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The American Value Shopper in a Down Economy: Demographic, Marketing,
Retailing and Consumer Insights to Sustain Brand Loyalty in a Down
Economy
Description:
American consumers are in for some major changes as the first decade of the new century nears its close
and the U.S. economy sways into its most significant downturn in years, with grim forecasts about the
possibility of a recession adding to their uncertainty and anxiety. Following the subprime crisis, banks are
becoming more selective about extending credit, and the borrow-and-buy bubble that powered consumer
spending since the early 1980s has finally burst. On top of that, gas and food prices are on the rise. The
result is that consumers are tightening their belts and reevaluating their spending habits with a renewed
emphasis on old school values, which are more about price and less about the thrill of the bargain hunt.
Consumers may increasingly turn to discounters and the Internet and take other measures to conserve
spendable income during an unpredictable time. On the other side of the equation, competition in a
dwindling retail scene across multiple markets is changing the ways in which marketers approach their
target audiences. It's a time of transition in which the highly fragmented population of value shoppers and
the businesses that serve them are both looking for the clarity and confidence to keep the ball rolling.
Drawing on uniquely cross tabulated Simmons Market Research Bureau survey data, the all new report, The
American Value Shopper in a Down Economy, provides a snapshot of today's value shoppers by segmenting
them into four distinct cohorts and identifies what works and what doesn't by delving into their habits,
behaviors, attitudes, and motivations.
Report Methodology
The information in The American Value Shopper in a Down Economy is based on both primary and
secondary research. Primary research involved interviews with experts, public relations and industry
analysts in firms that specialize in value shopper market research. The report features unique analysis based
on the Simmons Market Research Bureau Fall 2007 National Consumer Survey, as well as findings from
BIGresearch's Consumer Intentions and Actions data, based on online monthly surveys of over 8,000 adults.
Secondary research entailed gathering information from relevant trade, business and government sources,
including company literature.
How You Will Benefit from this Report
If your company is interested in understanding and reaching the value shopper, you will find this report
invaluable, as it provides a comprehensive package of information and insight about value shoppers not
offered in any other single source. You will gain a thorough understanding of the current demographic
profile of the value shopper population. Contributing to that understanding will be a complete analysis of
data from published and trade sources, and in-depth examinations of the economic and societal trends that
influence the consumer behaviors of this attitudinal segment of the population. Plus, you'll benefit from
extensive data, presented in easy-to-read and practical charts, tables and graphs.
Contents:
Chapter 1 Executive Summary
Scope of Report
Report Methodology
Value Shopper & Others Defined
The Current Economic Landscape
Growth Slows, Economic Future Uncertain
Figure 1-1 Percentage Changes in U.S. Current-Dollar GDP, Real GDP and the GDP Price Index, 2002-2008
(%)
U.S. Consumer Spending Trends and Attitudes
77% Lack Confidence in Economy
Table 1-2 Percentage of Adults Who Responded Positively to Economy-Related Statements, Month Over
Month, October 2007-April 2008
(U.S. adults)
Prime Consumers Are Tightening Purse Strings
Table 1-3 Average Household Income of Adults Who Plan to Decrease Spending, Year Over Year, April 2003April 2008 (U.S. adults)
Less Educated More Dramatic, More Educated More Sensitive
Table 1-4 Adults Who Plan to Decrease Spending, by Level of Education Year Over Year, April 2003-April
2008 (Percent)
Homeowners Running Scared
Table 1-5 Adults Who Plan to Decrease Spending by Residential Status Year Over Year, April 2003-April 2008
(Percent)
Older Adults Increasingly Likely to Reduce Spending
Table 1-6 Adults Who Plan to Decrease Spending, by Age Range Year Over Year, April 2003-April 2008
(Percent)
Potential Consumer Spending Shifts by Category
The Biggest Losing Categories are?
Table 1-7 U.S. Adults Who Plan to Decrease Spending in: Sporting Goods, Women’s Dress Clothing, Men’s
Dress Clothing, Children’s Toys, CDs/DVDs/Videos/Books, and Various Home Goods April 2003-April 2008
(U.S. adults)
Retail Channel Gains in Specific Product Categories
Table 1-8 Selected Retail Channel Preferences by Product Category: Adults Overall, April 2003- April 2008
(U.S. adults)
Increased Interest in Savings May Be Boon for Internet Shopping
Table 1-9 Selected Retail Channel Preferences by Product Category: Adults Overall, April 2003- April 2008
(U.S. adults)
Retail Channel Preferences Are Eroding
Figure 1-10 Percentage of Adults With No Retail Channel Preference by Product Category: April 2003 vs.
