Retail Consumer Dynamics Study


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Acxiom’s Retail Consumer Dynamics Study provides a consumer-centric snapshot of the UK retail market based on current consumer thinking and behaviour underpinned by a wealth of demography and lifestyle intelligence.

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Retail Consumer Dynamics Study

  1. 1. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 A unique insight into how UK consumers are responding to the current economic climate and how their buying behaviour is changing as a result
  2. 2. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Table of Contents 2 Executive Summary About Acxiom 3 Introduction 4 Seven new behavioural portraits 5 Mood of the Nation 6-12 Behavioural Portraits 6-7 Secure and Better Off 8-10 Status Quo 11-12 Worse Off and Worried 13-18 Key Insights 13 Who’s Worried and Why 14 Changes in shopping behaviour by category 15 DIY 16 Grocery 17 Travel 18 Online Shopping 19-20 Summary 21 About Acxiom’s Retail Consumer Dynamics Study © Acxiom Corporation. All rights reserved. 1 June 2009
  3. 3. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Executive summary Acxiom’s Retail Consumer Dynamics Study provides a consumer-centric snapshot of the UK retail market based on current consumer thinking and behaviour underpinned by a wealth of demography and lifestyle intelligence. By generating critical attitudinal and intention data from consumers Acxiom can help retailers understand more about the mood of the nation and how that directly translates into changes in buying behaviour, both on the high street and via the internet. About Acxiom The global leader in interactive marketing services, Acxiom helps clients connect with their key audiences through deep consumer insight powering effective and profitable marketing initiatives and business decisions. Our consultative approach spans multiple industries and incorporates decades of experience in consumer data and analytics, information technology, data integration and bespoke solutions. Founded in 1969, Acxiom serves clients around the world from locations in UK, across Europe, the US and Asia-Pacific. For more information about Acxiom visit © Acxiom Corporation. All rights reserved. 2 June 2009
  4. 4. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Introduction Today’s recession has quickly reshaped the consumer landscape and traditional attitudes to shopping have changed. Retailers need to adapt to these shifts, understand the new dynamics that drive buying behaviour and effectively integrate them into their marketing plans for the future. This study from Acxiom is based on current consumer attitudes and world leading segmentation techniques that together can help retailers manage the new retailing paradigm. The result is seven new consumer groups (divided into three main categories) based on emerging patterns of shopping behaviour and financial stress together with proven demographic and lifestyle data. The groups define fundamental changes in people’s outlook, their likelihood to change what and how they spend money and provides retailers with a valuable ‘window’ into today’s fast changing consumer environment. Understanding these seven new distinct consumer groups enables retailers to align their marketing strategies with current and predicted buying behaviour – from messaging, targeting and channel selection right through to product ranging, pricing and promotion. Uniquely these clusters also have real ‘on the ground’ value because they differentiate every household in the UK. That means they can be applied to customer records on a retailer’s database and counted at store catchment level too, providing actionable insight to drive merchandising, local and instore marketing programmes and location planning activity. In what is the most acute recession in UK history, many of traditional ‘rules’ about shopping and consumers simply don’t apply and it’s vital for retailers to get behind the new emerging landscape that presents both challenges and opportunities alike. Those that do are poised to develop effective marketing strategies aimed at holding on to existing customers, maximising opportunities to those still ‘in market’ as well as onboarding new profitable buyers. © Acxiom Corporation. All rights reserved. 3 June 2009
  5. 5. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Seven new behavioural portraits can help retailers anticipate consumer response to challenging economic times Acxiom has set aside conventional demographic driven portraits to take a fresh look at consumers according to how they are currently shopping and their economic mindset. By generating critical attitudinal and intention data from consumers Acxiom can help retailers understand more about the mood of the nation and how that directly translates into changes in buying behaviour, both on the high street and via the Internet. The report includes key changes in expenditure by retail category, reveals which financial issues consumers are worried about most and provides insightful demographic and purchasing behaviour generated from Acxiom’s leading proprietary consumer database. This unique report provides a new and timely approach to segmenting and grouping customers enabling retailers to review their marketing strategies, messaging, tone of voice and promotional tactics to better align their propositions with current consumer thinking. Secure and Better Off: 38% of UK population Cautious But Confident 27.1% Protecting The Dream 10.9% Status Quo: 43.3% of UK population Business As Usual 20.3% Head Down Fingers Crossed 15.1% Up Against It 7.9% Worse Off and Worried: Interest Rate Casualties 12.8% 18.7% of UK population Life Goes On 5.9% © Acxiom Corporation. All rights reserved. 4 June 2009
