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American Lifestyles: Markets in Motion - US - April 2018

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
America today
America in 2018
The people
The economy
The consumer
Financial situations are healthy and stable
Figure 1: Current financial situation, 2013-17
Dining takes priority over debt
Figure 2: Where extra money is spent, February 2018
Consumers expect prices to stay the same or increase
Figure 3: Consumer expectations of affordability, February 2018
Americans may be concerned with both child care and elder care
Figure 4: American pride, February 2018
Too small to trust
Figure 5: American attitudes – Trust, February 2018
What it means
AMERICA TODAY – WHAT WILL IMPACT 2018
Trump keeps us on our toes
Americans speaking out
Tech continues to transform markets
AMERICA TODAY – THE PEOPLE
What you need to know
Growth in South and West region drives population forward
Figure 6: US population by region, 2012-17
Millennials continue to be a key target market
Figure 7: US population by generation, 2018
Young Americans have a more racially diverse experience
Figure 8: Distribution of population, by age and race/Hispanic origin, 2018
Birth rate fails to pick up
Figure 9: Number of births (in thousands) and general fertility rate, 2006-16
As birth rate slows, median age climbs
Figure 10: Median age of the population, 1940-2050
Single households most often headed by women
Figure 11: Living arrangements of children under age 18, 2017
AMERICA TODAY – THE ECONOMY
What you need to know
Economic expansion continues through 2017
Figure 12: GDP change from previous period and consumption expenditures, Q1 2009-Q4 2017
Consumer confidence continues upward
Figure 13: Consumer Sentiment Index, January 2007-January 2018
Unemployment continues to be low, low, low
Figure 14: Unemployment and underemployment, January 2007-January 2018
Gas prices inch up
Figure 15: US gasoline and diesel retail prices, January 2007-February 2018
2018 rings in some unexpected turbulence
Figure 16: Dow Jones Industrial Average – Closing values by day, Jan 2017-March 2018
Moderate DPI growth continues
Figure 17: Disposable personal income change from previous period, January 2007-December 2017
Household income on the rise
Figure 18: Median household income, in inflation-adjusted dollars, 2006-16
Women continue to narrow the wage gap
Figure 19: Median earnings of full-time, year-round workers, by gender and female-to-male earnings ratio, in inflation-adjusted dollars, 1960-2016
In a healthy economy, the savings rate dips
Figure 20: Personal Saving Rate, Percent, Monthly, Seasonally Adjusted Annual Rate, January 1980-January 2018
AMERICA TODAY – THE MARKET
What you need to know
US consumer expenditures grow at improved pace
Housing
Healthcare
Transportation
Figure 21: Total US market value sales by category ($billions), 2017
Figure 22: Change in US value sales by category, 2016-17
Outlook for 2022
Winners in the next five years
Facing challenges in the next five years
Figure 23: Total US best- and worst-case forecast value sales at current prices, 2012-22
Figure 24: Forecast growth rate of fastest and slowest growing categories, 2017-22
CATEGORY REVIEW – IN-HOME FOOD
What you need to know
What we think
Only minimal growth for in-home food
Figure 25: Best- and worst-case forecast value sales of in-home food, at current prices, 2012-22
What to watch
Refrigerated case offers antidote to center-store stagnation
Prepared meals regain momentum
Small indulgences continue to gain ground
Last year’s predictions and outcomes
Engagement in food shopping is high, but so is time pressure
Figure 26: Category engagement – In-home food, February 2018
Key consumer findings
CATEGORY REVIEW – DINING OUT
What you need to know
What we think
Restaurants have to balance tradition and innovation without a clear roadmap
Figure 27: Best- and worst-case forecast value sales of dining out, at current prices, 2012-22
What to watch
Shared resources are driving innovation
Beverage-driven concepts get competitive
Social media blends aspiration and reality
Health gets more functional as the lines between health and indulgence blur
Last year’s predictions and outcomes
Dining out brings a focus to all of the senses
Figure 28: Category engagement – Dining out, February 2018
Key consumer findings
CATEGORY REVIEW – ALCOHOLIC DRINKS (OUT-OF-HOME)
What you need to know
What we think
On-premise sales grow but changes in drinking preferences are disrupting the market