April 2008 (U.S. adults)
Value Shopper Demographics
The Average Value Shopper: Affluent and Educated
The Extreme Value Shopper Splits Between Young and Old
Demographic Profile of Entertainment and No Interest Shoppers
Value Shopper Attitudes
Value Shoppers Outgoing, Adventurous
All New, All The Time
Research?A Reward In Itself?
Ask Me, I Know
Quality Across the Board
Going On A Value Hunt
Shop for Joy
Brand Savvy
Highly Aware of Advertising
Image May Be Everything to XVS
Table 1-11 Statements Indicating Outgoing, Adventurous, and Unique Attitudes, Fall 2007 (index)
Value Shopper Selected Retail Preferences
Retailer Categories: Value Shoppers Show Consistently Higher Penetration than Total Population
Table 1-12 Type of Retailer Shopped Last Four Weeks by Shopper Type, 2007 (%)
Wal-Mart Tops the List of Retailers
Table 1-13 Top 10 Department, Discount, Children’s Toy, Clothing and Footwear Store: Shopped Last Four
Weeks by Shopper Type, 2007 (%)
Average Value Shoppers Get Around
Table 1-14 Shopping Outlet Preferences of Average Value Shoppers, 2007 (%)
Extreme Value Shoppers More Focused on Necessities
Table 1-15 Shopping Outlet Preferences of Extreme Value Shoppers, 2007 (index)
Entertainment and No Interest Shopper Store Preferences
Looking Ahead
Higher Unemployment, Tighter Credit Likely
Importance of Reaching Out to All Types of Value Shoppers
Opportunity for Marketers to Learn and Innovate
Not Just About Price, but It May Seem So
Added Value of Sustainability Keeps Growing
There’s Value in Company Values
Coupon Use likely to Rise
Sampling to Boom
Word-of-Mouth: Added-Value for Marketers and Consumers
Leveraging the Internet
Private Labels May Be the Lucky Ones
Chapter 2 The Current Economic Landscape
Overview
2008 Real GDP Growth Forecasted at a Meager 0.9%
Figure 2-1 U.S. Current-Dollar GDP vs. Real GDP 2002-2008 (in trillion $)
Figure 2-2 Percentage Changes in U.S. Current-Dollar GDP, Real GDP and the GDP Price Index 2002-2008
(%)
Economic Future Uncertain
Unemployment
Figure 2-3 Initial Weekly Unemployment Claims, Four-Week Moving Average January 24, 1977-April 26, 2008
(in thousands)
Figure 2-4 Average Annual Civilian Labor Force Participation Rate and Unemployment Rate 1977-2008
(percent)
Personal Consumption Slows
Figure 2-5 Personal Consumption Expenditures, Current-Dollar versus Real, 2000-2007 (in billions $)
Figure 2-6 Percentage Changes in U.S. Current-Dollar PCE, Real PCE and the PCE Price Index, 2002-2008 (%)
Consumer Prices on the Rise
Figure 2-7 Average Annual Percent Change in the Consumer Price Index for All Items, Durable Goods, NonDurable Goods and Services 1978-Q1, 2008 (percent)
Food Price Increase Breaks Four Percent in 2008
Figure 2-8 Average Annual Percent Change in the CPI for Food and Beverage, Food at Home and Food Away
from Home 1978-Q1, 2008 (percent)
Apparel Price Declines Slowing
Figure 2-9 Average Annual Percent Change in the CPI for All Apparel, Men’s and Boys’ Apparel and Women’s
and Girls’ Apparel 1978-Q1,
2008 (percent)
Housing CPI Steady at Three Percent
Figure 2-10 Average Annual Percent Change in the CPI for All Housing Items, Shelter, Fuels & Utilities and
Furnishings & Operations 1978-Q1, 2008 (percent)
Transportation Costs on the Rise
Figure 2-11 Average Annual Percent Change in the CPI for All Transportation, Private, Public and Motor Fuel
1978-Q1, 2008 (percent)
Other Costs Show a Mixed Trend
Figure 2-12 Average Annual Percent Change in the CPI for Medical Care, Personal Care Products & Services
and Education 1978-Q1,
2008 (percent)
Chapter 3 U.S. Consumer Spending Trends
and Attitudes
Note On BIGresearch Data
Faith No More: 77% Lack Confidence in Economy
Table 3-1 Percentage of Adults with Little or No Confidence in Short-Term Prospects for the Economy,
Month Over Month, October 2007-April 2008 (U.S. adults)
Table 3-2 Percentage of Adults with Little or No Confidence in Short-Term Prospects for the Economy, Year
