What to Expect from Shoppers in 2014
Presented by:
Rachel McGuire, Senior Analyst
Kate Senzamici, Senior Analyst
Mary Brett Whitfield, Senior Vice President
U.S. Shopper FDM Webinar
February 7, 2014
Copyright © 2014 Kantar Retail. All Rights Reserved.
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howard.zimmerman@kantarretail.com
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Disclaimers
The analyses and conclusions presented in this seminar represent the opinions of Kantar Retail. The views
expressed do not necessarily reflect the views of the management of the retailer(s) under discussion.
This seminar is not endorsed or otherwise supported by the management of any of the companies covered
during the course of the workshop or within the following slides.
© Copyright 2014 Kantar Retail
Agenda: What to Expect from Shoppers in 2014
• Shopping Approaches and Spending Priorities
• Perceptions of Price Leadership
• Loyalty Programs
–Update on Safeway’s “just for U” Program
© Copyright 2014 Kantar Retail
3
Shopping Approaches and Spending Priorities
© Copyright 2014 Kantar Retail
4
Despite Macro-Economic Uncertainty, Spending
Intentions Holding Steady
Retail Spending Intentions in Coming Month Compared with the Same Period Last Year
(three-month moving average)
Spend about
the Same
Spend Much/
Somewhat Less
Spend Much/
Somewhat More
Source: Kantar Retail ShopperScape®. June 2008–December 2013
© Copyright 2014 Kantar Retail
5
Deal Seeking Continue at Top of the List
… but perhaps less top of mind as behaviors ingrained in
routines
Planned Changes in Shopping Behavior for Year Ahead
(among all primary household shoppers)
Behavior Changes
2013
2014
Type of Behavior
Taking advantage of good sales/deals
Buying only things I truly need
Using more coupons
Buying fewer things
Doing more price comparison shopping before purchasing
Shopping less often
Using/keeping items longer before buying replacements
Buying only items needed in the near term
Shopping more at discount and value retailers
Postponing more purchases
Buying less expensive versions of products
Buying more store brands instead of national or high-end brands
Buying fewer luxury items
Shopping online for more things
Shopping online more often
Trading down to less-expensive brands
Using smart phone to compare prices while in stores
Switching some purchasing to "auto-replenishment" programs
49%
45%
41%
34%
29%
29%
25%
25%
24%
19%
19%
18%
18%
14%
13%
12%
7%
1%
47%
45%
41%
38%
29%
31%
25%
26%
24%
21%
20%
18%
19%
15%
15%
12%
7%
1%
Deal-Seeking
Limiting
Deal-Seeking
Limiting
Deal-Seeking
Limiting
Limiting
Limiting
Trading-Down
Limiting
Limiting
Trading-Down
Trading-Down
Moving Online
Moving Online
Trading-Down
Deal-Seeking
Moving Online
Source: Kantar Retail ShopperScape®, October 2012 and October 2013
© Copyright 2014 Kantar Retail
6
Have-Not Shoppers More Likely to Plan More
Changes
Planned Changes in Shopping Behavior for Year Ahead (2014)
(among all primary household shoppers)
Behavior Changes
Taking advantage of good sales/deals
Buying only things I truly need
Using more coupons
Buying fewer things
Doing more price comparison shopping before purchasing
Shopping less often
Using/keeping items longer before buying replacements
Buying only items needed in the near term
Shopping more at discount and value retailers
Postponing more purchases
Buying less expensive versions of products
Buying more store brands instead of national or high-end brands
Buying fewer luxury items
Shopping online for more things
Shopping online more often
Trading down to less-expensive brands
Using smart phone to compare prices while in stores
Switching some purchasing to "auto-replenishment" programs
Have Nots
Haves
46%
48%
42%
39%
30%
34%
27%
29%
27%
23%
25%
21%
19%
14%
14%
14%
6%
1%
48%
39%
40%
35%
26%
27%
24%
23%
19%
19%
13%
13%
18%
16%
17%
8%
10%
1%
Type of Behavior
Deal-Seeking
Limiting
Deal-Seeking
Limiting
Deal-Seeking
Limiting
Limiting
Limiting
Trading-Down
Limiting
Limiting
Trading-Down
Trading-Down
Moving Online
Moving Online
Trading-Down
Deal-Seeking
Moving Online
Note: Have-Not shoppers have annual household income less than $60K’; Have shoppers have annual household income of $60K+
Source: Kantar Retail ShopperScape®, October 2013
© Copyright 2014 Kantar Retail
7
Shoppers Signaling More “Limiting” in 2014