Figure 29: Best- and worst-case forecast value sales of alcoholic drinks (out-of-home), at current prices, 2012-22
What to watch
South of the border tastes shape the on-premise market
Come for the groceries, stay for the beer
Social media shapes alcohol trends
Mocktails stand in for the real thing
Last year’s predictions and outcomes
Consumers cite low engagement with alcoholic beverages
Figure 30: Category engagement – Alcoholic drinks, February 2018
Figure 31: Alcoholic beverage consumption, at home vs away from home, January 2018
Key consumer findings
CATEGORY REVIEW – ALCOHOLIC DRINKS (IN-HOME)
What you need to know
What we think
Sales of alcoholic drinks for in-home consumption will see steady gains through 2022
Figure 32: Best- and worst-case forecast value sales of alcoholic drinks (in-home), at current prices, 2012-22
What to watch
Differentiation to avoid dilution
Authentic sense of place, near or far
Cocktails will keep things exciting, customizable
Lighten up
Last year’s predictions and outcomes
Perceived lack of alcohol knowledge means consumers may be leaving decisions up to the experts
Figure 33: Category engagement – Alcoholic drinks, February 2018
Key consumer findings
CATEGORY REVIEW – NON-ALCOHOLIC DRINKS
What you need to know
What we think
Total market grows marginally; performance varies significantly among categories
Figure 34: Best- and worst-case forecast value sales of non-alcoholic drinks, at current prices, 2012-22
Non-alcoholic beverage winners
Struggling non-alcoholic beverage categories
What to watch
A gut feeling
Figure 35: Share of new non-alcoholic* beverage product launches with “probiotic” or “prebiotic” claims, 2013-17
Unwind and relax
Think about it
Last year’s predictions and outcomes
Opportunity to build excitement within the non-alcoholic beverage category
Figure 36: Category engagement – Non-alcoholic drinks, February 2018
Key consumer findings
CATEGORY REVIEW – BEAUTY AND PERSONAL CARE
What you need to know
What we think
BPC category continues to post steady growth
Figure 37: Best- and worst-case forecast value sales of beauty and personal care, at current prices, 2012-22
What to watch
Consumers want more than a natural look
Convenience continues to be leading purchase factor
Customization is an expectation
Last year’s predictions and outcomes
Consumer engagement in BPC is dependent on age and gender
Figure 38: Category engagement – Beauty and personal care, February 2018
Key consumer findings
CATEGORY REVIEW – OTC AND PHARMACEUTICALS
What you need to know
What we think
OTC and pharmaceutical market continues with stable growth
Figure 39: Best- and worst-case forecast value of OTC and pharmaceuticals, at current prices, 2012-22
What to watch
Unique health needs necessitate customization
Value brands thriving across most OTC markets
Taking a cue from food and personal care: free-from claims
The evolving wellness experience
Last year’s predictions and outcomes
VMS adherence is consistent; OTCs taken as-needed
Figure 40: Frequency of VMS, prescription and OTC mediation use, October 2017
Key consumer findings
CATEGORY REVIEW – HOUSEHOLD CARE
What you need to know
What we think
Household care market continues to post slow yet steady growth
Figure 41: Best- and worst-case forecast value sales of household care, at current prices, 2012-22
What to watch
Despite clogged plumbing concerns, flushable wipes experience gains
Improved formulas in laundry pods and long-lasting scent innovations gain traction
All-purpose cleaners cannibalize specialized cleaners; natural brands outperform category leaders
Last year’s predictions and outcomes
Overall engagement is low, but age reveals differences
Figure 42: Category engagement – Household care, February 2018
Key consumer findings
CATEGORY REVIEW – CLOTHING AND ACCESSORIES
What you need to know
What we think
Growth anticipated, but at a slower pace
Figure 43: Best- and worst-case forecast value sales of clothing and accessories, at current prices, 2012-22
What to watch
Blending of physical and digital
Retail automation
Technology overhaul
Personal and personable
The Amazon effect
Last year’s predictions and outcomes
Majority of consumers remained highly engaged in the category
Figure 44: Category engagement – Clothing and accessories, February 2018
Key consumer findings
CATEGORY REVIEW – TECHNOLOGY AND COMMUNICATIONS
What you need to know
What we think
Sales growth roughly on pace with inflation
