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Surveys Deliver Mixed Signals

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It’s hard to figure out what consumers are thinking these days. One day they seem a bit upbeat, the next they’re putting the brakes on spending. Two recent surveys illustrate shifting consumer sentiments.

Catalina Marketing released the findings of research measuring how consumer product goods brands have been affected by reduced loyalty and defections. The report shows that the top 100 brands in the Catalina Network of grocery, drug and mass merchant stores grew revenues by only 2.2 percent, on average, during the past 12 months. Moreover, the brands experienced a lost opportunity equal to 8.5 percent, on average, due to defections and reduced share among shoppers who had been highly loyal buyers a year earlier.

The findings offer “a strong argument for making loyalty a more significant part of brand strategy,” said Todd Morris, executive vice president, brand development, for Catalina. “Staying close and in touch with the changing needs and purchase behaviors of your brand’s most valuable consumers is the best way to retain loyal customers and grow revenue.”

While CPG brands grapple with ways to encourage loyalty, apparel retailers and manufacturers may be in for a pleasant surprise this fall. Apparel sales are expected to post year-over-year gains during the fall shopping season (August through October), with especially big increases in sales of children’s apparel, according to an analytics-based forecast produced by IBM.

The forecast, which is based on historical data and sophisticated analytics software developed by IBM to analyze both long-term trends and seasonal peaks, find that the children’s apparel category is expected to grow by 11.1 percent to $2.659 billion, compared to the same three month period last year. In women’s apparel the projected year-over-year change in sales for August-October is 3.1 percent; in men’s it’s 5.5 percent.

Even more impressive: The forecast indicates that for men’s apparel, September sales will be up 10.5 percent over the 20-year average; for women’s apparel, September sales will be up 2.15 percent over the 20-year average.

“This indicates that consumers are rotating between categories,” said IBM retail analytics leader Michael Haydock. “Adults are holding back on purchasing for themselves during their back-to-school shopping for the kids. But once the kids are in school, moms and dads will be looking to treat themselves. This category rotation, which became prominent after the economic downturn began in 2008, seems to be persisting.”

If you’re scratching your head trying to figure out what whether shoppers will eat or buy new clothes this fall, you’re probably not alone. Judging from these findings, it seems they’re likely to be in the market for some new togs and when they stop by the grocery store to pick up dinner on the way home they’ll be in the market for something priced right -- though maybe not the “go-to” brand of years gone by.