KRS Survey: Traditional Retail Categories Are Blurring

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K I N G SURVEY

R E TA I L

S O L U T I O N S

Traditional Retail Categories Are Blurring

Consumer Behaviors and Attitudes Towards Grocery, Fresh Meal, Clothing, and Service Purchases


Retail design firm King Retail Solutions (“KRS”), in conjunction with the University of Arizona Center for Retailing, conducted a four-part study to better understand US consumers’ current and evolving shopping habits and purchasing motivators, specifically as relates to grocery, fresh-prepared meal, clothing , and services purchases. We’ve all seen the expansion of each of these categories at retail establishments ranging from supermarkets and convenience stores to big box and department stores. The results of this survey illustrate the changing retail landscape and shoppers’ embrace of a blurred retail environment. The study also analyzes demographic variances and suggests that category blurring will continue to thrive, making the embrace of new sales channels both an opportunity for retailers and a source of added competition as retailers compete outside of traditional channels (ex. grocery stores competing with quick service restaurants).

U.S. CONSUMER SURVEY: FALL 2013 Survey conducted by King Retail Solutions, in conjunction with the University of Arizona Center for Retailing, Fall 2013. Multi-generational respondents included ~400 millennials, ~400 gen-x, and ~400 baby boomers. Equal parts male/female. (www.kingrs.com)


LET’S START WITH GROCERY In the preceding 12 months: 77%

BOUGHT GROCERIES FROM A NON-GROCER

62%

BOUGHT FRESH MEALS FROM A NON-RESTAURANT

57%

BOUGHT CLOTHING FROM A NON-CLOTHIER

20%

BOUGHT A SERVICE FROM A NON-SERVICE PROVIDER

In the coming 12 months: 96%

WOULD BUY GROCERIES FROM A NON-GROCER

92%

WOULD BUY CLOTHING FROM A NON-CLOTHIER

88%

WOULD BUY FRESH MEALS FROM A NON-RESTAURANT

74%

WOULD BUY A SERVICE FROM A NON-SERVICE PROVIDER

Which groceries are they buying at non-grocery stores?

59%

77%

42%

CANNED/BOXED

82%

FRESH FRUIT/VEG

54%

38%

49%

22%

PEOPLE W/ KIDS

FROZEN

DAIRY

BREAD

73%

PEOPLE W/O KIDS

MEAT

IN THE PRECEDING 12 MONTHS, 24% OF SHOPPERS MADE A GROCERY LIST INTENDING TO FULFILL THE ENTIRE LIST AT A NON-GROCERY: 79%

BIG BOX

25%

PHARMACY DOLLAR STORE C-STORE

WWW.KINGRS.COM

of people bought groceries from a non-grocer

52%

81% WOMEN

71% MEN

of people buy groceries from a non-grocer more than once a month

58%

PEOPLE W/ KIDS

55% WOMEN

18% 7%

49%

PEOPLE W/O KIDS

49% MEN

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“It can’t all be about one-stop-shop, but if it’s a retailer they appreciate, they are going to shop there and if new, non-traditional items are available for sale, they are going to buy those items. Expanding what you sell is only a part of the equation; delivering a valuable shopping experience is the real challenge.” ANDREW SWEDENBORG, EVP, KING RETAIL SOLUTIONS

REGARDLESS OF GENERATION, GENDER, INCOME, OR LOCALE EXCEPT:

SHOPPERS WERE ASKED TO RANK THEIR DECISION MAKING FACTORS IN CHOOSING WHERE TO BUY GROCERIES (INCLUDING GROCERY STORES)*:

1. 2. 3. 4. 5.

Cost Convenience Quality Selection Access to Non-Grocery Items

BABY BOOMERS, THOSE MAKING $50K-$100K, AND RURAL DWELLERS:

value quality above convenience

* In Order Of Importance

57%

MILLENNIALS

40% GEN X

The millennial generation is already comfortable shopping at c-stores, pharmacies, and other non-traditional venues for groceries. In fact, urban, male, millennials (YOUNG CITY GUYS) are the demographic most likely to purchase some groceries at a convenience store (72% do it) or pharmacy (49% do it).

36%

BABY BOOMERS

AT 57%, MILLENNIALS ARE MORE LIKELY THAN GEN X (40%) AND BABY BOOMERS (36%) TO BUY GROCERIES AT A CONVENIENCE STORE AT 47%, MILLENNIALS ARE MORE LIKELY THAN GEN X (37%) AND BABY BOOMERS (36%) TO BUY GROCERIES AT A PHARMACY

BIG BOX 60%

BAKERY/DELI 32%

C-STORE 72%

FARMERS MARKET/ LOCAL STAND 9%

PHARMACY 49%. $ STORE 28%

DISCOUNT STORE 4% DEPARTMENT STORE 9%

Where are people buying groceries? 66%

BIG BOX

43%

C-STORE PHARMACY

30%

DOLLAR STORE

30% 17%

BAKERY/DELI/RESTAURANT

11%

FARMERS MARKET/LOCAL STAND DISCOUNT STORE DEPARTMENT STORE WWW.KINGRS.COM

7% 5%


MAKE MORE, BUY MORE. In the past 12 months… PEOPLE MAKING: <$25K

73%

$25-$50K

75%

$50-$100K $100-$150K >$150K

76% 79% 83%

…bought groceries from a non-grocer.

SUBURBAN

URBAN

RURAL

79% 76% 73% Suburban people (79%) are slightly more likely than urban (76%) and rural (73%) dwellers to buy groceries from a non-grocer.

