How America Shops Everyday
The Pulse from WSL Strategic Retail
by Wendy Liebmann and Candace Corlett

Boomers Take Their Shopping Habits With Them (July, 2004)

The traditional view that older people significantly reduce shopping has been challenged by new research in the latest "How America Shops 2004" study of consumer habits. The percentage of older shoppers, ages 55 to 70, who are "heavy shoppers," (making four or more shopping trips weekly) increased significantly from 2002 to 2004, moving up from 22 percent to 35 percent, according to the ninth bi-annual How America ShopsŪ study conducted by WSL Strategic Retail. (www.wslstrategicretail.com) This increased shopping behavior likely reflects the mindset of a new generation of older shoppers, the baby boomers, who are taking their middle-aged spending habits with them.

I want what I want, where I want it, and at low prices
Older boomers have honed their shopping expertise and are now among the most demanding consumers. When asked why they shop particular retail outlets, the three top reasons were, "always in stock, have what I want" (47 percent); "convenient location" (32 percent); and "lower prices" (32 percent). Demographic distinctions that once typified specific shopping outlets continue to blur as all races, income levels and ages now frequently shop many of the same outlets. More and more it is an issue of you're only as old as you shop. Age is less likely to be a discriminating factor for retailers; for instance convenience and specialty clothing stores are less attractive to those 55 and older, but they are as attracted as younger shoppers to warehouse clubs, supercenters and specialty stores for beauty and the home.

Favorite Shopping Destinations
The favorite retail outlets among those 55 and older are: mass merchandisers (shopped by 93 percent), supermarket/combo stores (82 percent), drug stores (78 percent), and home improvement stores (77 percent). When shopping from home, older consumers prefer catalogs to the Internet (41 percent vs. 25 percent). However, the Internet is gaining older converts rapidly, moving up from shopped by 11 percent in 2002 to 25 percent in 2004. Outside of very specific categories, such as teen clothing, retailers should strive to create 'ageless' stores.

Tracking 12 Leading Indicators
WSL Strategic Retail, which has tracked 12 "Leading Indicator" product categories since the inaugural How America ShopsŪ study, found net purchase increases by older shoppers in only three categories: prescriptions (+19 points), pet supplies (+22 points), and greeting cards (+4 points). Sales were flat in hair and skincare products, while declines were reported in fashion accessories (-21 points), home decorating (-11 points), clothing (-10 points), beauty care/cosmetics (-8 points), food (-5 points), perfume and fragrances (-3 points), and computers and software (-5 points).

Some of these changes are logical, but others are the result of manufacturers ignoring older shoppers. People over 55 may need more prescriptions and not need to buy as much food, but they are still interested in wearing attractive clothes, and taking care of their hair and skin. Manufacturers and retailers in these categories tend to ignore them are risking declining sales. We are in an evolving society with more older people who are willing to shop, but selling to them requires a new attitude on the part of manufacturers and retailers alike.

Retailers Get Barely Passing Grade (April, 2004)

It doesn't seem to matter what the service is, American consumers are tough to please. Retailers consistently receive a grade of "D" for pleasing shoppers. 66 percent is the average grade for retailers But that puts them at the mid-point - better than insurance companies and airlines, and only slightly worse than their church and banks(!)

Demographics Influence Satisfaction
Clues to consumer dissatisfaction are revealed in the demographics. Hispanics are significantly less satisfied than Caucasians with their church and medical services. Younger and lower income restaurant goers are the least satisfied. (Is that because their restaurant experiences are more likely to be the national chains, while older and upper income consumers choose more independent restaurants?)

Men are less satisfied than women with airline and insurance services. Retailers are rated equally by all, as are banks, cell phone service and schools.

Retail Woes ­ What Drives Shoppers Away
Predictably, what will lose shoppers instantly are encounters with bad stores - dirty, cluttered stores and being treated rudely. However, these features are the price of entry - if you cannot do these right you will not be in business.

The important message from shoppers in this PULSE report are the high percentages; 50 percent to 70 percent who are annoyed by retail practices that erode price/value and make it harder to shop. These practices may not cause shoppers to leave a store today, but over the long run they won't win any loyalty.

Success means pleasantly surprising shoppers with Price/Value and an Easy Shopping Experience.

Retailers need to watch those creeping charges that shoppers notice ­ such as fees on gift cards and complicated sale offers. (Those graduated refunds at department stores!)

Out-of-stocks that keep inventory low also annoy shoppers. (Prescriptions that are not available right away!) Manufacturers can offer retailers the tools to make shopping easier to choose the right product and to find it in the store. (There is lots of room for improvement in skin care, cosmetics, and allergy and cold medications.)

At the same time let's not forget the power of Browsing. All the HOW AMERICA SHOPSŪ reports reinforce the power of interesting stuff to browse as a major attraction to satisfying shoppers.

Making Every Minute Count (March 2004)

Time-pressed Americans have been making hard choices to simplify life. We know from the previous PULSE survey that people are "editing life" by spending less time socializing than they did in the past, with consequences for industries such as greeting cards and gifts.