Best case legitimate possibility
Figure 45: Best- and worst-case forecast value sales of technology and communications, at current prices, 2012-22
What to watch
Smart home
Figure 46: Sales of high-growth new technology products, at wholesale current prices, 2016-18
What to worry about: mobile services and pay TV
Last year’s predictions and outcomes
Consumer engagement similar to other categories
Figure 47: Category engagement – Technology and communications, February 2018
Key consumer findings
CATEGORY REVIEW – VACATIONS AND TOURISM
What you need to know
What we think
Continued growth expected for travel market
Figure 48: Best- and worst-case forecast value sales of vacations and tourism, at current prices, 2012-22
What to watch
Hotels will continue to compete with home shares/home rentals
Theme parks can attract family vacationers
Tech can edge out competition
Loyalty programs expand ways to earn and use points
Popularity of destinations will hinge on cost and weather
Last year’s predictions and outcomes
Americans eager to research and read about travel
Figure 49: Category engagement – Vacations and tourism, February 2018
Key consumer findings
CATEGORY REVIEW – LEISURE AND ENTERTAINMENT
What you need to know
What we think
A strong economy encourages discretionary spend
Figure 50: Best- and worst-case forecast value sales of leisure and entertainment, at current prices, 2012-22
What to watch
Integration of tech and live experiences
Emphasizing the experience
Millennial and family preferences drive interest
Last year’s predictions and outcomes
Consumers want to know what they can do in their free time
Figure 51: Category engagement – Leisure and entertainment, February 2018
Key consumer findings in leisure and entertainment
CATEGORY REVIEW – HOME AND GARDEN
What you need to know
What we think
Home and garden market poised for future gains
Figure 52: Best- and worst-case forecast value sales of home and garden, at current prices, 2012-22
What to watch
Capacity and flexibility boost appliance appeal
Beverage appliances struggle to regain ground; security concerns challenge smart appliances
Products gain intelligence using “eyes” and “ears”
Last year’s predictions and outcomes
Shopping for home and outdoors has barriers; driving down engagement
Figure 53: Category engagement – Home and garden, February 2018
Key consumer findings
CATEGORY REVIEW – TRANSPORTATION
What you need to know
What we think
Overall transportation expenses should ramp up
Figure 54: Best- and worst-case forecast value sales of transportation, at current prices, 2012-22
What to watch
Tesla Model 3 production levels
Self-driving vehicles breaking new barriers in progress toward commercialization
Uber prepares for a 2019 IPO
Last year’s predictions and outcomes
Automotive segment doesn’t draw significant consumer engagement
Figure 55: Category engagement – Automotive, February 2018
Key consumer findings
CATEGORY REVIEW – PERSONAL FINANCE
What you need to know
What we think
Industry market growth predicted to outpace economy at large
Figure 56: Best- and worst-case forecast value of personal finance, at current prices, 2012-22
What to watch
Rapid growth in mobile payments
Drastic fluctuations remain the norm in cryptocurrency markets
Low-cost technological alternatives continue to threaten traditional investment services
Last year’s predictions and outcomes
Consumer engagement
Figure 57: Most important features of financial institution, March 2017
Key consumer findings
CATEGORY REVIEW – HOUSING
What you need to know
What we think
Housing market predicted to continue its upward trajectory
Figure 58: Best- and worst-case forecast value of housing, at current prices, 2012-22
What to watch
Mortgage rates continue to rise, potentially affecting willingness to purchase a home
Home ownership is ultimately a financial priority for most consumers
New and alternative credit checks could become more popular
Last year’s predictions and outcomes
Home ownership rate climbs, but not to past levels
Figure 59: Home ownership rate for the United States (not seasonally adjusted), January 2007-October 2017
Key consumer findings
CATEGORY REVIEW – HEALTH AND VISION
What you need to know
What we think
Low levels of uninsured, climbing chronic illnesses influence spending
Figure 60: Best- and worst-case forecast value sales of health and vision, at current prices, 2012-22
What to watch
Online vision services balance in-person needs
