August 2017
Figure 45: Retailers shopped, warehouse clubs – CHAID – Tree output, August 2017
Figure 46: Retailers shopped – CHAID analysis, August 2017

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