Over Year, April 2003-April 2008 (U.S. adults)
Realistic Spending Sets In
Table 3-3 Percentage of Adults Who Are More Practical or Realistic in Their Purchases, Month Over Month,
October 2007-April 2008 (U.S. adults)
Table 3-4 Percentage of Adults Who Are More Practical or Realistic in Their Purchases, Year Over Year, April
2003-April 2008 (U.S. adults)
Consumers Consistently Decreasing Spending
Table 3-5 Percentage of Adults Who Are Planning to Decrease Spending, Month Over Month, October 2007
-April 2008 (U.S. adults)
Table 3-6 Percentage of Adults Who Are Planning to Decrease Spending, Year Over Year, April 2003-April
2008 (U.S. adults)
Financial Realism Means Cutting Back
More Paying Off Debt
Table 3-7 Percentage of Adults Who Are Planning to Pay Down Debt, Month over Month, October 2007April 2008 (U.S. adults)
Table 3-8 Percentage of Adults Who Are Planning to Pay Down Debt, Year Over Year, April 2003-April 2008
(U.S. adults)
Selected U.S. Demographics within Economic Attitudes
Prime Consumers Are Tightening Purse Strings
Table 3-9 Average Household Income of Adults Who Plan to Decrease Spending, Year Over Year, April 2003April 2008 (U.S. adults)
What About the Lower Income Shoppers?
Higher-Income Households Quick to Respond to Change in Economy
Table 3-10 Adults Who Plan to Decrease Spending, by Household Income Year Over Year, April 2003-April
2008 (Percent)
Table 3-11 Adults Who Plan to Decrease Spending, by Household Income Year Over Year, April 2003-April
2008 (Number in survey of 8,000)
Lower Educated More Dramatic, Higher Educated More Sensitive
Table 3-12 Adults Who Plan to Decrease Spending, by Level of Education Year Over Year, April 2003-April
2008 (Percent)
Homeowners Running Scared
Table 3-13 Adults Who Plan to Decrease Spending by Residential Status Year Over Year, April 2003-April
2008 (Percent)
Older Adults Increasingly Likely to Reduce Spending
Table 3-14 Adults Who Plan to Decrease Spending, by Age Range Year Over Year, April 2003-April 2008
(Percent)
Chapter 4 Potential Consumer Spending Shifts
by Category
Note On BIGresearch Data
Grocery Spend (Relatively) Spared
Table 4-1 U.S. Adults Who Plan to Decrease Spending in Groceries, April 2003-April 2008 (U.S. adults)
Lawn & Garden, HBC and Children’s Clothing Spending Slow
Table 4-2 U.S. Adults Who Plan to Decrease Spending in: Health & Beauty Care, Children’s Clothing and
Lawn & Garden Supplies, April 2003-April 2008 (U.S. adults)
The Biggest Losing Categories are?
Table 4-3 U.S. Adults Who Plan to Decrease Spending in: Sporting Goods, Women’s Dress Clothing, Men’s
Dress Clothing, Children’s Toys, CDs/DVDs/Videos/Books, and Various Home Goods April 2003-April 2008
(U.S. adults)
Among Adults Who Plan To Cut Overall Spending, Groceries the Least Effected
Table 4-4 Spending Plans by Product Category: U.S. Adults Who Plan to Decrease Spending, April 2003-April
2008 (U.S. adults)
Sporting Goods, Home Furnishings Suffer Most
Table 4-5 Spending Plans by Product Category: U.S. Adults Who Plan to Decrease Spending, April 2003-April
2008 (U.S. adults)
Retail Channel Preferences within Category
Retail Channel Gains in Specific Product Categories
Table 4-5 Selected Retail Channel Preferences by Product Category: Adults Overall, April 2003- April 2008
(U.S. adults)
Increased Interest in Savings May Be Boon for Internet Shopping
Table 4-6 Selected Retail Channel Preferences by Product Category: Adults Overall, April 2003- April 2008
(U.S. adults)
Retail Channel Preferences Are Eroding
Figure 4-7 Percentage of Adults With No Retail Channel Preference by Product Category: April 2003 vs. April
2008 (U.S. adults)
Warehouse Clubs, Internet Draw Disproportionately Among Shoppers Who Are Curbing Spending
Table 4-8 Selected Retail Channel Preferences by Product Category: Adults Overall vs. Adults Who Plan to
Decrease Spending, April 2008
(U.S. adults)
More Shoppers Head to Discount Stores
Weakening Consumer Preference for Wal-Mart?