  6. 6. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Mood of the Nation: Key Insights Consumer mood and attitude are key drivers in todays’ changing retail landscape. Some consumers are, as a consequence of falling interest rates, currently better off and tumbling retail prices in some sectors have also added to this trend. Of course for others job security is crucial and it is the economic indicator that can do most to undermine confidence. Not only does it transform the spending behaviour of those who lose their jobs, it also has a 'vicarious' effect on friends, family and colleagues around them. In this report Acxiom has taken a snapshot view of consumer perceptions asking each of the groups if they currently feel ‘better off’ or ‘worse off’ than they did before. The results are marked with the Protecting the Dream group more than twice as likely to feel better off than those in Interest Rate Casualties. Even more interesting is how this translates into actual shopping behaviour. As the rest of the report shows, ‘feeling better off’ doesn’t always result in buoyant purchasing and likewise those feeling the pinch are often not the first to cut back on their spending. Snapshot view of consumer mood: Feeling better off/Feeling worse off Feel Better/Worse Off Life Goes On 100 = UK average Interest Rate Casualties Over 100 = Feeling better off Under 100 = Feeling worse off Up Against It Head Down Fingers Crossed Business as Usual Protecting the Dream Cautious But Confident 50 100 150 © Acxiom Corporation. All rights reserved. 5 June 2009
  7. 7. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Behavioural Portraits Secure and Better Off Secure And Better Off represents 38% of the population. Its two segments; Cautious But Confident and Protecting The Dream both feel better off than they did before but show markedly different behaviours in response to the current climate. Cautious But Confident % of Pen portrait population Cautious But Confident aren’t going to make huge 27.1% changes in their behaviour. This affluent and well educated group understand the need to be cautious and non-essential buys will be quick to be cut-out of the family budget. These aspirational families aren’t worried about the basics like food and bills but are keen to pay down debt and do worry about mortgage repayments. Their expenditure is high across every key category and pursuing a high quality lifestyle is paramount to them. Typically they have three or more credit cards that are rarely paid off in full. They spend upwards of £90 per week on groceries in Tesco, Sainsbury or Asda and are prolific online buyers with 10 or more internet purchases in the last three months on financial services, DVDs and CDs, electronics and travel. Hot • Affluent young families and singles who feel slightly better off than Beds, Leicestershire, Cambs, previously but are more likely to try and save or pay off debt in today’s Cleveland economic climate Cold Dyfed, Devon, Herefordshire, • Spending is still robust but cautious and this group will be keeping Powys, Cornwall a tight watch on expenditure on clothing, electronics and toys • Key concerns are mortgage and loan repayments • Their typical high level of online shopping is not predicted to change. Age 18-44 Income £30-49K No c/cards 3+ Kids age 5-19 Occupation Mid Manager, Education, Medical, Professional Newspapers Guardian, Independent Hobbies Skiing, Cinema, Football © Acxiom Corporation. All rights reserved. 6 June 2009
  8. 8. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Protecting The Dream % of Pen portrait population Protecting The Dream feel better off than before but are 10.9% making significant changes in their lives to ensure they get through the recession unscathed. Price sensitive and actively looking for a deal, this group is most worried of all the segments about mortgage repayments and is likely to switch lender. Affluent with young families, they demonstrate the single biggest shift in attitude and purchasing behaviour and are seriously tightening their belts. University educated and work in the professions, they look for quality and value and use store loyalty cards together with other promotional incentives to shop smart. They frequently buy online – in particular financial services, groceries, health and beauty products and charity donations and spend upwards of £90 per week on groceries most often at Tesco, Waitrose and Sainsbury’s. Hot • Highly affluent singles or professional young families who are Northants, Mid Glam, S Glam, Aberdeenshire, Bucks, Herts financially savvy and always on the look out for a good deal Cold • Decreasing spend across every major retail category especially Tyne & Wear, W Glamorgan, food, clothes and going out Dorset, Norfolk, Dyfed, Cornwall, Northumberland • Action takers – saving more, paying off debt but ultimately feeling confident about their financial position • Protecting their income – shopping around, using loyalty cards, coupons and special offers. Age 25-44 Income £45+K No c/cards 4+ Kids age 1-10 Occupation Professional, Mid Manager Newspapers FT, Times Hobbies Skiing, Fitness, Cinema © Acxiom Corporation. All rights reserved. 7 June 2009