Time management for the 21st century is also translating to cutting back on the time spent on appearance.

The PULSE survey reports:

Living a time-starved lifestyle is leaving people less time for their appearance. A high percentage of Americans are stealing minutes from the time they commit to fitness, grooming and beauty routines.

Lifestyle Activities vs. Five Years Ago

Net change
Wearing make-up -19
Exercising -14
Personal grooming ­5

Note: Net change is the difference between those spending "more" time doing an activity and those spending "less" time.

34 percent of women spend less time on their make-up now than they did five years ago, and not because they have learned how to apply their make-up faster. Age influences the time women allocate to make-up. 43 percent of women 55-plus are cutting back on cosmetics. This is no surprise to us. Our work with baby boomer women tells us that they still want to look good, but years of cosmetic manufacturers focusing on teens and Gen X and Y has left slightly older women feeling under-served, uninformed and unmotivated.

Based on a national Internet survey of 1,129 consumers conducted February 2-9, 2004.

Happier Shoppers (January, 2004)

The good news this holiday season was that more shoppers felt significantly better about their shopping experience than they did a year ago; a sign that retailers got the message about shoppers' desires for newness, innovation, and better service. And it paid off at least for some.

The PULSE survey reports:

  • One-quarter of women and men said shopping was more enjoyable this season, and fewer said it was worse.

  • Retailers gave more shoppers good ideas for interesting gifts.

  • More shoppers noticed better service.

  • The Internet contributed too. In this survey of Internet users (the majority of the population), 73 percent shopped online for the holidays, and 51 percent found it easier to shop online this year than last. (More support for why satisfaction with holiday shopping is up!)

  • Not only about price - the difference this season was not exclusively about "the deal."

  • Shoppers did not feel there were more bargains or sales or that they got better value for their money. Those measures remained consistent with the previous year.

What it Means for Your Business
The improvements retailers are making to keep shoppers are being noticed, and are impacting the way they shop. One of the lessons this season was that while it is about price, it isn't only about price. You need to keep the newness, the innovation coming, in addition to great value. It's part of the satisfaction equation.

The Internet is not to be ignored. It keeps raising the bar for bricks and mortar retailers, making the experience easier for everyone, older shoppers included -- especially older shoppers.

The Hard Facts of Shopper Confidence (January, 2004)

Economic forecasts and consumer shopping behavior continue to just miss. Why?

Cautious Shoppers
The analysts predicted a robust holiday shopping season, and shoppers responded almost, but not quite. Shoppers have lived through the shop 'til you drop 1990s, and the sobering fallout when the bubble(s) burst. The hard reality of shopping life today is that no amount of upbeat economic forecasting is going to fool this group of consumers into believing what their day-to-day experience belies.

Only 18 percent of women, the heartbeat of shopping life, believe the economy has improved in the last six months. Two-thirds of all shoppers are being more cautious about their spending.

Tough Family Finances
The percent of consumers who feel their family's finances are improving has been reduced to less than a quarter of the population. However, almost half the population has hope for next year.

The Poor Feel Poorer
The weakness in holiday sales at the discount chains is explained by lower income consumers where the "recovery" has yet to arrive. Significant numbers of lower income shoppers feel less well off than middle and upper income shoppers.

What it Means for Your Business
Accurate sales forecasts need to consider how shoppers feel as well as what the analysts predict. Don't discount how shoppers feel. With two-thirds of shoppers watching their spending, marketers must provide shoppers with the right justification to buy.

The "recovery" from recession is not spread evenly across the population. The significant differences among the demographic groups will impact some categories and retailers more than others.

Women are more cautious. Older shoppers are least affected by economic change. Lower income shoppers are still in a recession mode. Upper and middle income shoppers are experiencing economic rebound --- but with reduced expectations.

Holiday Prediction, Show Us What's New (December, 2003)

The retail analysts are enthusiastically predicting an increase in holiday sales of 4-7 percent vs. 2002. The BIG BUT is are there enough new and interesting things for shoppers to splurge, because if there are not, then shoppers will not overspend on more of the same 'ole stuff.

The PULSE survey reports:

  • 51 percent of shoppers expect to spend the same as last year on holiday gifts. - Only 16 percent are planning on spending more - The rest? One-third plan to spend less.

  • Younger shoppers are most committed to spending more. It's all about what's NEW!

  • You heard it here first! A strong retail holiday hinges on how much there is out there that is new to buy, just like our prediction for back-to-school which was right on.

  • Only 26 percent of shoppers tell us they are finding new and interesting things to buy for holiday gifts this year.

So what's NEW?

  • The greatest risk is that there is no one big thing on everyone's list.
    - An assortment of games and toys top the list --- no one special item.
    - The usually hot category of electronics has no "must have," only 16 percent see something new in electronics. (Sorry iPod!)

  • When the biggest vote is for "Other" we think the forecasters need to re-think their predictions for holiday sales growth.