Table 4-9 Selected Retail Chain Preferences by Product Category: Adults Overall, April 2003-April 2008 (U.S.
adults)
Table 4-10 Selected Retail Chain Preferences by Product Category: Adults Who Plan to Decrease Spending,
April 2003-April 2008 (U.S. adults)
(U.S. adults)
Chapter 5 Value Shopper Demographics
Note on Simmons Market Research Bureau Consumer Data
Value Shopper & Others Defined
Percentage of Population by Shopper Type
Table 5-1 Percentage of Shoppers by Type: Average Value Shopper, Extreme Value Shopper, Entertainment
Shopper and No Interest Shopper, 2003-2007 (%)
The Average Value Shopper
The More Affluent, Educated, the More Value Shopper Minded
Table 5-2 Top Demographic Characteristics of Average Value Shoppers, 2007 (index)
The Extreme Value Shopper Splits
Extreme Value Shoppers are Younger
?And Older
Other XVS Demographics
Table 5-3 Top Demographic Characteristics of Extreme Value Shoppers, 2007 (index)
A Look at Average Value Shoppers by Household Income
Table 5-4 Percentage of Average Value Shoppers by Household Income, 2007 (%)
Profile of Average Value Shoppers with Household Incomes of <$50K
Table 5-5 Top Demographic Characteristics of Average Value Shoppers with Household Incomes of <$50K,
2007 (index)
Demographic Profile of Average Value Shoppers with Household Incomes of $50K-$99K
Table 5-6 Top Demographic Characteristics of Average Value Shoppers with Household Incomes of $50K$99K, 2007 (index)
Demographic Profile of Average Value Shoppers with Household Incomes of $100K+
Table 5-7 Top Demographic Characteristics of Average Value Shoppers with Household Incomes of $100K+,
2007 (index)
Demographic Profile of Entertainment Shoppers
Table 5-8 Top Demographic Characteristics of Entertainment Shoppers, 2007 (index)
Demographic Profile of No Interest Shoppers
Table 5-9 Top Demographic Characteristics of No Interest Shoppers, 2007 (index)
Chapter 6 Value Shopper Attitudes
Introduction
If Anything, A Fun Shopper!
Table 6-1 Statements Indicating Outgoing, Adventurous, and Unique Attitudes, Fall 2007 (index)
All New, All The Time
Table 6-2 Statements Indicating Importance of Early Trial, Adoption and Newness, Fall 2007 (index)
Value Shoppers as Researchers, Fact Finders and Planners
Table 6-3 Statements Indicating Role as Researcher, Fact-Finder, Planner, Fall 2007 (index)
Ask Me, I Know
Table 6-4 Statements Indicating Importance of Role as Expert, Fall 2007 (index)
Quality is Key to XVS
Table 6-5 Statements Indicating Importance of Quality, Fall 2007 (index)
Going on a Value Hunt
Table 6-6 Statements Indicating Interest in Value Hunting, Fall 2007 (index)
Shop for Joy
Table 6-7 Statements Indicating Joy In Shopping Experience, Fall 2007 (index)
Brand Savvy
Table 6-8 Statements Indicating Strong Interest in Brands, Fall 2007 (index)
Highly Aware of Advertising
Table 6-9 Statements Indicating High Receptivity to Advertising, Fall 2007 (index)
But Also Psychographic Pitfalls
Table 6-10 Statements Indicating a Level of Self-Doubt, Fall 2007 (index)
Affected by Opinions of Others
Table 6-11 Statements Indicating Need for Outside Approval, Fall 2007 (index)
Image May Be Everything to XVS
Table 6-12 Statements Indicating Importance of Image, Fall 2007 (index)
Competitive and Controlling
Table 6-13 Statements Indicating Workaholic Nature, Fall 2007 (index)
And Yet Still Fearful of Responsibility
Table 6-14 Statements Indicating Fear of Responsibility, Fall 2007 (index)
Chapter 7 Value Shopper Retail Preferences
Retailer Categories: Value Shoppers Show Consistently Higher Penetration than Total Population
Table 7-1 Type of Retailer Shopped in Last Four Weeks, by Shopper Type, 2007 (%)
Department, Discount, Children’s Toy, Clothing and Footwear Store Preferences
Wal-Mart Tops the List of Retailers
Table 7-2 Department, Discount, Children’s Toy, Clothing and Footwear Store: Shopped Last Four Weeks by
Shopper Type, 2007 (%)
Table 7-2 Department, Discount, Children’s Toy, Clothing and Footwear Store: Shopped Last Four Weeks by
