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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.

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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:

Women's Clothing - Kohl's v. Walmart

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.

Women's Clothing - Store Shopped Most Often (Top 5)

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%.

Women's Clothing - Consumer Equity Index (Female Shoppers)

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.

FYU: Sporting Goods & Exercise Equipment

With the college bowl match-ups all over the airwaves and that other little game – the Super Bowl – soon to be played, we thought it would be apropos to bounce down the Sport Goods & Exercise Equipment section of the monthly Consumer Intentions & Actions® survey, courtesy of our Retail Ratings Reports.

For Your Understanding today, we’re going to take a look at the top competitors in this category: Walmart and Dick’s Sporting Goods. Much like the Women’s Clothing segment, Walmart has experienced a little difficulty when it comes to maintaining its #1 ranking in Sporting Goods:

Sporting Goods Share, Dec 2010 - 2011

As you can see in the chart above, Walmart placed second to Dick’s in November, while the two retailers were pretty evenly matched in January, February, August, September, and December 2011.

So where are the weaknesses in Walmart’s game? For this, we can turn to our latest Retail Ratings Report. Just on the first few pages of this handy guide*, we can see that:

– Dick’s outscores Walmart in both the $50,000+ and $75,000+ income shopper segments (and by a wide margin);
– Among those planning to spend more on Sporting Goods over the next 90 days, Dick’s is the preferred retailer over Walmart. Walmart leads among shoppers planning to spend less;
– Dick’s is the favored Sporting Goods retailer in two out of the four census regions: Northeast and Midwest;
– Walmart’s got a Southern stronghold and places second to Big 5 Sporting Goods out West.

But let’s look a bit deeper 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 Dick’s indicate that the big box baller is growing among its core shopper group – those earning $50,000+/year – as well as Female shoppers, while Walmart is declining in each of these groups. A graphical representation of the CEI for the top five retailers in Sporting Goods/Exercise Equipment (among $50,000+ income households):

Sporting Goods, Consumer Equity Index, $50K+ Income Shoppers

Check out Walmart in this chart: it’s the lone Top 5 store for this segment in the red (read: the only one of these retailers seeing a decline among $50,000+ income shoppers). #sadface

Now you understand: With Dick’s and the rest of its big box buddies growing customer share among higher income consumers (who, let’s face it, typically have more money to spend on these types of items), Walmart’s getting left out in the cold, which is affecting the discounter’s overall standing among the general population.

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

Source: Consumer Intentions & Actions® Survey, DEC-10 – DEC-11

* 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.

FYU: Women’s Clothing

November 16, 2011 2 comments

For Your Understanding this week, let’s take a closer look at the Women’s Clothing category…

It was pretty big news this month when – for the first time in the 10 year history of our Monthly Consumer Survey – Kohl’s overtook Walmart as the store shopped most often for Women’s Clothing. Since late 2002, Kohl’s has been climbing steadily in this category, while Walmart has dropped precipitously since its early 2000s glory days:

Women's Clothing - Kohl's v. Walmart Shoppers

To get a better understanding of where Walmart has been crumbling, we can turn to our latest Retail Ratings Report. Just on the first few pages of this handy guide*, we can see that:

– Walmart is out-shopped by Kohl’s, Macy’s, and JC Penney among those earning $75,000+ per year (and even among though earning $50,000+/year);
– Walmart’s sweet spot of Women’s Clothing customers earn less than $50,000 per year;
– Kohl’s trumps Walmart in the Northeast and Midwest;
– Walmart enjoys loyalty in the South, while it’s a closer call between the two retailers out West.

But let’s look a bit deeper 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 Kohl’s indicate that the department store darling is growing among the general population (Adults 18+), Women, Men, those earning $50,000+/year, as well as those earning less than $50,000/year (Walmart’s core shopper group). And, while Kohl’s is climbing across the board, Walmart is declining in each of these groups. A graphical representation of the CEI for the top five retailers in Women’s Clothing (among female shoppers):

Women's Clothing - Consumer Equity Index™ (CEI)

Here, we can see that Walmart is experiencing a 6% decline with Women, while Kohl’s is growing 4.5%. Among the top five retailers, JC Penney is faltering the most (at 12.5% decline). Macy’s is relatively flat, while Target is enjoying 5% growth.

Now you understand: With Kohl’s growing in each major consumer group while Walmart declines, it was inevitable that these top retailers would tussle for #1. It should be an interesting New Year for this category…stay tuned.

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

Source: BIGinsight™ Monthly Consumer Survey, NOV-10 – NOV-11

* 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.

© 2011, Prosper®

BIGinsight™ is a trademark of Prosper Business Development Corp.

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