  9. 9. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Status Quo Comprising 43.3% of the UK population, Status Quo currently feel neither better off nor worse off. This group includes three segments, Business As Usual, Head Down Fingers Crossed and Up Against It, each of which has differing demographic profiles and buying attitudes. Business As Usual % of Pen portrait population Business As Usual aren’t about to change their spending 20.3% behaviour or way of life. Even though their major concern is job loss, they’re not about to make any cut-backs unless they have to. Typically they are moderate spenders and comprise singles and families with older teenage children who feel no better or worse off than before. Day to day living is comfortable in this group and even in the midst of a downturn they are sticking with a lifestyle they’ve worked hard to create. They’re financially savvy with a wide range of savings and investment products and tend to pay off their credit cards in full each month. Preferred grocery stores include Waitrose, Sainsbury and Marks and Spencer and their average weekly spend is £65+. Online shopping is moderate and is likely to be used purchasing flights, travel and PC products. They prefer mail order for books, charity donations and financial services. Hot Surrey, Herts, Bucks, Berks, Dorset, • Financially stable and from both top and medium income families Cambs, E Sussex who feel relatively unaffected by the economic climate. Cold • Won’t be increasing spend, especially on clothes, toys and home Tyne & Wear, Fife, Gwent, Merseyside, Mid Glam, Devon entertainment. Conversely won’t be cutting back in any category either • No significant financial worries but keeping an eye on bills, food expenses and job security • Their moderate levels of online shopping are predicted to stay the same. Age 45-64 Income £45+K No c/cards 4+ Kids age 16+ Occupation Professional, Education, Medical, Middle Manager Newspapers Guardian, Independent Hobbies Rugby, Golf, Foreign Travel © Acxiom Corporation. All rights reserved. 8 June 2009
  10. 10. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Head Down Fingers Crossed % of Pen portrait population Head Down Fingers Crossed is one of the most worried 15.1% groups with real concerns about household bills, job security and loss of interest on their savings. Memories of the recession in the 1970s and 80s could well be fuelling this concern. As consumers though they’re still spending and are even predicted to make moderate increases across several purchase categories over the next 12 months. Whilst they’re not cash-rich they don’t have mortgages, children at home or loans to worry about. Their outgoings are lower than for other groups and this relative economic freedom is a significant factor in their ability to keep spending. They prefer to shop locally or in the high street rather than use the internet or mail order. For groceries they use Iceland and are likely to spend less than £35 per week. Hot Middlesex, Merseyside, • Mature couples and singles who live according to their means and Tyne & Wear, Herefordshire typically neither save nor use credit Cold S Humberside, Powys, Lincolnshire, • Don’t feel better or particularly worse off right now but are in stable Hertfordshire, Derbyshire, Berkshire employment or retired, with incomes less than £20K pa • Cautious purchasing (as ever) with little predicted change on everyday categories like food and clothes • Significant worries about paying for bills, food and job loss. Age 45-64 Income £10-20K No c/cards 2 Kids age None at home Occupation Manual, Retired Newspapers Express, Sport Hobbies Collectables, Bird Watching, Grandchildren © Acxiom Corporation. All rights reserved. 9 June 2009