Looking for Sales Stability in Tough Times? Focus on Older Shoppers (November, 2003)

All eyes are on aging baby boomers, but if you tilt your lens up just a bit, there is a shopper segment that offers welcome stability in tough economic times ­ shoppers age 55 plus.

20 percent of consumers 55 plus have suffered financial set backs, the same level as younger shoppers, but . . . because of their age, they are less optimistic about the prospects of improving their financial situation. However, for seasoned older shoppers, economic concerns do not translate into reductions in spending as quickly as they do among younger shoppers.

In a tough economy, older and younger shoppers alike cut back on magazines, specialty coffee, books and greeting cards, but. . . 55 plus shoppers are much less likely to cut back on the pleasures of music/CDs/DVDs, entertainment, and the "luxuries" they have become accustomed to: take-out or premium food, the services of a salon, their cell phone or cable TV.

Shopping Patterns

All ages are hooked on mass merchandisers. Those attracting a disproportionate share of 55-plus shoppers are both long established retail formats, the drug stores and catalogs, as well as newer formats, home improvement stores and warehouse clubs. The formats where this age group is significantly less likely to shop are discount clothing stores and specialty stores.

Simplifying Life

People 55 plus are polarized about simplifying their life. However, among the 45% who do want to simplify, older consumers are more likely to do so by shopping, and that means shopping in fewer outlets and trying to get more done on one trip. They are also significantly more likely than younger shoppers to cut back on newspaper and magazine subscriptions, hire someone to do their chores, and of course, clean out years of clutter.

Customer Satisfaction Opportunities: Big and Small (October, 2003)

Given the struggle for sales, retailers and manufacturers need to engage all shopper groups. Disenfranchising any group is a sales opportunity missed, especially when that group makes up a large segment of shoppers.

The PULSE survey reports Disenfranchised shoppers come in all sizes, and face shopping challenges.

What's "normal" in clothing sizes? Not what you might think.

Clothing Sizes

  • Women
    • Petite 21%
    • Junior/Miss 46%
    • Plus 39%
    • Tall 12%

  • Men
    • Short 6%
    • Regular 65%
    • Big 22%
    • Tall 24%
(Percentages add to more than 100% due to multiple responses.)

Two-thirds of Big and Tall men and approximately half of Plus-size and Tall women have to go out of their way to find clothing that suits them. So what do people outside the "norm" do when their size is not available? They shop elsewhere. Retailers who sell clothing are missing 13% to 32% of Plus-size women and 18% to 25% of Big and/or Tall men. Hardest hit are discount clothing stores and direct-to-consumer channels, catalogues and the Internet. (The decline in catalogues is surprising and telling. They used to be almost the last resort for clothing for large women and men. Today they are just one of numerous options.) Most successful are mass merchandisers, which offer a narrow but in-depth assortment of Plus sizes, followed by department stores.

What it means for your business

The diversity of the US population, be it physical size, medical conditions, ethnic origins, etc., is occurring at a great rate. All of which presents significant opportunities, whether you're in the clothing business, the pharmaceutical business or any business for that matter. However, these opportunities come with some risk. If these diverse shoppers are not satisfied with your selection they do not have to compromise. They will go somewhere else, or not buy at all. The addition of SKUs must satisfy real consumer differences that are easily recognized so shoppers can make the right choice easily.

How America Shops Everyday PULSE Report is based on a national Internet survey of 1,022 consumers conduced September 5, 2003.

@Issue - Customer Satisfaction - NOT (September, 2003)

In HOW AMERICA SHOPS Macro Trends 2002, shoppers gave low grades to retailers for their overall performance in "pleasing" them. The average rating of 67, on a scale of 1 to 100, translated into a "D" grade. (If that was your child's report card, how pleased would you be?) Eighteen months later many shoppers are still feeling under-valued, which raises serious concerns, but also opportunities.

The PULSE survey reports Under-appreciated Shoppers

Fewer than half agree that retailers respect them as customers (49%) or value their business (44%). One-third of shoppers are neutral (i.e., neither agree nor disagree), and one-in six feels retailers do not respect them or value their business. Disenfranchised Shoppers 43% say they have to go out of their way to find products or sizes that suit them. (No wonder they feel they are not respected and under-valued.)

What it means for your business

Why should shoppers be loyal? Many feel they get no respect, their business is not valued, and they have to go out of their way to find the right products or sizes. The "satisfaction" opportunity begins with offering shoppers the right products and sizes so they don't feel disenfranchised. (Talk about no respect.) Next comes thanking them for their business. (It's as easy as having staff say, "Thank you. We appreciate your business.") It's no wonder that retailers who offer a "fair level" of satisfaction across a variety of categories at low prices everyday are winning. At least shoppers can get a lot done on one trip, and don't have to pay too much.


Wendy Liebmann and Candace Corlett are the Principals of WSL Strategic Retail. and Editors of The Pulse. Visit http://www.wslstrategicretail.com for more.

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