Insights Into the Changing U.S. Consumer Market

SIS International Custom Research INSIGHTS INTO THE CHANGING US CONSUMER MARKET 2008…… Going Forward Presented by SIS International Research 2008 Navigate the Global Economy™ 1

OUTLINE OF PRESENTATION ! SIS Insights – The Changing US Consumer Market ! SIS Capabilities and Industry Expertise ! Our Research Methods and Capabilities ! SIS Online Research Panels ! Benefits of Using SIS International Research Navigate the Global Economy™ 2

SIS INSIGHTS THE CHANGING US CONSUMER Navigate the Global Economy™ 3

SIS INSIGHTS – THE CHANGING US CONSUMER • Market Drivers: – The Aging Baby Boomers – What happened to Generation X? – The Powerful Force of Generation Y – Growing Hispanic Culture and Market Segment – Changing US Shopping Patterns – Changing US Retail Distribution Patterns Navigate the Global Economy™ 4

BABY BOOMERS • The Aging Baby Boomers: – Post World War II births 1946-1964 – Approximately 77 million people " High level of income [$64,700 Median Household Income] " High level of education [46% are college educated " High percentage of home ownership [57% home ownership] Navigate the Global Economy™ 5

BABY BOOMERS (cont.) • The Aging Baby Boomers (cont.) – Most do not want to retire in their 50’s and 60’s • Over 80% intend to keep working, and 56% of them hope to do so in a new profession. For many, the new job would be in community service – Many are currently being downsized from companies – 16.4% or 5.6 million of Baby Boomer workers aged 50+, were self- employed. Navigate the Global Economy™ 6

BABY BOOMERS (cont.) • Implications of the Aging Baby Boomers – Increased mobility to warmer climates in the southeast and southwest – Simplification of lifestyles; “Less is More” " Not as loyal to brands as same age group in decades past – Baby Boomers are seeking: " Streamlined financial services " Smaller homes – yet multiple homes " Alternative healthcare methods – reduction in medical benefits " Part time jobs to supplement their income for retirement Navigate the Global Economy™ 7

BABY BOOMERS (cont.) • Immigrants make up 12% of “early boomers” (born 1946-55) and 15% of “late boomers” (1956-64) • Control 70% of the total net worth of American households - $7 trillion of wealth • Own 80% of all money in savings and loan associations • Spend more money disproportionately to their numbers than any other age group • Watch television more than any other age group • Read newspapers more than any other age group • Account for a dramatic 40% of total consumer demand Navigate the Global Economy™ 8

GENERATION X • What Happened to Generation X? – Generation X is defined at those children born from 1963-1978 and is currently age 28-42, the primary earning years. – This segment is now turning “30” and “40” – Sons and daughters of the women's liberation movement in the 1970s and grew up in day care centers and child care surrogate parents – Are more conservative and more serious vs. the upcoming Generation Y market segment – Yet – will ultimately inherit the baby boomers’ lifetime savings and investments Navigate the Global Economy™ 9

GENERATION X (cont.) • Implications for the Generation X Market Segment in the US – More “diagnostic” research is needed to determine their values, product preferences, psychographics, etc. – The “mobility index” of this generation needs to be determined and tracked – Brand preferences can be “polarized” as they are “sandwiched in” between the Baby Boomers and Generation Y in the US – It is important to segment this age group rather than merge them in with the Generation Y or Baby Boomers generation Navigate the Global Economy™ 10

GENERATION X (cont.) • In 1970, 47% of Boomers between 18 and 24 lived with their parents • In 1992, 54% of Xers between 18 and 24 lived with their parents. An increase of 15%. • In 1975, the median age for first marriages among Boomers was 23.5 years for men and 21.1 years for women. • In 1992, the median age for first Xer marriages was 26.5 years for men and 24.4 years for women. Navigate the Global Economy™ 11

GENERATION Y • The Powerful Force of Generation Y – 1982 – 2002 – Sometimes known as the “Millennials” – Are technologically literate and “connected” to the internet – Have an extremely high degree of “global brand awareness” – Are “indulged” by their parents – Are less driven by “monetary goals” and have a moderate – high degree of awareness of social and environmental issues – Have a “sense of adventure” – “Know what they want, when they want it and how to get it” Navigate the Global Economy™ 12

GENERATION Y (cont.) • Implications of The Powerful Force of Generation Y – Impact on the new design of products [everything from iPods, clothing, cars they want to drive, retail stores they want to frequent, etc.] – Less influenced by their parents than previous generations – New product development and design research should be researched at this age Navigate the Global Economy™ 13