  11. 11. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Up Against It % of Pen portrait population Up Against It comprise young families who typically 7.9% struggle to make ends meet. They don’t feel particularly any worse off but their day to day concerns are with the basics like food and bills, even though they pursue a more hedonistic lifestyle. Buying predictions in this group are mixed and include the extremes of spending significantly more and less across every major category. Upward spending on clothes, electronics and home furnishings is marked. Conversely cut-backs on food, home entertainment and holidays are the biggest of any single group. This group doesn’t use credit cards but does have loans and debt consolidation as a key concern. They shop on price and preferred grocery stores are Iceland and Asda where they spend £35-£89 each week. They rarely buy online but use mail order for home entertainment, books and PC products. All other purchases are typically made in the high street. Hot S Yorks, Tyne & Wear, Cleveland, Merseyside, W Mids Cold • Young families already struggling with life’s basics and the most W Sussex, Surrey, Warks, worried of any group about paying loans, bills and buying food. Oxfordshire, N Yorks, Northants, Somerset Job loss is also a major concern • They don’t particularly feel worse off than before but many think they will need to spend more to maintain their current lifestyle • Buying predictions are divided in the group with both a significant increase and decrease in expenditure across all major retail categories • 50% more likely to use coupons and special promotions to save money. Age 18-34 Income £15K or less No c/cards 0 Kids age 0-10 Occupation Housewife, Retail, Manual Newspapers Star, News of the World Hobbies Fashion, Music, Cinema © Acxiom Corporation. All rights reserved. 10 June 2009
  12. 12. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Worse Off and Worried Worse Off And Worried represent 18.7% of the population and comprise two groups; Interest Rate Casualties and Life Goes On both of which feel worse off in the credit crunch primarily due to diminishing interest on savings and investments. Interest Rate Casualties % of Pen portrait population Interest Rate Casualties are ready to enjoy the fruits of 12.8% their labour. They have worked hard to accumulate a moderate pension and savings for their retirement but are now really worried about falling interest rates and how that impacts on their income long term. They’re careful consumers earning £15K pa or less and whilst they are holding down their spend on many key categories, across others like food, holidays and DIY they are predicting a moderate rise. Typically they have one credit card which they always pay off in full together with bank or building society savings. They don’t use the Internet for shopping but do buy holidays/travel, health products and CDs/DVDs through the mail. The preferred supermarkets are Somerfield and Co-op. • Typically aged 55+ with a fixed income and savings to help finance Hot their retirement Northumberland, W Glam, Norfolk, Lincolnshire, Dyfed, Devon, Cornwall • Biggest concern is the effect of the falling interest rates on their Cold investment income Middlesex, Surrey, W Yorks, • Cost cutting is expected on clothes, home entertainment and DIY Herts, Beds but many expect to see a rise in their food bills and holiday costs • See themselves as worse off over the next 12 months. Age 55+ Income £15K or less No c/cards 1 Kids age None at home Occupation Retired, Housewife, Manual Newspapers Mirror, Sport Hobbies Gardening, Crosswords, Grandchildren © Acxiom Corporation. All rights reserved. 11 June 2009
  13. 13. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Life Goes On % of Pen portrait population Life Goes On are typically retired and comfortably off. 5.9% They’ve been astute over the years in creating a retirement lifestyle that is active and fulfilling and aren’t about to put any of their plans on hold. Even though they’re worried about the recession, all their spending predictions are upward, in particular on food, clothes and going out. With a range of lump sum investments, interest rates are an obvious worry and they’re likely to also be interested in Home Equity schemes. They spend up to £49 per week on groceries, typically at Somerfield and Marks & Spencer and are most likely to have one credit card which they always pay off in full. They don’t have much track record in online shopping but this is predicted to rise over the next 12 months. Their typical mail order purchases include flights, travel, PC products and home entertainment. Hot Somerset, Norfolk, Dorset, • Retired singles who have made good provision for their retirement Aberdeenshire, Cumbria, Gywnedd Cold • The most worried group of all about the performance of their Surrey, Warwickshire, Shropshire, savings and investments Middlesex, Cheshire, Berkshire • Feeling worse off but continuing to spend – especially on food, clothes and going out with no sign of cutting back in any category • Predicted rise in online shopping. Age 65+ Income £20K or less No c/cards 1 Kids age None at home Occupation Retired Newspapers Telegraph, Express Hobbies Collectables, Bird watching © Acxiom Corporation. All rights reserved. 12 June 2009
