STORES Magazine - June 2008 - (Page 31)

Consumer 360° Consumers Making Informed Choices Upon review of indicators in mid-May, two of the biggest threats to the economy: 1) fallout from turmoil in the credit market, 2) and surging energy prices. The housing market continues to struggle and most of the financial markets are showing losses. The price of oil hovers around $120-125 a barrel and market analysts are commenting that gas could reach $4.50 per gallon on average across the U.S. this summer. Many things are in flux, and it is hard for consumers to understand all the dynamics, therefore, consumer behaviors and their purchasing is mixed. Under these continued turbulent financial times, consumers have to make choices. They can shop closer to home, defer other purchases, buy generic versus brand names, or they can switch store type from department to discount, or purchase apparel at the same place they purchase groceries. A recent study from the BIGresearch May 2008 Consumer Intentions & Actions Study (CIA), that year-over-year, consumers are changing their behaviors to cope with increasing gas prices and shopping closer to home and taking fewer shopping trips, shopping for sales more often and using coupons more. What were the reasons for switching stores? (Check all that apply) April 2007 April 2008 Index Decline of Store Appearance 4.4% 8.5% 51 Did not have newest fashions 3.7 7.1 52 Difficult to Park 0.0 0.0 0 High Prices 21.5 30.6 70 Inconvenient Location 13.7 28.1 49 In-Store Experience 4.7 3.8 124 that customer service and knowledge of what choices consumers are making is needed. For department stores and discount stores most loyal shoppers, high prices and inconvenient locations are the top two reasons for switching store type. Fundamentals are still in play Consumers want great service, ability to find the products they want – at the right price and at a convenient location. This intense competition has caused retailers to make choices, close locations and focus on the consumer. Some thoughts for retailers: do not let up on customer service and do everything to increase loyalty with your most loyal shoppers. Make sure that you are marketing and promoting best pricing and how convenient your locations are to consumers. Companies like Wal-Mart have also made it easier for consumers to spend, such as cashing the stimulus checks recently. To recognize, encourage, and reward excellent in customer service, American Express and the NRF Foundation, with the assistance of BIGresearch, conduct an annual customer service survey to gauge consumer attitudes and to provide a list of the retailers providing the best customer services. The NRF Foundation/American Express Customer Service Awards are presented each January at the NRF Annual Convention & EXPO in New York City. Coming up: Watch for the September issue of STORES magazine, for the next installment of Consumer 360, an on-going look at the world of customer Sponsored by service. Service versus price With consumers left with less disposable income to spend, Wal-Mart made news by cashing the recent government stimulus checks at their store locations making it easier for consumers to spend with them. Wal-Mart was using the consumers ‘taking less shopping trips’ to their advantage and this helped Wal-Mart convert sales from grocery to other categories like apparel. In April 2008, Wal-Mart in women’s clothing leads with 11.3% shopping there most often, up from 10.9% one year ago. Second place Kohl’s increased from 7.6% in 2007 to 7.9% in 2008 and JC Penney, Macy’s and Target round out the top five. Women are migrating to discount stores from department stores in an effort to make fewer shopping trips and save money at discounts. Price is becoming more important to women who shop most often at department stores and almost even with selection and quality. Women who shop at discount stores are there for price and location. With movement back and forth between department stores and discount stores, retailers need to understand ADVERTORIAL

Table of Contents Feed for the Digital Edition of STORES Magazine - June 2008

STORES Magazine - June 2008 Contents Executive Editor's Page President's Page Tesco Tests Carbon Labels What Shoppers Think 10 Things You May Have Missed Numbers Worth Counting Full Price/Markdown Retail People Cover Story: Boom - or Bust Green Retailing Concept2Watch Online Marketing Building Traffic Water Management Branding Digital Marketing Loyalty Programs Special Report: Taking on Teens Supply Chain - Robo Crop Human Resources Supply Chain - Directory Assistance Loeb Retail Letter Arts Update Point of View NRF News Retail Crossword Retail Industry Calendar Last Laugh

STORES Magazine - June 2008

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