March 11, 2010 / 6:58 AM / 9 years ago

Retailers should leave demographics behind

CHICAGO (Reuters) - U.S. retailers must focus on three distinct types of shoppers rather than traditional demographics to drive growth, a new survey of consumer behavior found.

Grocers, supercenters and other retailers must also get shoppers to buy more at their existing locations instead of trying to grow by opening new stores, based on findings from German consumer products maker Henkel (HNKG_p.DE).

Shoppers who plan their trips, scanning circulars and clipping coupons, actually spend more money than others, making them a prime target for retailers and manufacturers, according to Henkel, best known in the United States for Dial soap.

These shoppers accounted for 31 percent of spending on packaged goods in 2009, even though they only make up 26 percent of U.S. households.

Despite their bargain-hunting ways, the group — which Henkel dubbed “Shoptimizers” — on average spent more than $7,100 last year, buying more packaged goods while cutting back on some fresh items, Henkel said.

“We haven’t seen the impact of the economic times really reduce their spending,” said Mack Hoopes, research manager of shopper insights at Henkel Consumer Goods North America.

But they shop around. In 2009, such savvy shoppers visited an average of 11 different chains in their hunt for the best deals, or about one-third more stores than those who shop without planning. They also skipped about two of their 20 trips to drugstores and added a trip to supercenters such as Wal-Mart Stores Inc (WMT.N) as they searched for bargains.

SIMILARLY PROFITABLE

Consumers who do a little planning before they shop and look for deals once they are in stores, a group Henkel calls “Mainstreeters,” spent close to $6,300 on average, up $81.

“The economic times have kind of hit this group and they are now watching the ads,” Hoopes said.

Carefree shoppers, who never use coupons, spent just over $5,600 in such outlets last year, up $246, Henkel found.

Despite their distinct shopping patterns, the three groups generate profit margins for retailers that are nearly identical, he said. They are also split evenly in age, income and household size.

The survey, based on tracking of about 40,000 households done by ACNielsen and Information Resources Inc, does not include spending at restaurants. That may explain some of the discrepancy, as those who are a bit more carefree about spending in stores may also spend more dining out.

PRIVATE LABELS

Grocers have been busy promoting low prices in their attempt to steal market share. That effort, in part, led to contracting margins at Kroger Co (KR.N), the largest U.S. grocer after Wal-Mart.

Another concern for manufacturers is whether shoppers will continue to opt for private label goods after the economy strengthens. Spending on store branded items rose 4 percent in 2009 as the recession continued and job losses mounted, according to Henkel.

“The last time we saw a long, sustained impact on shopping behavior was during the depression,” Hoopes said. “How this recession will hit us I do not know. It just depends on how long, how deep it is and what happens coming out of it.”

Despite the downturn, dollar or value chains such as Dollar General (DG.N) did not lure more shoppers last year, according to the survey. However, those who were already shopping at such stores spent more when they visited, Hoopes said.

Drugstores such as Walgreen Co WAG.N and CVS Caremark Corp (CVS.N) lost some bargain hunters in 2009 after three years of gaining such shoppers. Only 37 percent of drugstore revenue came from those shoppers last year, down from almost 40 percent in 2008, Hoopes said. (Reporting by Jessica Wohl; Editing by Steve Orlofsky)

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