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JC Penney’s Million Women Walkout

October 30, 2012 Leave a comment

While shying away from using the word coupon, JC Penney’s recent delivery of a $10 “gift” to its email newsletter recipients demonstrated that the beleaguered department store was finally bending to what its customers have been asking for all along: a deal. Since the commencement of its “Fair & Square” promotional strategy in Q1 of 2012, JC Penney has been fighting a losing battle with its dwindling customer base, trying to spoon feed shoppers everyday low pricing like its ice cream, while in reality they were tasting [insert your least favorite veggie here]. What did JC Penney forget? In this economy, consumers have the upper hand with retailers.

With sales set in a tailspin during the first half of the year, it’s obvious that “Fair & Square” was a costly turnabout for both JC Penney and its customers.  But what price did JC Penney pay in terms of lost shoppers?

According to the Consumer Equity Index™ for the highly competitive women’s clothing segment, JC Penney’s share of female customers shrank 13% in the past year, leaving the department store with an index of 86.9 (baseline index = 100).* That equates to a loss of 1.3 million of the department store’s most loyal female women’s clothing shoppers.

With their million woman march out of JC Penney, these shoppers appear to have gravitated to Kohl’s (index = 104.5), Macy’s (116.1), Target (121.6), and even Walmart (112.2) for their women’s apparel purchases. Female shopper share for each of these competitors has increased over the past 13 months:

A million shoppers are a lot to lose in a year’s time – especially in just one category – but the numbers become even more sobering when you consider how much potential revenue JC Penney let slip from its grasp. With the average female spending more than $500 per year within the women’s clothing segment, an estimated $745 million in potential revenue has walked out of JC Penney’s women’s department over the past year – that’s a big share of purse, if you will.

JC Penney’s $10 gift comes at a pivotal time for retailing: the all-important holiday season. And with shoppers continuing to be drawn to sales, coupons, and promotions like moths to a flame, JC Penney is likely to see a short-term increase in the foot traffic it so desperately needs. However, while the department store indicates that this “gift” does not signal their return to couponing, if they want repeat customers, they may have to keep the coupons gifts coming.

* The Consumer Equity Index™ from BIGinsight™ is a year over year index showing growth or decline of consumer preference share. An index of 100 is flat, an index of 105 indicates 5% growth, while an index of 95 denotes 5% decline.

This post originally appeared on Forbes.com as a contribution to the Prosper Now blog.

Top Halloween Candies to Treat – and to Keep

October 24, 2012 Leave a comment

With a record number of adults celebrating Halloween this year, it’s safe to say that this isn’t a holiday just for the kiddos anymore. Those of us 18+ dress in costume, attend parties, carve pumpkins, decorate our homes/ yards, and even force Fido to get in on the fun. Then there’s the candy. Oh, yes, the candy.

Don’t we all get excited when the Halloween treats hit store shelves around Labor Day? I’ll cop to purchasing four bags of my “fun size” favorites last month. I justified this as shopping ahead for what was sure-to-be an onslaught of little trick-or-treaters on Beggar’s Night this year [side note: we had five last year]. But whether we have one, five, twenty, or fifty little ghosts and goblins, it won’t matter because that candy is gone.

Yes, I had consumed four bags of Halloween candy in a matter of weeks.

Strike that.

Yes, my husband and I had consumed four bags of Halloween candy in a matter of weeks. #shame

But we’re not alone in our sugar-high-inducing disgrace…right? As it turns out, we all have our favorite Halloween candies to treat to others – and to keep for ourselves. According to our October monthly survey of nearly 9,000 consumers, about one in five (20.1%) of those with a preference cite Snickers® as their favorite candy to pass out on Beggar’s Night, double the popularity of the next brand on their list, Reese’s® (10.8%) and consistent with last year’s findings.* Expect plenty of Kit Kat® Bars (6.7%), M&M’s® (6.3%), and Hershey® Bars (4.8%) among trick-or-treaters’ Halloween hauls this year as well.

I tend to get a Halloween hankering for three bags worth of Reese’s® Pieces each year [loved them since E.T. #productplacementworks], and I’m glad to see that this craving is perfectly normal: when it comes to the candy that connoisseurs would prefer to keep at home, Reese’s® (16.1%) has a slight edge over Snicker’s® (15.1%), while Candy Corn (7.9%), Kit Kat® (5.7%), and M&M’s® (5.2%) follow.

Although Halloween is still a week away, Beggar’s Night can’t come soon enough. There’s a bag of Milky Way® bars at my house about to become extinct.

Favorite Halloween Candies to PASS OUT to Trick-or-Treaters / KEEP at Home

For more new insights on Halloween from our October survey, see Consumers’ Cure for Stress? Halloween

And, for Halloween data released earlier in the month by our friends at the National Retail Federation, including spending, activities, planned costumes, and a fabulous infographic, please click here.

* Favorite candy brands to pass out to trick-or-treaters and to keep at home are the results of two unaided, write-in questions. Percentages displayed in this report are based on consumers expressing a preference.