Self-care helps adults maintain stability, avoid costs
Opioid crisis spurs public health emergency and a focus on pain management
Last year’s predictions and outcomes
Seniors depend on doctors for care
Figure 61: Get regular medical checkups, by age, October 2016
Key consumer findings
CATEGORY REVIEW – MISCELLANEOUS
What you need to know
What we think
Miscellaneous spending growth in nearly all segments
Education services
Legal services
Pet products and services
Figure 62: Best- and worst-case forecast value of miscellaneous spending, at current prices, 2012-22
What to watch
Tobacco use experienced a slight uptick, but may fall due to increased regulation
Americans place greater value on their pet’s health
Figure 63: ASPCA pet insurance customer acquisition email, March 2017
Figure 64: Nationwide pet insurance customer acquisition direct mail, July 2017
College enrollment may be on the rebound, education spending likely beneficiary
Traditional crafting holds steady
Last year’s predictions and outcomes
Key consumer findings
THE CONSUMER – WHAT YOU NEED TO KNOW 
Outlook for this year is positive
Restaurants can benefit as discretionary income increases
Not much expectation for affordable goods next year
Adults see the country as powerful, but flawed
Americans may think others have negative perceptions of the country
Made in America is still a powerful concept
Americans willing to talk it out
FINANCIAL OUTLOOK
Americans feel financially secure
Figure 65: Current financial situation, 2013-18
Significant differences in financial positivity by age and gender
Figure 66: Current financial situation, by age, by gender, November 2017
An expectation for stability or improvement
Figure 67: Future financial outlook, November 2017
Young adults have a rosier outlook on the future
Figure 68: Future financial outlook, by age, November 2017
Black adults show financial optimism despite challenges
Figure 69: Current financial state and future financial outlook, by race, November 2017
HOW EXTRA MONEY IS SPENT
Dining out remains a top treat for consumers
Figure 70: Where extra money is spent, February 2018
Travel spending driven by upper status Americans
Figure 71: Where extra money is spent – Select items, by socioeconomic status, February 2018
Saving versus spending
Figure 72: Where extra money is spent – Saving and spending, by gender, February 2018
Older adults show willingness to spend on travel
Figure 73: Where extra money is spent – Saving and spending, by gender, February 2018
CONSUMER EXPECTATIONS FOR 2018
Modest expectations for more affordable goods
Figure 74: Consumer expectations of affordability, February 2018
Affluent Americans have lowest expectations of affordability
Figure 75: Consumer expectations of affordability – Select items, by status level, February 2018
Older adults are the least optimistic about the cost of goods
Figure 76: Consumer expectations of affordability – Select items, by status level, February 2018
Black adults look forward to affordability
Figure 77: Consumer expectations of affordability – Select items, by race, February 2018
AMERICAN PRIDE
Americans are proud, but see the country facing challenges
Adults may need support with child care and elder care
Americans show awareness of possible shortcomings
Figure 78: American pride, February 2018
Relationship between affluence and positivity
Figure 79: American pride – Select items, by status level, February 2018
Older Americans show more favorability
Figure 80: American pride – Parenting and aging, by age, February 2018
Gap in sentiment between men and women
Figure 81: American pride – Global perceptions, by gender, February 2018
PERCEPTIONS OF AMERICANS
Americans show concern about global reputation
Figure 82: Perceptions of Americans, February 2018
Men see the good side of Americans
Figure 83: Perceptions of Americans – Select items, by gender, February 2018
Others’ perceptions illuminate feared shortcomings
Figure 84: Perceptions of Americans – Select items, by race, February 2018
AMERICAN ATTITUDES
“American made” carries weight with consumers
Figure 85: American attitudes – Supporting American business, February 2018
Confronting issues head on
Figure 86: Heineken | Worlds Apart | #OpenYourWorld, April 2017
Figure 87: American attitudes – Controversial issues, February 2018
Belief in American strength
Figure 88: American attitudes – Resilience, February 2018
Older, White, and male adults show the most faith