Shopper Type, 2007 (%)
Average Value Shoppers Go to More Stores
Table 7-3 Shopping Outlet Preferences of Average Value Shoppers, 2007 (%)
Extreme Value Shoppers More Focused on Necessities
Table 7-4 Shopping Outlet Preferences of Extreme Value Shoppers, 2007 (index)
Entertainment Shopper Store Preference
Table 7-5 Shopping Outlet Preferences of Entertainment Shoppers, 2007 (index)
Table 7-5[Cont.] Shopping Outlet Preferences of Entertainment Shoppers, 2007 (index)
No Interest Shoppers Prefer Not to Shop
Table 7-6 Shopping Outlet Preferences of No Interest Shoppers,
2007 (index)
Supermarket Preferences
Table 7-7 Supermarket and Food Store: Shopped Last Four Weeks by Shopper Type, 2007 (%)
AVS May Be More Likely to Shop Quality Experience
Table 7-8 Supermarket Preferences of Average Value Shoppers, 2007 (index)
XVS Indexes Show Mixed Supermarket Allegiances
Table 7-9 Supermarket Preferences of Extreme Value Shoppers, 2007 (index)
Food Shopping Is Necessity, Not Fun For Entertainment Shoppers
Table 7-10 Supermarket Preferences of Entertainment Shoppers, 2007 (index)
No Interests Show Some Interest in A&P, Piggly Wiggly
& Save-A-Lot
Table 7-11 Supermarket Preferences of No Interest Shoppers, 2007 (index)
A Look at Other Top Retailers by Segments
Convenience Stores
Table 7-12 Convenience Stores: Purchased Last Four Weeks by Shopper Type, 2007 (%)
Drug Stores
Table 7-13 Drug Stores: Purchased Last Four Weeks by Shopper Type, 2007 (%)
Home Electronics Stores
Table 7-14 Home Electronics Stores: Purchased Last Four Weeks by Shopper Type, 2007 (%)
Home Furnishing & Houseware Stores
Table 7-15 Home Furnishing & Houseware Stores: Purchased Last Four Weeks by Shopper Type, 2007 (%)
Home Improvement Stores
Table 7-16 Home Improvement Stores: Purchased Last Four Weeks by Shopper Type, 2007 (%)
Office Supply/Computer Stores
Table 7-17 Office Supply/Computer Stores: Purchased Last Four Weeks by Shopper Type, 2007 (%)
Chapter 8 Looking Ahead
It’s the Economy Stupid
Bang the Recession Drum
Higher Unemployment, Tighter Credit Likely
The Credit Hangover
Importance of Reaching Out to All Types of Value Shoppers
The “Planning” Value Shopper
The “Opportunistic” Value Shopper
Communicating to All Value Shoppers a Must
Official Tasters: The Return of The Freebie
Opportunity for Marketers to Learn More About Their Loyal Consumers and Innovate
Fast Food Ahead of the Game
Retailers Lost
Telecom to Increase Promotion
For Many Value Shoppers the Shopping Experience is Key
Not Just About Price, but It May Seem So
Surplus and Salvage Groceries: Growth Channel
Younger Consumers Usher in the New Age of Coupons
Coupon Use likely to Rise with a Recession
Heartland Americans Most Coupon Happy
Average Value Shoppers Comfortable With Variety of Coupons
Table 8-1 Type of Coupon Ever Used by Value Shopper Cohorts, 2007
Opportunity for Paperless, Digital Coupons
Could e-Coupons Breathe New Life to an Analog Industry?
Word-of-Mouth: Added-Value for Marketers and Consumers
WOM a Real Business
Proof in the Numbers
Added Value of Sustainability Keeps Growing
Eco-Friendly, Organic Still Important to Value Shoppers
Core Company Values and Commitment Critical
There’s Value in Company Values
Not Just a Fringe Trend
Green Begets Green, but Skeptics Abound
Leveraging the Internet
Value Shoppers Want Options
Just Give Me the Bottom Line
Price Most Important to the Well-Off
What Loses Out to Price
The Value Shopper’s Best Friend
Strength in Numbers
Could Recession Be a Boon for Internet Retailing?
Where Are Average Value Shoppers Buying Online?
Table 8-2 Type of Item Ordered Off the Internet in Last 12 Months, 2007 (%)
Table 8-2[Cont.] Type of Item Ordered Off the Internet in Last 12 Months, 2007 (%)
Shoppers Still Need Wooing
Do More than Just Advertise Online
Will Value Branded Products/Services Surge?
Private Labels May Be The Lucky Ones
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