Source: BIGinsight.com

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

Generation Gap: The “Normal” only appears to be “New” to older Americans

October 23, 2012 1 comment

You’ve heard the phrase “new normal” on the news, during conversation, in reference to the economy, etc…but what does it mean for most Americans? What has truly become part of normal everyday living in post-recession USA?

Most Americans agree that fluctuating gas prices (71.5%), the rising cost of food (63.5%) and high national debt (60.4%) are now normal parts of living in America that we just have to deal with. The slow-growing economy (53.1%) and the hassle of frequently shopping for sales (50.4%) also top the list.

Although fluctuating gas prices top the list of “normal” conditions for all age groups, members of the Silent Generation (83.9%) are more likely than those in Generation Y (57.5%) to say frequent pain at the pump is part of the “new normal.” Youngsters in the U.S. probably don’t remember when gas cost less than a dollar per gallon while those in the Silent Generation might be reminiscing of the good ol’ days when you could buy a gallon or two with the spare change in your pocket.

The generations also differ when it comes to modesty: not surprisingly, fewer members of younger generations notice a difference in the generally accepted code of conduct, while those in older generations are more likely to see a lack of modesty as a recent development in American living.

While the disappointment of deferring purchases is lower on the list of “new normal” situations to cope with, the Boomer Generation is most likely to feel the sting here. 39.6% of Boomers consider pushing off the purchase of a flat screen, vacation home or new car as just another part of living in the U.S. of A. For comparison, only 26.8% of Gen Yers agree.

For more on the “new normal,” head over to the Prosper Now Blog at Forbes.com.

Source: American Pulse™ Survey, October 2012 #1, N= 3529

© 2012, Prosper®

Consumers’ Cure for Stress? Halloween

October 18, 2012 1 comment

What do you get when you combine tenuous consumer confidence, discouraging employment outlook, and an upcoming Presidential election? Economic uncertainty, which generally leads to consumers clamping down harder on their wallets. That’s not quite the case, though, with Halloween.

This year, a record number of consumers (71.5%) plan to spend a record amount of money ($79.82) on the holiday according to insights we collected for the National Retail Federation. As BIGinsight EVP Phil Rist puts it: “There’s some pent-up demand for having some fun this year.”

Aside from fun, though, it seems that a growing number of consumers is viewing Halloween as having, well, a therapeutic benefit. According to the latest insights from our October survey, one in four celebrants (25.6%) agreed that Halloween “somewhat” or “very much” a stress reliever, rising 20% from last year. And, that number grows substantially among the age groups most likely to don a costume or head to a party this year: 18-24 year olds (39.5%) and 25 to 34 year olds (36.8%), both up from a year ago.

Interestingly, while the thought that Halloween relieves stress declines with age (see chart below), the number of 45 to 54 year olds adhering to this sentiment has risen 36% over a year ago – the highest growth in any age group. Perhaps it’s because this group – on the cusp of retirement and/or sending kids to college and/or worrying about property values and/or etc. – might be most in need of a little levity.

Halloween is "Somewhat" or "Very Much" a Stress Reliever

My tip for a low-stress Halloween? Nix the raisins on Beggar’s Night. Passing out some sugar to the neighbor kids sure beats pulling endless amounts of toilet paper out of your trees the next morning.

Source: BIGinsight.com

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

New October Insights in a Snap!

October 16, 2012 1 comment

This month’s Consumer Snapshot is ready! The video below is a concise look at a few trending topics for the month of October, designed to give you a BIG picture view of current consumers.

Here’s a brief overview of what we’re seeing from consumers in October 2012:

- Beware the fiscal cliff: confidence declines from September
– Employment outlook improves, but still just 1 in 5 expect “fewer” layoffs over the next 6 months
– Practicality when purchasing remains intact
– Increasing savings reaches highest October reading in 6 years
– Walmart wins in Apparel, Shoes
– Toys R Us, Amazon.com see YOY gains in Children’s Toys
– Holiday ’12 is shaping up to be a bit brighter, with the 90 Day Outlook improving for all categories
– DSLR buying trend? Plans to purchase digital cameras highest in 2 years
– Meet Little Miss “Not” Hot for October: Here Comes Honey Boo Boo

 

And NEW this month is the Consumer Snapshot InsightCenter™. When you register for complimentary access to this new InsightCenter™, you’ll have the ability to segment an advance preview of our all-star insights on consumer confidence, employment, shopping strategies, and future purchase plans by several key demographic groups. You can also download this month’s text summary (which includes additional insights) as well as the PowerPoint analysis through this InsightCenter™.

Interested in becoming a BIG VIP? Please click here to sign up for access to a host of complimentary insights, from our briefings and webinars to press releases and more.