Figure 89: Official Ram Trucks Super Bowl Commercial | Dr. Martin Luther King, Jr. | Built to Serve, February 2018
Figure 90: American attitudes – Resilience, demographic profile, February 2018
Skepticism plagues data security efforts
In their own words
Figure 91: American attitudes – Trust, February 2018
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Fan chart forecasts
Consumer survey data
Consumer qualitative research
Correspondence analysis methodology
Direct marketing creative
Abbreviations and terms
Abbreviations
Terms
APPENDIX – THE MARKET 
Figure 92: Total US retail sales and forecast of total market, at current prices, 2012-22
Figure 93: Total US retail sales and forecast of total market, at inflation-adjusted prices, 2012-22
Figure 94: Total US retail sales and forecast of in-home food, at current prices, 2012-22
Figure 95: Total US retail sales and forecast of in-home food, at inflation-adjusted prices, 2012-22
Figure 96: Total US revenues and forecast for foodservice, at current prices, 2012-22
Figure 97: Total US revenues and forecast for foodservice, at inflation-adjusted prices, 2012-22
Figure 98: Total US retail sales and forecast of non-alcoholic drinks, at current prices, 2012-22
Figure 99: Total US retail sales and forecast of non-alcoholic drinks, at inflation-adjusted prices, 2012-22
Figure 100: Total US retail sales and forecast of alcoholic drinks (out-of-home), at current prices, 2012-22
Figure 101: Total US retail sales and forecast of alcoholic drinks (out-of-home), at inflation-adjusted prices, 2012-22
Figure 102: Total US retail sales and forecast of alcoholic drinks (in-home), at current prices, 2012-22
Figure 103: Total US retail sales and forecast of alcoholic drinks (in-home), at inflation-adjusted prices, 2012-22
Figure 104: Total US retail sales and forecast of beauty and personal care, at current prices, 2012-22
Figure 105: Total US retail sales and forecast of beauty and personal care, at inflation-adjusted prices, 2012-22
Figure 106: Total US retail sales and forecast of OTC and pharmaceuticals, at current prices, 2012-22
Figure 107: Total US retail sales and forecast of OTC and pharmaceuticals, at inflation-adjusted prices, 2012-22
Figure 108: Total US retail sales and forecast of clothing and accessories, at current prices, 2012-22
Figure 109: Total US retail sales and forecast of clothing and accessories, at inflation-adjusted prices, 2012-22
Figure 110: Total US retail sales and forecast of household care, at current prices, 2012-22
Figure 111: Total US retail sales and forecast of household care, at inflation-adjusted prices, 2012-22
Figure 112: Total US retail sales and forecast of technology and communications, at current prices, 2012-22
Figure 113: Total US retail sales and forecast of technology and communications, at inflation-adjusted prices, 2012-22
Figure 114: Total US retail sales and forecast of leisure and entertainment, at current prices, 2012-22
Figure 115: Total US retail sales and forecast of leisure and entertainment, at inflation-adjusted prices, 2012-22
Figure 116: Total US retail sales and forecast of home and garden, at current prices, 2012-22
Figure 117: Total US retail sales and forecast of home and garden, at inflation-adjusted prices, 2012-22
Figure 118: Total US retail sales and forecast of transportation, at current prices, 2012-22
Figure 119: Total US retail sales and forecast of transportation, at inflation-adjusted prices, 2012-22
Figure 120: Total US retail sales and forecast of travel and tourism, at current prices, 2012-22
Figure 121: Total US retail sales and forecast of travel and tourism, at inflation-adjusted prices, 2012-22
Figure 122: Total US retail sales and forecast of personal finance, at current prices, 2012-22
Figure 123: Total US retail sales and forecast of personal finance, at inflation-adjusted prices, 2012-22
Figure 124: Total US retail sales and forecast of housing, at current prices, 2012-22
Figure 125: Total US retail sales and forecast of housing, at inflation-adjusted prices, 2012-22
Figure 126: Total US retail sales and forecast of health and vision, at current prices, 2012-22
Figure 127: Total US retail sales and forecast of health and vision, at inflation-adjusted prices, 2012-22
Figure 128: Total US retail sales and forecast of miscellaneous expenditure, at current prices, 2012-22
Figure 129: Total US retail sales and forecast of miscellaneous expenditure, at inflation-adjusted prices, 2012-22

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