Plus online shopping more likely to be in the mix
Planned Changes in Shopping Behavior: 2014 vs. 2013
2013
2014
– Buying fewer things
34%
38%
– Shopping less often
29%
31%
– Postponing more purchases
19%
21%
(among all primary household shoppers)
Growing participation vs. last year:
• Limiting Behaviors
Note: Yellow shading indicates a significant difference between 2013 and 2014 (90% confidence level)
Source: Kantar Retail ShopperScape®, October 2012 and October 2013
© Copyright 2014 Kantar Retail
8
Store Set Contracts in 2013
Average Number of Retailers Shopped in Past Four Weeks*
(among all primary household shoppers)
12.4
12.4
11.1
11.1
11.2
11.2
10.7
*Inclusive of visits to stores and websites; averages are for Q1–Q3 of each year.
Source: Kantar Retail ShopperScape®, January 2007–October 2013
© Copyright 2014 Kantar Retail
9
Evidence that Shoppers Drawing Boundaries
Mounts
• Data points indicate that
“Limiting” is on the agenda
– Fewer retailers shopped for
back-to-school
– Fewer retailers shopped for
holiday gift giving
– Lower rate of category
purchase incidence across
myriad discretionary and nondiscretionary categories in Q4
Source: Kantar Retail ShopperScape®, December 2010–2013
© Copyright 2014 Kantar Retail
10
Categories that Maintained Q4 Purchaser Base
Categories with Flat Category Purchaser Incidence Rate Q4 2013 vs. Q4 2012
(among 80+ categories tracked )
• TVs
• Video game system
• Personal computers
• Tablet computers
• Printers
• Small and major appliances
• Craft/hobby/arts supplies
• Sporting goods
• Key home improvement categories
• Color cosmetics
• Pet food and supplies
• Beer and wine
• Vitamins
Source: Kantar Retail ShopperScape®, October–December 2013
No categories had significantly
higher purchasing rates …
© Copyright 2014 Kantar Retail
11
Staying Healthy and Organized Are Top
Spending Priorities
Spending Priorities
(% of shoppers selecting products as one of top five near-term spending priorities)
% selecting
as
top priority
24%
10%
9%
8%
7%
5%
10%
5%
5%
3%
3%
2%
2%
3%
2%
2%
1%
Source: Kantar Retail ShopperScape®, October 2013
© Copyright 2014 Kantar Retail
12
Varying Priorities by Generation Help Further
Refine Opportunities
Top 5 Spending Priorities by Generation
(as ranked by percentage of shoppers selecting products as one of top five near-term spending priorities)
Gen Y
Gen X
Boomers
Seniors
Better organize/
manage life
Stay healthy
Stay healthy
Stay healthy
Stay healthy
Better organize/manage
life
Better organize/manage
life
Save time on HH
chores
Personalized for
needs/tastes
Save time on HH
chores
Save time on HH
chores
Better organize/manage
life
Hobbies/activities
Stay fit
Hobbies/activities
Stay in home longer
Little indulgences/small
luxuries
Personalized for
needs/tastes
Personalized for
needs/tastes
Stay fit
Source: Kantar Retail ShopperScape®, October 2013
© Copyright 2014 Kantar Retail
13
Minimal Differences by Income
Opportunities across the “good-better-best” spectrum
• Haves and Have Nots have
same top spending priorities …
Key Differences in Spending Priorities:
Haves vs. Have Nots
Staying
healthy
Staying
organized
• … but a few differences farther
down the list
Source: Kantar Retail ShopperScape®, October 2013
© Copyright 2014 Kantar Retail
14
Amazon Becomes the Top Holiday Destination
Leapfrogs Target in 2011, Walmart in 2013
Note; Arrows indicate significant decline vs, holiday 2012 (95% confidence level)
Source: Kantar Retail ShopperScape®, December 2011, December 2012 and December 2013
© Copyright 2014 Kantar Retail
15
Holiday Shopping Shifts Online
Proving ground for building online shopping routines
Holidays set stage for
year-round online
shopping
Source: Kantar Retail ShopperScape®, December 2013
Budget shifted more toward
online/Cyber Week than Black Friday
© Copyright 2014 Kantar Retail
16
Online Disrupts Shopping Routines
How Approach to Shopping Has Changed in Past Year
Percent of Shoppers Indicating Statement Describes “Quite Well” or “Somewhat”
Online Disrupts
Shopping Routines
Source: Kantar Retail ShopperScape®, October 2013
© Copyright 2014 Kantar Retail
17
Perceptions of Price Leadership
© Copyright 2014 Kantar Retail
18
Price Remains Paramount in the Value Equation
Which retailers are best positioned to win with price-sensitive
shoppers looking to limit spending in 2014?