GENERATION Y (cont.) • 70.4 million youth, ages 5-22, composing approximately 26% of the US population. • 75-98% of the teenagers have a computer at home, depending on HHI. – ~ 75-80% of have access to the Internet from home. • Teenagers have an average of $100/month disposable income. • 15% HS students have a co-signed credit card; 11pc have their own • 30% of teenagers have checking accounts • They feel “crunched” for time. Navigate the Global Economy™ 14

Some characteristics of the generations • Matures (prior to 1946) • Generation X (1965-1980) – Dedicated to a job they take on – Work to live – Respectful of authority – Clear & consistent expectations – Place duty before pleasure – Value contributing to the whole • Baby boomers (1946-1964) • Gen Y/Millennials (1981-1994) – Live to work – Live in the moment – Generally optimistic – Expect immediacy of technology – Influence on policy & products – Earn money for immediate consumption Navigate the Global Economy™ 15

HISPANIC CULTURE AND MARKET SEGMENT • The Growing Hispanic Culture and Market Segment – “Spanglish” is the third language of the US – 35.3 million people, or 12.3% of the US population (2000), up 57.9% from 1990 – Projected to reach 59.8 million people by 2020 or 17.8% of the US population – Compared to other immigrant cultures, the Spanish immigrant culture in the US tends to keep their language and culture – Hispanics are increasing their financial wealth in the US and their political “clout” – Market research needs to segment their preferences for new products, brand preferences and lifestyles and values Navigate the Global Economy™ 16

HISPANIC CULTURE AND MARKET SEGMENT (cont.) • Implications of the Growing Hispanic Culture and Market Segment – Hispanic consumers have distinct retail store and brand preferences – Hispanic Generation X and Y are “vastly” different from Hispanic baby boomers who migrated to the US – The Hispanic market segment needs to be researched and analyzed vis-à-vis the Caucasian, African American, Asian segments, and other ethnic segments in the US Navigate the Global Economy™ 17

CHANGING U.S. SHOPPING PATTERNS • The Rise of “Lifestyle Shopping Centers” – In 2005, approximately 191 million shoppers shopped in malls each month in the US, up from 181 million in 2004 – Women shoppers outnumber men shoppers 2:1 and men spend an average of 10 minutes less per mall visit – In 2005, shopping center “inclined sales” totaled $2.1 trillion, up from $2.0 trillion in 2004 – The trend: toward building outdoor shopping areas and adding lifestyle sections to existing enclosed malls – The lure of entertainment, shopping, and food in an outdoor center Navigate the Global Economy™ 18

THE CHANGING US SHOPPING PATTERNS (cont.) • Changing US Retail Distribution Patterns – Shoppers are now turning to shopping in “Town Centers” in the US – “Town Centers” are open air malls vs. Regional Centers which are enclosed malls – “Lifestyle Centers or Town Centers” are smaller [150,000 – 500,000 square feet] vs. [400,000-800,000 square feet] than a regional center mall – Town Centers offer upscale and national and local specialty stores ; dining and entertainment [e.g. Whole Foods, The GAP, Barnes and Noble, etc] vs. Regional Malls which offer fine line department stores, mass merchandisers, mainline specialty stores and food courts [e.b. Macy’s, Sears, etc.] – Men and women, who are not big shoppers will come to town centers for dining and entertainment Navigate the Global Economy™ 19

THE CHANGING US SHOPPING PATTERNS (cont.) • The Future for Shopping in the US – Typical malls, or “single use retail environments” will disappear as “economic hubs” grow to include residential and office buildings – Retail and entertainment centers are the future – This evolution will have an impact on today’s retailers Navigate the Global Economy™ 20

MARKET RESEARCH IMPLICATIONS • Implications for US Market Research – Consumers need to be surveyed regarding their retail shopping patterns and preferences – Increased intercepts in a variety of malls and “open” town centers to gain insights into representative consuming habits Navigate the Global Economy™ 21

SIS International Statistical Tracking System On-going Environmental Scan On-going Monthly Tracker Indices A B C D Statistical & Segmentation Analysis Net Result: • Draw comparisons between segments • Draw comparisons between regions • Ability to analyze month to month comparisons Navigate the Global Economy™ 22

Navigate the Global EconomyTM • Learn more at the SIS Web Network: – www.sisinternational.com – www.sisinternationalresearch.com – www.sispharma.com – www.sismiddleeast.com – http://easterneurope.sisinternationalresearch.com – www.industrysynthesis.com – www.marketintelligences.com – www.sisglobalresearch.com – www.chinageny.com Navigate the Global Economy™ 23

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Insights Into the Changing U.S. Consumer Market

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Insights Into the Changing U.S. Consumer Market — Presentation Transcript