Table of Contents
Executive Summary
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- The issues
- Fierce competition is challenging value-focused retailers
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- Figure 1: Retailers shopped, August 2017
- Budget shoppers are more focused on price, less on brand loyalty
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- Figure 2: Influence on shopping, August 2017
- The opportunities
- Unlocking store or generic brands
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- Figure 3: Budgeting actions, August 2017
- Appealing to all types of budget shoppers
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- Figure 4: Budgeting behaviors, by age and household income, August 2017
- What it means
The Market – What You Need to Know
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- Financial situations could impact consumers’ need to budget
- Planning ahead
Market Factors
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- Optimistic market factors could impact consumers’ willingness to spend
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- Figure 5: Consumer Sentiment Index, January 2007-September 2017
- The election has made some rethink their finances
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- Figure 6: Election impact on household income and cost of living, by select demographics, May 2017
- Diverse households lead to diverse shopping needs
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- Figure 7: Number of households, by race and Hispanic origin of householder, 2006 and 2016
- Preparing for the unknown
Key Players – What You Need to Know
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- Budget shoppers are frequenting mass and grocery
- Value-focused retailers feel the pressure of rising competition
- A shift away from name brands
What’s Working?
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- Changes at mass and grocery are capturing the attention of budget shoppers
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- Figure 8: Retailers shopped, August 2017
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- Figure 9: Walmart email campaign, August 2017
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- Figure 10: Amazon email campaign, September 2017
What’s Struggling?
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- Value-oriented channels are losing budget shoppers to competitors
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- Figure 11: Retailers shopped, August 2017
What’s Next?
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- New competition arises from current players
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- Figure 12: Target email campaign, September 2017
- An emergence of affordable, nameless brands could threaten some current store brands
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- Figure 13: Influence on shopping, by age, August 2017
- Publicizing assortment, not price, at value-oriented retailers
- Helping budget shoppers narrow down their options
The Consumer – What You Need to Know
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- Most consumers are budgeting more or the same
- Budget shoppers enjoy deal-seeking and are planning for the future
- Mass and grocery are preferred by budget shoppers
- Experiences are worth splurging on
Budgeting Behaviors
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- Budgeting means different things, to different people
- Few consumers rarely budget
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- Figure 14: Budgeting behaviors, August 2017
- Younger consumers are more budget conscious, regardless of income
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- Figure 15: Budgeting behaviors, by age and household income, August 2017
- Retirees and older consumers not tied to a budget
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- Figure 16: Budgeting behaviors by select demographics, August 2017
- Blacks and Hispanics are more likely to budget
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- Figure 17: Budgeting behaviors, by race and Hispanic origin, August 2017
Reasons for Budgeting
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- Most consumers enjoy the thrill of deal-seeking
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- Figure 18: Reasons for budgeting, August 2017
- Long-term planning and debt reduction key budget drivers
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- Figure 19: Reasons for budgeting, by gender, August 2017
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- Figure 20: Reasons for budgeting, by gender and current marital status, August 2017
- Older consumers enjoy the hunt for deals
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- Figure 21: Reasons for budgeting, by age, August 2017
- Blacks and Asians are saving, but for different reasons
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- Figure 22: Reasons for budgeting, by race and Hispanic origin, August 2017
- In their own words
Retailers Shopped
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- Budget shoppers prefer mainstream channels and Amazon
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- Figure 23: Retailers shopped, August 2017
- Older shoppers stay true to routine and shop grocery
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- Figure 24: Select retailers shopped, by age, August 2017
- Lower-income consumers seek value at mass merchandisers, while higher-income ones prefer Amazon
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- Figure 25: Retailers shopped, by household income, August 2017
- Heavy budgeters shopping value-oriented retailers
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- Figure 26: Retailers shopped, by age, August 2017
- Blacks and Hispanics seek value, while Asians aren’t deterred by membership fees
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- Figure 27: Retailers shopped, by race and Hispanic origin, August 2017
- Budget shoppers describe their favorite stores
Budgeting Actions
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- Store brands, discounts, and low-priced items capture most budget shoppers’ interest
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- Figure 28: Budgeting actions, August 2017
- Younger adults frequently shop discounted items and store brands
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- Figure 29: Budgeting actions, by age, August 2017
- Coupon use spans generations
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- Figure 30: Budgeting actions, by generation, August 2017
- Hispanics regularly practice more budgeting actions
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- Figure 31: Budgeting actions, by race and Hispanic origin, August 2017
Influence on Shopping
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- Many budgeters are willing to take a risk or shop around for the best prices
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- Figure 32: Influence on shopping, August 2017
- Younger budget shoppers are less loyal to brands
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- Figure 33: Influence on shopping, by age, August 2017
- Parents are willing to wait for the right prices
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- Figure 34: Influence on shopping, by select demographics, August 2017
- Asian non-Hispanics are strategic with their shopping
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- Figure 35: Influences on shopping, by Asians, August 2017
Splurges
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- Most consumers willing to splurge on entertainment, experiences and clothes
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- Figure 36: Splurges, August 2017
- Those with higher incomes prefer splurging on experiences
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- Figure 37: Splurges, by age and household income, August 2017
- Young men splurge on fitness
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- Figure 38: Splurges, by select demographics, August 2017
- Whites value splurging on experiences, while Blacks splurge on fashion
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- Figure 39: Splurges, by race and Hispanic origin, August 2017
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Consumer qualitative research
- Direct marketing creative
- Abbreviations
Appendix – The Market
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- Figure 40: Population by race and Hispanic origin, 2012-22
- Figure 41: Households, by type, 2016
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Appendix – The Consumer
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- Figure 42: Retailers shopped, dollar stores – CHAID – Tree output, August 2017
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- Figure 43: Retailers shopped, grocery stores – CHAID – Tree output, August 2017
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- Figure 44: Retailers shopped, mass merchandisers – CHAID – Tree output, August 2017
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- Figure 45: Retailers shopped, warehouse clubs – CHAID – Tree output, August 2017
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- Figure 46: Retailers shopped – CHAID analysis, August 2017
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