Source: Kantar Retail ShopperScape®, January 2013
© Copyright 2014 Kantar Retail
19
Walmart’s EDLP Message Reflected in Shoppers’
Price Perceptions
But how do “core”
shoppers view
these retailers?
Source: Kantar Retail ShopperScape®, November 2013
© Copyright 2014 Kantar Retail
20
Walmart Perceived Leader for Shelf-Stable Grocery
HEB slips vs. last year, while ALDI gains
Source: Kantar Retail ShopperScape®, November 2011, November 2012, and November 2013
© Copyright 2014 Kantar Retail
21
HEB Dominates in Fresh Grocery
Supermarkets in general the perceived price leaders
Source: Kantar Retail ShopperScape®, November 2011, November 2012, and November 2013
© Copyright 2014 Kantar Retail
22
Walmart Leads in Household Essentials
Many supermarkets see slight gains in price perception
Source: Kantar Retail ShopperScape®, November 2011, November 2012, and November 2013
© Copyright 2014 Kantar Retail
23
Walmart’s Lead in HBC Price Perception Slips
Walgreens and Publix make gains
Source: Kantar Retail ShopperScape®, November 2011, November 2012, and November 2013
© Copyright 2014 Kantar Retail
24
Summary of Price Leadership Winners and
Losers
Retailers Trending Up/Down In Price Leadership Perception Among Monthly Shoppers
Trending Up
Trending Down
Non-perishable grocery
• Publix
• Ahold banners
• Safeway banners
• Walmart
• Sam’s Club
Fresh grocery
•
•
•
•
HEB
Kroger banners
Publix
Safeway banners
• ALDI
• Sam’s Club
HH cleaning and paper
products
• Kroger banners
• Safeway banners
• Publix
• Sam’s Club
HBC
• Walgreens
• Publix
• Walmart
• Family Dollar
Source: Kantar Retail ShopperScape®, November 2011, 2012, and 2013; Kantar Retail analysis
© Copyright 2014 Kantar Retail
25
Two Retailers Improved Across All Categories
from 2012 to 2013
Price Leadership Perception Among Monthly Shoppers of Retailers
Source: Kantar Retail analysis and ShopperScape ®, November 2012 and November 2013
© Copyright 2014 Kantar Retail
26
Price Leadership Perceptions Differ by Key
Demographic Groups
Price Leadership Perception, by Generation and Income
(demographic groups listed significantly more likely vs. all shoppers to name
retailer/channel as price leader)
Walmart/Walmart Supercenter
Target/SuperTarget
Warehouse clubs
Drug stores
Dollar stores
Supermarkets
1
NonPerishable
Grocery
Fresh
Grocery
Have Nots1
Gen X
Seniors
Have Nots1
Gen Y
Seniors
Have Nots1
Haves1
HH
Cleaning
and
Paper
HBC
Gen Y
Seniors
Boomers
Gen Y
Seniors
Have Nots1 Have Nots1
Haves1
•
Target more likely to be perceived price leader for non-perishable grocery
among Gen X, but all other categories among Gen Y
•
•
Seniors more likely to view clubs as price leader across all categories
Walmart’s price leadership perception strongest among lower-income shoppers
and Boomers—historically, Walmart’s core shopper base
“Have Nots” are those with an annual household income of <$60k; “Haves” are those with an annual household income of $60k+
Source: Kantar Retail ShopperScape®, November 2013
© Copyright 2014 Kantar Retail
27
How Well Do Shoppers’ Perceptions Match
Reality?