  14. 14. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Who’s Worried and Why By understanding more about the financial pressures each of the segments is experiencing, retailers can get real insight into the mindset of audiences and engage with existing customers and potential buyers in a relevant and sensitive way. Declining interest on savings and investments is the most common concern and with the Bank of England predicting that rates will stay low well into 2010 this is a potential long-term issue. Of course job security is high on the list and the report shows it’s tradespeople, retail workers and middle-managers who currently feel most at risk of redundancy. The relationship between how consumers feel and how they behave (as described in the expenditure table below) is complex – it’s not always those who are most worried who are changing their behaviour first. However when the two datasets are used in combination they provide a powerful tool for market analysis, targeting and campaign planning. Key Financial Concerns Across the UK Struggling with the following: £ £ £ Household Mortgage Loan Saving Food bills Job security bills payments repayments interest rates Cautious But Confident Protecting the Dream Business As Usual Head Down Fingers Crossed Up Against It Interest Rate Casualties Life Goes On Indicates financial concerns in these areas © Acxiom Corporation. All rights reserved. 13 June 2009
  15. 15. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Changes in shopping behaviour by category Consumers were asked what level of increase or decrease in expenditure they were expecting to make across several different categories. Each of the segments shows significantly different changes in their shopping behaviour, even though demographically they may share a similar profile. Interestingly, one of the most affluent groups, Protecting The Dream, is cutting-back the most (and across nearly every category too). Conversely less well off segments like Up Against It (in part) and Life Goes On are decidedly not about to make downward changes in their lifestyle, even though their incomes may be under threat. The following reports describe purchasing behaviour across Electronics, Clothing, Going Out, Home Entertainment, Furnishings and Toys together with more detailed insights into the DIY, Travel and Grocery sectors. Key increases and decreases in consumer expenditure Electronics Clothes Going Out Home Ent Furnishings Toys Cautious But _ _ _ _ _ Confident Protecting the Dream _ _ Business As Usual _ _ _ _ Head Down Fingers _ _ Crossed Up Against It Interest Rate _ _ _ _ _ Casualties Life Goes On _ _ _ _ no change minor increase major increase minor decrease major decrease © Acxiom Corporation. All rights reserved. 14 June 2009
  16. 16. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 DIY: Market levels out as consumers predict no further significant decline in their spend The DIY market is changing fast and many of the big players in this sector have faced declining sales figures since as far back as 2004. The DIY mania of the turn of the century has lost some of its spark and the current recession is of course yet another hurdle for this industry. Although 2008 saw a further dip in revenue, the report shows that only two groups (Protecting the Dream and Up Against It) are predicting further cuts in their DIY spend. DIY expenditure may well have reached its bottom level and remain static as ‘No Change’ indicates for the two groups shown below. Whilst for others and in particular Interest Rate Casualties and Life Goes On, consumer predictions show 32.7% and 35.1% respectively are planning a moderate or significant increase in their DIY spend. The table below shows the predicted change in DIY spend from each of the groups together with their tenure and likelihood to actively pursue DIY as a lifestyle choice. Key increases and decreases in consumer expenditure on DIY Predicted change in DIY Incidence of DIY as Tenure spend over next 12 months a lifestyle choice Cautious But _ Homeowner Very high Confident Detached / Semi Homeowner Protecting the Dream Very high Detached / Semi _ Homeowner Business As Usual Average Detached / Semi Head Down Fingers Renting Average Crossed Flat / Maisonette Renting Up Against It High Flat / Maisonette Interest Rate Homeowner/Renting Low Casualties Bungalow / Semi Renting Life Goes On Average Flat / Bungalow _ no change minor increase major increase minor decrease major decrease © Acxiom Corporation. All rights reserved. 15 June 2009
  17. 17. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Grocery: High value spenders set to cut-back UK grocers have remained buoyant despite the recession and according to TNS Worldpanel and Nielsen sales at grocery multiples are up 6.5% year on year. There are clear signs of trading down to lower price points either within retailers or between retailers and some of the low-cost brands like Asda, Morrisons, Aldi, Lidl and Netto, continue to shine through. Interestingly it’s the two clusters that feel best off which are making the biggest cut backs in their grocery spend with up to 18.9% of shoppers predicting a moderate or major decrease in this respect. Whilst this is a concern because of their high typical weekly spend, indications from other groups show a static or upward shift in expenditure. It’s not certain if those upward shifts are due to increased basket size or in relation to the increased costs of staple groceries (which rose by more than one fifth last year), however the report shows a definitive shift in behaviour and the net results remain to be seen. Key increases and decreases in consumer expenditure on groceries Changes to food Preferred Weekly Spend Motivated to shop by expenditure supermarket (Main Shop) store loyalty card Cautious But Confident Tesco Sainsbury £90+ ✓ Protecting the Dream Tesco Sainsbury £90+ ✓ _ Waitrose _ Business As Usual £90+ Sainsbury Head Down Fingers Crossed Iceland Somerfield Under £35 ✗ Iceland _ Up Against It £50-59 Asda Interest Rate Casualties Co-op Morrisons Under £49 ✗ Life Goes On Somerfield Co-op Under £49 ✗ _ no change minor increase major increase minor decrease major decrease © Acxiom Corporation. All rights reserved. 16 June 2009