Top 20 favorite places to buy groceries (THAT AREN’T GROCERY STORES)

FARMERS MARKET/ FOOD STALLS

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MOVING FROM GROCERY ONTO CLOTHING REGARDLESS OF GENERATION, GENDER, INCOME, OR LOCALE EXCEPT:

SHOPPERS WERE ASKED TO RANK THEIR DECISION MAKING FACTORS IN CHOOSING WHERE TO BUY CLOTHING (INCLUDING CLOTHING STORES)*:

1. 2. 3. 4. 5.

MILLENNIALS:

Cost Quality Selection Convenience Access to Non-Clothing Items

value quality so much that it shifts the overall results

GEN X & BABY BOOMERS:

value selection above quality

* In Order Of Importance

Where are they buying clothing? 81%

BIG BOX DOLLAR STORE

15%

PHARMACY

13%

LOCAL VENDOR/EVENT

9%

SERVICE PROVIDER

7%

RESTAURANT

5%

CONVENIENCE STORE

4%

Top 10 favorite places to buy clothing (THAT AREN’T CLOTHING STORES)

WWW.KINGRS.COM

THEY SAY THEY HAVE THE SAME VALUES, BUT PEOPLE WITH KIDS ARE MORE LIKELY THAN PEOPLE WITHOUT KIDS TO BUY CLOTHING FROM A NON-CLOTHING STORE.

62%

PEOPLE WITH KIDS

53%

PEOPLE WITH OUT KIDS


...AND NOW FRESH PREPARED FOODS SHOPPERS WERE ASKED TO RANK THEIR DECISION MAKING FACTORS IN CHOOSING WHERE TO BUY FRESH-PREPARED MEALS (INCLUDING RESTAURANTS)*:

1. 2. 3. 4. 5.

Top 20 favorite places to buy fresh prepared meals (THAT AREN’T RESTAURANTS):

Quality Cost Convenience Selection Access to Non-Fresh Prepared Meal Items

* In Order Of Importance

REGARDLESS OF GENERATION, GENDER, INCOME, OR LOCALE EXCEPT: WOMEN:

Value selection over convenience INCOME $100-$150K:

$$ Value convenience over cost INCOME >$150K:

$$$ Value selection & convenience over cost IT SEEMS THE MORE ONE MAKES, THE LESS COST MATTERS IN FRESH PREPARED MEAL PURCHASES.

Where they buy fresh prepared… 74%

GROCERY

44%

BIG BOX

28%

C-STORE PHARMACY

35% MEN

9%

23% WOMEN

THE FELLAS ARE MORE LIKELY THAN THE LADIES TO BUY A FRESH MEAL FROM A CONVENIENCE STORE. PAGE 5


LAST BUT NOT LEAST: SERVICES REGARDLESS OF GENERATION, GENDER, INCOME, OR LOCALE EXCEPT:

SHOPPERS WERE ASKED TO RANK THEIR DECISION MAKING FACTORS IN CHOOSING WHERE TO BUY SERVICES (INCLUDING SERVICE PROVIDERS) *:

1. 2. 3. 4. 5.

Cost Quality Convenience Selection Access to Non-Service Items

BABY BOOMERS, WOMEN, PEOPLE WITH INCOME >$100K/YEAR, AND URBAN DWELLERS ALL

value quality over cost

* In Order Of Importance

Top 10 favorite places to buy services

Where they buy services… 52%

BIG BOX

32%

PHARMACY DEPARTMENT STORE

14%

GROCERY

14%

(THAT AREN’T SERVICE PROVIDERS) BIG BOX

PHARMACY

11%

CONVENIENCE STORE

BIG BOX

IMPULSE CHECKS: PHARMACY

Millennials tend to make more impulse buys… GROCERIES

FRESH PREPARED

CLOTHING

SERVICES

CLUB

DEPARTMENT STORE

22% 17%

18%

18% 12%

16% 10% 10%

9%

10%

PHARMACY 9% 5%

MILLENNIAL

GEN X

BOOMER

[THIS GENERATION] SAID THE MAJORITY OF GOODS BOUGHT FROM NON- STORES WERE IMPULSE PURCHASES.

WWW.KINGRS.COM

CLUB

GROCERY

GROCERY


DEFINITIONS SURVEY TAKERS WERE GIVEN THESE EXPLANATIONS/DEFINITIONS…

Bakery/Deli/Restaurant (e.g., Starbucks, Panera, Cracker Barrel) Discount Store (e.g., Ross, TJ Maxx, Tuesday Morning) Clothing includes athletic apparel/gear; sleepwear; logo clothing for a sports team, band, school etc.; underclothes or socks; general fashion such as dresses, tops, and pants; logo clothing for a retailer (e.g., Hard Rock Café shirt); etc. Services are non-tangible purchases such as pedicures, oil changes, massages, hair cuts, and health exams/treatments. For the purposes of this survey, an example of buying a service at a non-service-specific store would be getting your HAIR CUT inside a PHARMACY... or getting your FLU SHOT at a GROCERY STORE. Fresh Prepared Meals include grab-and-go, takeout, or other ready-to-eat meals

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NOTES

WWW.KINGRS.COM

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Solving retail dilemmas quickly and with customers always in mind is KRS’ hallmark. Please let us know how we can help.

MAKE CONTACT TODAY CALL

800.533.2796

EMAIL

business.relationships@kingrs.com


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