$42.49
$37.89
$34.05
Total
Basket
Price
$30.81
$28.70
$28.82
Note: Data based on pricing study done by Kantar Retail. Six retailers located within a five-mile radius of each other in the Northeast U.S. were
selected. For each retailer, Kantar Retail assessed the lowest price point available to the shopper in each of 21 categories (trial sizes were
excluded) so that she could minimally meet her purchase requirement. Pricing study performed in September 2013.
Source: Kantar Retail analysis
© Copyright 2014 Kantar Retail
28
How Well Do Shoppers’ Perceptions Match
Reality?
Pretty well, with a few exceptions
Note: Actual price of total basket based on pricing study done by Kantar Retail. For each retailer, Kantar Retail assessed the lowest price point
available to the shopper in each of 21 categories (trial sizes were excluded) so that she could minimally meet her purchase requirement. Pricing
study performed in September 2013.
Source: Kantar Retail analysis and ShopperScape ®, November 2013
© Copyright 2014 Kantar Retail
29
Walmart Goes Head-to-Head on Price
© Copyright 2014 Kantar Retail
30
Shopper Showdown: Walmart vs. Key Competitors
Price Leadership Perception Among Monthly Shoppers of Retailers
(among monthly shoppers of both Walmart AND competitor, % who say Walmart/competitor is the
price leader)
Source: Kantar Retail ShopperScape®, November 2013
© Copyright 2014 Kantar Retail
31
Changing Price Leadership Perceptions
Key Takeaways
• Though we’ve seen a shift toward other aspects of “value” in
recent years, price is still the paramount consideration
–As more shoppers look to maintain spending levels and adopt some
limiting behaviors in 2014, price is likely to become more important
• Walmart has the strongest price leadership perception overall, but
there are some rocky spots
–Leadership position slipping in non-perishable grocery and HBC
–Loses (often handily) to key competitors in fresh grocery
–Price leadership position strongest among “core” Walmart
demographic groups, but growth will depend on winning with other
shoppers (young, affluent)
• Internalization of deal-seeking mentality reflected in price
leadership perception gains for many supermarkets
© Copyright 2014 Kantar Retail
32
A Look at Loyalty Programs
© Copyright 2014 Kantar Retail
33
Spending Less Most Important to Shoppers
Loyalty cardholders more concerned with value
Convenience vs. Value
Spending as little as possible top factor when shopping
~75% of loyalty card and non-loyalty card shoppers ranked it among top four
Arrows in chart indicate significant difference between column percentages at a 90% confidence level.
Source: Kantar Retail ShopperScape®, November 2013
© Copyright 2014 Kantar Retail
34
Loyalty Card Participation Mostly Steady Across
Retailers: More Have Cards vs. 2012
Balance Rewards
gaining traction since
September 2012 rollout
Increase in
participation vs.
2012
*Read as: 49% of shoppers surveyed in November 2013 reported having a CVS ExtraCare card.
Arrows indicate significant difference vs. 2012 (90% confidence level)
¹Dillons, Fry’s, King Soopers, Kroger, QFC, Ralphs, Smith’s; ²Dominicks, Randalls, Safeway, Tom Thumb, Vons;
³Giant Foods, Stop & Shop; ⁴Acme, Albertsons, Jewel, Shaw’s/Star Market
Source: Kantar Retail ShopperScape®, November 2012 & November 2013
© Copyright 2014 Kantar Retail
35
CVS ExtraCare Leads in Loyalty
15 year history and penetration give CVS the advantage
• 275 million unique cards,
70 million active users –
Well established among
CVS shoppers
Partnering with
individual suppliers
• Well developed &
need-specific programs
• Leveraging insights to
hone assortments and
drive shoppers to new
categories across the box
Source: Kantar retail analysis & store visits, company reports
Encouraging
collaboration b/t
vendors &
ExtraCare for
solutions
© Copyright 2014 Kantar Retail
36
One Year Later, Where Does
Balance Rewards Stand?