  18. 18. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Travel: Main annual holiday holds its own on the consumer shopping list It would seem that few in the UK are prepared to cut-back or forgo their main holiday this year. The report is yet further confirmation that the annual two week vacation is now perceived as a ‘necessity’ rather an ‘optional extra’ and travel experts point to long working hours in the UK and more definitive lifestyle choices as the key factors behind this shift. The only group looking to cut costs on their main holiday is Protecting The Dream where 37% of people stated this was their intention. Conversely there’s a greater incidence of increased spend from right across the spectrum, especially from Life Goes On where 45% plan to spend more. Even second and additional holidays are holding their own in the household budget and whilst in some groups there’s a definite move to save money in this respect, segments including Life Goes On and Interest Rate Casualties have over 35% prepared to up the second holiday budget even further. Changes to expenditure on holidays for 2009 Second holidays / Main annual holiday Typical holiday destinations weekend breaks Cautious But _ USA Confident Europe USA Protecting the Dream Worldwide _ _ USA Business As Usual Worldwide Head Down Fingers _ UK Crossed Europe Up Against It UK Interest Rate UK Casualties Life Goes On UK _ no change minor increase major increase minor decrease major decrease © Acxiom Corporation. All rights reserved. 17 June 2009
  19. 19. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Online shopping continues to rise Despite the downturn in the high street, to date online sales have continued to grow. In April 2009 internet sales were 14%* up on the previous year and confidence in online shopping as a way to purchase more effectively is gathering pace. The report shows the frequency with which clusters have shopped online together with their predicted change over the next 12 months and typical product purchases. More than half of the groups indicated a potential increase in online shopping, although retailers should note that Interest Rate Casualties and Life Goes On have little or no history of shopping this way and any upturn in activity is unlikely to represent a significant shift in sales. The report supports market evidence of the emergence of the Recession Shopper who hasn’t stopped buying but is using the internet for pre-purchase research and price comparison to ensure they shop more wisely. Future Trends in Online Purchasing Predicted changes in online purchasing: Online purchasing Predicted change Typical online purchases frequency _ Financial Services, Cautious But High CDs/DVDs, Charity donations, Confident Cameras/TVs etc Groceries, Protecting the Dream High Charity donations, Financial Services, Health/Beauty _ Flights/Travel, PC Products, Business As Usual High Books, Financial Services Head Down Fingers Low Flights/Travel, Crossed PC Products, Books Groceries, Books, Up Against It Medium Charity donations Interest Rate Flights/Travel, Health/Beauty, Low Casualties PC Products PC Products, Flights/Travel, Life Goes On Low TVs/Cameras, etc _ no change minor increase major increase minor decrease major decrease *Source: IMRG Capgemini e-Retail Sales Index © Acxiom Corporation. All rights reserved. 18 June 2009
  20. 20. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Summary This study is the first of its kind in the UK and is based on real answers Fast Facts from over 82,540 representative consumers combined with proven demographic and lifestyle data. The fundamental changes in the economy Online Social have made many of the traditional approaches to customer and market Networking segmentation obsolete as behaviour and attitudes take a dramatic shift. By cutting across traditional demographics, Acxiom has been able to • Up Against It create new behavioural segments that can provide retailers with fresh • Protecting The insights into how their customers are shopping today and what they Dream can expect from each of those groups over the coming months. • Cautious But Confident • Business As How to apply these results Usual The report demonstrates the complex interaction between attitude, affluence and behaviour. It provides a new way of understanding retail Using online price audiences and brings with it a wide range of practical applications for comparison sites marketing departments. • Protecting The Applied at household level, these clusters can be appended to every Dream household in the country and counted at store catchment level to understand customer