Source: BIGinsight.com

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

The Holiday ’12 State of the Consumer

October 11, 2012 Leave a comment

This week, the National Retail Federation announced their 2012 holiday forecast, predicting that sales will rise 4.1% over 2011 to $586.1 billion. The sales growth is expected to be slightly higher than the 10-year average holiday sales increase (3.5%), though pacing below last year’s growth (5.6%). With holiday shoppers gearing up for spending, let’s take a look at the “state of the consumer” as we head into this all-important selling season for retailers:

Confidence is UP, but Feelings are Volatile. In the BIGinsight September monthly survey of more than 9,000 consumers, 38% indicated that they were very confident or confident in chances for a strong economy. This was a high reading for 2012 and a vast improvement over the September 2011’s 23%, when consumers were still reeling from the debt crisis. Confidence is riding a four-point upswing from August to September, but don’t look for this indicator to continue to improve at this pace – 2012 has been a rollercoaster ride for sentiment and continued fluctuation is expected headed into Q4.

Consumer Confidence

The outcome of the “fiscal cliff” drama on Capitol Hill remains big question mark for the sustainability of confidence – as well as holiday sales. Should we fall off that precipice – and realize an average 2013 tax bill increase of $3500 – holiday budgets are bound to shrink. Adding to the precarious position of the economy? Our continuously weak job market. And the upcoming Presidential election also adds to the uncertainty.

Frugality is a Fixture in Consumer Finances. Along with the relatively robust increase in consumer confidence in September, we also witnessed similar increases in those focused on practical purchasing and buying just the necessities. In fact, both indicators are in line with what we saw a year ago, when confidence was just 23%. So yes, Virginia, despite the more positive outlook for the economy, consumers are still being very cautious with what they spend – even as we look forward to the holiday shopping season.

Expect holiday shoppers to stick to budgets, avoid impulse buys, continue smart shopping strategies, such as couponing, sales/promotions, and comparison shopping, as gift-buying commences. Frugality continues to be the name of the game with consumers because they know the economy isn’t “fixed.” Paying down debt and reducing spending remain fiscal priorities headed into the final three months of 2012, while plans to increase savings reached a six-year September high last month, so it appears that consumers may be preparing for holiday shopping as well as those everyday unknowns.

Pricing uncertainty in key areas, like grocery, gas, and apparel, continues to be of concern with consumers. An increasing number of shoppers are relying on their credit cards more compared to September 2011 when purchasing such staples – so we are still seeing signs of struggling consumers. (i.e. Holiday ’12 won’t herald a season of “recovery.”)

However, if it can be avoided, shoppers won’t make this Christmas on credit. Year over year, fewer are paying off just the minimum monthly balance on their cards, while we’ve seen a slight rise in those carrying $0 average monthly balances. The past four years have been a tough road for consumers, but they do appear to be focusing on not falling back into the lax spending/savings patterns that got them into a mess back in 2008.

Consumers Know They Have the Upper Hand with Retailers. Can we call this retail transparency? The rising popularity of mobile devices has taken much of the mystery out of shopping for customers holding a smartphone or tablet. They can compare prices, check availability, and even click “buy” from virtually wherever they are located, and shoppers will work all angles – online, instore, mobile, social media, coupon sites, direct mail, email, and ad circulars – to make sure that their holiday spending remains on budget. It’ll be a spending game that consumers want to win.

However, we know that all retailers can’t compete on low price alone [I’m looking at you, Best Buy.] Great customer service and personal rapport with shoppers will be key in driving traffic to retailers who aren’t low-price providers. Product selection, availability, and brand assortment – something department stores having really honed in on in the past few years – will also serve to turn shoppers’ heads this season. “Cheap is chic” is SO 2008; today’s shoppers want value and are willing to pay a little more for quality – as long as they can use a coupon.

This post originally appeared on Forbes.com as a contribution to the Prosper Now blog.

Generation Gap: Withdrawing Trust

October 9, 2012 1 comment

Do you trust your bank? Or do you stash your cash inside the mattress? We asked Americans how they felt about their personal bank and the federal banking system. Nearly 3 in 4 (73.8%) said they can count on their local bank while fewer (39.4%) put stock in the U.S. banking system as a whole. Interestingly, trust levels vary by generation:

It seems as though older Americans have more trust in their local bank while youngsters are more trusting of the United States banking system as a whole, compared to other generations.

Gen Yers are also more optimistic that recently announced lower interest rates will help the economy. 31.1% of these young adults are more or much more confident in the housing market as a result of the Fed’s interest rate adjustment. 25.3% say the same about the economy overall along with 23.1% who show a boost of confidence in the job market. Members of Gen X, just one generation older, are less likely to be confident in all three areas:

Perhaps Gen Y is more confident because this age segment is the most likely to take advantage of lower interest rates. 61.2% of members of Gen Y plan to make some type of life change as a result of the Fed’s announcement: 22.4% say they are likely to buy a car, 20.9% are in the market for a home and 20.5% plan to go [back] to school. Most members of older generations do not plan to make any life changes at this time.

For more fresh insights on American consumers, including confidence in the economy, expectations for gas prices and even Election 2012 updates, be sure to check out the complimentary American Pulse™ InsightCenter!

Source: American Pulse™ Survey, September 2012 #2, N=3282

© 2012, Prosper®

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