• Finding that though membership is
high, actual usage is low
– Shoppers find the
program confusing
– Not used to the points system
• Now Walgreens is ready to shift
the focus from registering to
rewarding members
Making the reward
clear for shoppers,
putting it into a
measure they
understand
– Working on educating the
shopper, making it easy for
them to optimize the system
Source: ECRM MarketGate, Kantar Retail analysis
© Copyright 2014 Kantar Retail
Kroger Continues to “Capture” Most of Own
Shoppers with Loyalty Card
Balance Rewards gains
traction, while SVU
Rewards loses shoppers
due to store closures
*Read as: 94% of Kroger shoppers have a Kroger loyalty card.
Percentage point figures indicate ppt difference from November 2012.
Source: Kantar Retail ShopperScape®, November 2012 & 2013
© Copyright 2014 Kantar Retail
38
Supermarket Loyalty Cards Still Generate Higher
Satisfaction vs. Drug
Though CVS, Walgreens are improving
Arrows indicate significant difference vs. 2012 (90% confidence level)
¹Dillons, Fry’s, King Soopers, Kroger, QFC, Ralphs, Smith’s; ²Dominicks, Randalls, Safeway, Tom Thumb, Vons;
³Giant Foods, Stop & Shop; ⁴Acme, Albertsons, Jewel, Shaw’s/Star Market
Source: Kantar Retail ShopperScape®, November 2012 & 2013
© Copyright 2014 Kantar Retail
39
But Do Loyalty Cards Really Generate Loyalty?
Capture rates mostly down from 2012
% Loyalty Cardholders Who Spend the Most on Merchandise Group at Retailer
Food / Groceries
Kroger (all banners)
Giant Eagle Advantage Card*
Ahold (all banners)
Safeway (all banners)
Winn Dixie Customer Reward Card
Food Lion MVP Card
HBC
Supervalu (all banners)
CVS ExtraCare card
Walgreens Balance Rewards
Rite Aid Wellness+
2012
2013
ppt difference
46%
44%**
-2.1
46%
43%
-3.1
30%
35%
5.0
39%
35%
-4.4
30%
31%
1.1
31%
29%
-1.9
25%
24%
-1.3
19%
19%
0.5
17%
14%
-2.9
11%
10%
-0.8
*Low sample size (n = 84)
**Read as: 44% of shoppers who have a Kroger loyalty card spend the most on food/groceries at Kroger.
Source: Kantar Retail ShopperScape®, November 2012 & 2013
© Copyright 2014 Kantar Retail
40
Discounts Most Important to Shoppers
While other factors carry pretty equal weight
39%
of Safeway shoppers rate
personalized pricing as a very
important benefit
Source: Kantar Retail ShopperScape®, November 2013
© Copyright 2014 Kantar Retail
41
Case Study: Safeway’s “just for U”
WHAT: An enhanced loyalty program that provides a more digital and
tailored shopping experience by organizing and personalizing the shopping
experience according to what is most important to each shopper
Personalized Deals
Sale items chosen for shoppers based on
basket history—shoppers get their OWN
price on items they buy often
Digital coupons, personalized shopping lists, weekly Club Card Specials
Kantar Retail Analysis
© Copyright 2014 Kantar Retail
42
JFU Demographics Steady from 2012
With some slight increases
Safeway claims more than
6 million registered just for U users (Q2 2013 conf. call)
Arrow indicates significant difference vs. previous year (90% confidence level)
*The ShopperScape® survey is conducted online and in English only; Hispanics in this sample not representative of the full U.S. Hispanic population.
