FYU: Department Store Domination?

As readers of our monthly Executive Briefing are already aware, 2012 has been a pretty exciting year for Kohl’s when it comes to the Women’s Clothing store shopped most often by the more than 8,000 respondents in our Monthly Consumer Survey. When we last visited this category in November 2011, Kohl’s had – for the first time in the history of our 10 year survey – surpassed Walmart as the top store shopped for this category. While discounter Walmart had the edge in January, April marked the third month in a row that Kohl’s has led this category – and it looks like the department store darling might be widening the gap between itself and the big discounter:

So what’s the deal with Walmart? Where is Kohl’s growing? And, are JC Penney or Macy’s posing immediate threats to the top two? For Your Understanding this month, we’re taking the Women’s Clothing catfight to the mats, courtesy of our Retail Ratings Reports*.

In just the first few pages of this handy guide, we can see that:
–  Among the fashion forward set – a faction growing in number – Macy’s is shopped most often (16.6%), followed by Kohl’s (11.2%), and JC Penney (8.2%).
–  Walmart’s core shoppers earn under $50,000 – and the discounter leads with these wage earners. However, among both the lucrative $50,000+ and $75,000+ income groups, Kohl’s, Macy’s, and JC Penney are the top stores shopped for Women’s Clothing, respectively.
–  Kohl’s (11.2%) and Macy’s (10.8%) also lead when it comes to 18-34 year old customers. Walmart’s strength lies with consumers 35-54 and 55+, though the discounter still plays second fiddle to Kohl’s in both cases.
–  Kohl’s and Macy’s are the top Women’s Clothing stores shopped in the Northeast, respectively, while their roles are reversed out West. Kohl’s (#1) and Walmart (#2) control the Midwest, and down South, Walmart maintains its stronghold (followed by Kohl’s).
–  While Kohl’s has recently overtaken Walmart for the top spot in Women’s Clothing overall, it appears that Macy’s may enter the mix as 2012 gets underway. From January to April 2012, share of Adults 18+ shopping the department store standard have increase 60%+ to a current 10.0%.
–  Finally, don’t discount JC Penney. Thanks to the retailer’s promotion-less new Fair & Square strategy, shopper interest has perked up in 2012 – in the short term, at least.

But let’s look a bit deeper at the growing divide between Walmart and Kohl’s with the Consumer Equity Index™ (CEI). The CEI – available exclusively within the Retail Ratings Reports – is a year-over-year index showing growth or decline of Consumer Preference Share (the % we collect each month for the store shopped most often). Here’s a key:

CEI = 100 (flat)
CEI = 105 (5% growth)
CEI = 95 (5% decline)

Our latest CEI ratings for Women’s Clothing shows that Kohl’s – and Macy’s – are growing in customer share, while Walmart is flatlining at best. In the all-important female shopper segment, Kohl’s share has risen 14%, Macy’s has boosted a whopping 43%, while Walmart (and JC Penney) have dropped 5%.

And, recall that sweet spot of core customers for Walmart? If you were to analyze the CEI ratings for those earning under $50,000/year, you would find that both Kohl’s and Macy’s are growing in similar fashion as with the female population, while Walmart has seen a flat/meager 2% pick-me-up with this group. #departmentstoredomination?

Now you understand: It doesn’t appear that Kohl’s and Macy’s are directly poaching Walmart shoppers – they are growing their own customer bases (especially females and <$50,000 wage earners), while the big W’s share remains stagnant. Department stores are buzzing with consumers for 2012, and we did witness their increasing popularity for Valentine’s Day, Easter, and Mother’s Day. With this topic trending with shoppers, we could see some additional change-ups in the Women’s Clothing sector as 2012 progresses.

Bottom Line: Perhaps Walmart just isn’t keeping up with The Changing American Consumer.

For more information on this data, please contact BIGinsight™.

Source: BIGinsight™ Monthly Consumer Survey, APR-11 – APR-12

* Retail Ratings Reports are available monthly for the following categories: Women’s Clothing, Men’s Clothing, Children’s Clothing, Shoes, Linens/Bedding/Draperies, Electronics, Hardware, Children’s Toys, Sporting Goods, Groceries, Health & Beauty Care, Prescription Drugs.

© 2012, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

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