groups, geographic distribution and drive • Cautious But effective marketing and merchandising initiatives. Confident • Business As Usual Marketing • Interest Rate • Protect your current customers. In conjunction with other data and Casualties analyses (transactional, pricing, channel, etc), retailers can determine the future potential of customers and the likely changes in their buying Planning to save needs over the coming year more money • Attract new customers. Retailers can use these behaviourally-defined segments to recognise new target consumers and pinpoint how best to • Protecting The reach them Dream • Cautious But • Message. By understanding current attitudes, retailers can adapt their Confident key propositions, content and tone of voice across both customer communications, acquisition campaigns and point of sale • Up Against It • Business As • ECRM. Recognise which customers are most likely to buy online, Usual the product mix typically bought via the Internet and where sales incentives might work best • Media. Determine which media can most effectively reach target segments and how to use multi channel marketing to maximise response. © Acxiom Corporation. All rights reserved. 19 June 2009
  21. 21. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 Merchandising Fast Facts • Define profitable merchandising strategies by store segment based on their catchment profile Buying environmentally • Understand the impact of price and promotion on different segments friendly products and how that relates to individual catchment areas • Support category management planning to ensure the right products • Interest Rate are in the right store Casualties • Business As • Add more weight to de-listing strategies and validate decision making. Usual • Life Goes On Local Marketing • Head Down • Understand which segments are most prevalent around individual Fingers Crossed outlets and create targeted local marketing initiatives to increase store traffic Planning to borrow more money • Align local marketing with known media preferences within the catchment area • Up Against It • Identify high potential prospects in defined geographies for on • Life Goes On and offline promotions. • Head Down Fingers Crossed • Interest Rate Location planning Casualties • Understand the potential of existing outlets according to the segments that make-up individual catchment areas • Identify new high potential geography with an over-representation of the key target clusters. Using Acxiom’s Retail Consumer Dynamics insight to evaluate the interdependent relationships of customers, products and stores, businesses can still realise increased marketing and merchandising efficiencies while embracing the real world challenges that this downturn represents. © Acxiom Corporation. All rights reserved. 20 June 2009
  22. 22. RETAIL CONSUMER DYNAMICS STUDY JUNE 2009 About Acxiom’s Retail Consumer Dynamics Study Acxiom’s Retail Consumer Dynamics Study was conceived in response to retailers’ growing need to understand more about the shifting behaviour in the high street and via the Internet. It aims to provide a consumer-centric snapshot of the UK retail market based on current consumer thinking and behaviour underpinned by a wealth of demography and lifestyle intelligence. Research method Earlier this year Acxiom included specialist questions on its online Research Opinion Poll in order to gauge the economic ‘mood of the nation’ and establish consumers’ individual spending intentions across several categories. 82,540 consumers completed these questions and the data from these answers was analysed using PersonicX® Household, Varimax Factor Analysis and Cluster Analysis to segment the data into seven key groups. The groups were then broken down by individual survey question to create a segmentation solution and further analysed using Acxiom’s proprietary data InfoBase-X® Lifestyle Universe to identify their key behavioural, demographic and lifestyle characteristics. About PersonicX® PersonicX is Acxiom’s premier segmentation solution and has been providing businesses with powerful customer insight for over five years. PersonicX takes consumer segmentation beyond traditional geodemographic classification and is built from the UK’s most accurate lifestyle databases offering the widest coverage of the population. By combining this with universal statistics derived from the UK Census, PersonicX segments UK households into 52 unique groups. The result is a highly predictive solution which is proven to be 28% more effective than any other household segmentation product and is recognised as a market leading product in its own right. © Acxiom Corporation. All rights reserved. 21 June 2009
  23. 23. For more information about Retail Consumer Dynamics please call us on: 0800 035 2755 or visit: Acxiom Ltd Counting House 53 Tooley Street London SE1 2QN UK Tel: +44 (0)20 7526 5100 Fax: +44 (0)20 7526 5200 © 2009 Acxiom Corporation. All rights reserved. Acxiom InfoBase and PersonicX are registered trademarks of Acxiom Corporation. All other trademarks and service marks mentioned herein are property of their respective owners. June 2009