Source: Kantar Retail ShopperScape®, November 2012 & 2013
© Copyright 2014 Kantar Retail
43
Safeway’s Personalized Pricing Boosts Price
Perception
Important pillar of “just for U” program
+2 ppt
+3 ppt
+9 ppt
+3 ppt
Price perception among JFU members has increased across categories from 2012
Arrows indicate significant difference vs. all Safeway Club Card members (90% confidence level)
*Includes Dominick’s, Randalls, Safeway, Tom Thumb, Vons
Source: Kantar Retail ShopperScape®, November 2012 & 2013
© Copyright 2014 Kantar Retail
44
Program Resonates with Shoppers’ Values
Deals, discounts, and ease
All JFU
Have-nots
members (< $60,000)
Sample size
Spending as little money
as possible
Getting a “good deal”
Stress-free shopping
experience
Haves
($60,000+)
296
149
147
Variety of coupons
77%
85%
70%
Personalized deals offer good prices
76%
80%
72%
Ease of adding coupons to my club card
75%
83%
68%
Personalized deals are relevant
73%
81%
64%
Ease of accessing account information
73%
82%
63%
Ability of JFU site to help plan grocery trips
65%
76%
53%
Satisfaction higher among Have-Not just for U members
Shading indicates significantly greater percentage vs. all just for U members; border indicates significantly lower percentage (90% confidence level)
Source: Kantar Retail ShopperScape®, November 2013
© Copyright 2014 Kantar Retail
45
Are just for U Members More Loyal?
Fewer shoppers report shopping, spending more since joining
just for U
Shopping
Spending
“…mobile users [are] using the site more frequently, spending more money
than those who are accessing the technology on a desktop computer.”
-Safeway Q3 2013 conf. call
Source: Kantar Retail ShopperScape®, November 2012 & 2013
© Copyright 2014 Kantar Retail
46
just for U App Usage On the Rise
Especially among Have-Not shoppers
Which of the following have you used to access or manage your “just for U” account?
Have Nots
(<$60,000)
Shading indicates significant difference year-to-year
(corresponding shopper segments); 90% confidence level
2012
Sample size 147
just for U Web site on a computer
89%
just for U smartphone app
10%
just for U iPad app
1%
None of these
8%
Source: Kantar Retail ShopperScape®, November 2012 & 2013
2013
149
80%
22%
5%
10%
Haves
($60,000+)
2012
178
84%
27%
5%
6%
2013
147
81%
32%
6%
7%
© Copyright 2014 Kantar Retail
47
Satisfaction Doesn’t Translate Into Trip Driver
just for U more of a convenient bonus—especially among
higher-income members
Arrows indicate significant difference compared with all just for U members (90% confidence level)
Source: Kantar Retail ShopperScape®, November 2013
© Copyright 2014 Kantar Retail
48
Takeaways/Implications
• High participation and satisfaction with rewards
programs still doesn’t guarantee true loyalty
• Shoppers’ needs are pretty simple: They want to spend as little as
possible, get a good deal, and have a frustration-free shopping experience.
Communicating with retailers the importance of keeping it simple will resonate
most with shoppers.
• Personalized pricing is a best in class example of keeping it simple.
Shoppers have almost unlimited options today—help shoppers simplify shopping
routines by customizing their shopping experience for them in the form of
relevant deals.
• Even with the success of personalized pricing, JFU is still not a major trip
driver for Safeway.
© Copyright 2014 Kantar Retail
49
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Questions?
Submit questions on Q&A panel on right side of screen
• Shopping Approaches and Spending Priorities
• Perceptions of Price Leadership
• Loyalty Programs
–Update on Safeway’s “just for U” Program
© Copyright 2014 Kantar Retail
51
Contact:
Rachel McGuire
Senior Analyst
rachel.mcguire@kantarretail.com
Mary Brett Whitfield
Senior Vice President
Marybrett.whitfield@kantaretail.com
T:+1 614 355 4036
www.kantarretailiQ.com
T:+1 614 355 4010
www.kantarretailiQ.com
Kate Senzamici
Senior Analyst
kate.senzamici@kantarretail.com
T:+ 1 617 912 2886
www.kantarretailiQ.com
© Copyright 2014 Kantar Retail