Numerator Retailer Resiliency Score Shows Walmart at Risk, Whole Foods and Trader Joe's with Greatest Opportunity with Affluent, Health-Conscious Consumers
CHICAGO, Aug. 12, 2020 /PRNewswire/ -- Numerator, a data and tech company bringing speed and scale to market research, has launched a Retailer Resilience Score for "Life on Pause" consumers. Life on Pause consumers are one of six consumer segments identified in a Numerator segmentation study of 70,000 verified shoppers; the study will be updated quarterly to help brands, analysts and retailers understand consumer behavior across all six segments given the dynamic nature of job security, financial security, health concerns and more. The Life on Pause segment is of particular interest for retailers as this group is financially stable (meaning they have money and are willing to spend it) but has higher than normal concern about health. This means they are more likely to switch shopping behaviors and are a valuable segment for retailers to target. They are also the largest segment at 19% of total households -- so a key factor in spending.
The analysis focuses on the index of Life on Pause consumers for specific retailer channels and specific retailers versus the average on two metrics: the % of Household penetration and the % of Spend. The difference between these two numbers results in the Retailer Resilience Score. (e.g., Life on Pause indexes at 103 as a percent of U.S. households for Target and at 114 as a percent of spend; this means these consumers are spending disproportionately at Target, giving Target a Retailer Resilience Score of 11). This study will be done in four waves (quarterly) with wave 1 based on analysis of 3/1/20 - 7/19/20 shopping behavior.
High level findings (details below) from an analysis of both retailers and retail channels include:
-- The five channels best poised to benefit from the spend-ready Life on
Pause segment include the Online, Liquor, Office, Craft, and Baby & Toy
channels.
-- The five retail channels at most risk as Life on Pause consumers make
choices to protect their health by limited trips and staying at home
include Mass, Gas & Convenience, Dollar, Department and Home Improvement
stores.
-- Walmart has the greatest risk with Life on Pause consumers in the Mass
channel with a Retailer Resilience Score of -18. For comparison, Target
has a Score of 11. In essence, Target is gaining more than fair share of
spend among the Life on Pause segment and is reaching fair share in
terms of the % of HH's shopping during the COVID-Recessionary period,
while Walmart is losing ground.
Retailer LoP % LoP %
Retailer
Spend HH Resilience
Index Score
Index
---
Target 114 103 11
---
Walmart 76 94 -18
---
"While overall spend on household goods surged with COVID, consumer buying is shifting with changes in financial and job security, ongoing health concerns, and changing attitudes about restaurants and re-entry change," said Eric Belcher, CEO, Numerator. "Resilience with high value shopper segments like Life on Pause offers a leading indicator of retailer strength as consumer circumstances rapidly change."
Life on Pause key findings for the top 5 and bottom 5 retail channels (in an analysis of 25) include:
RETAIL CHANNELS WITH TOP 5 / BOTTOM 5 RESILIENCE SCORES
-- While already popular with this segment, it is not surprising that
Online is also strong at 26. Life on Pause indexes at 101 on HH
penetration, but Spend significantly over indexes at a 27% increase over
average.
-- Likewise, the Liquor channel has a strong Resilience Score of 26 as this
group is slow to engage in restaurants and bars and is enjoying
cocktails at home.
-- Food and Club stores round out the top ten at Resilience Scores of 11
each. Note that in the Club channel, Life on Pause slightly over indexes
as a percent of HH's at +4%, but also has a stronger index on percent of
spend at 115. The Life on Pause segment is also one that has
transitioned more seamlessly to bulk buying, enabling them to do fewer,
larger trips to Club Stores in keeping with their concern about managing
health.
-- The Life on Pause segment under indexes by more than 10% for 3 of the
bottom five segments, although Life on Pause consumers are roughly on
par as a percentage of households for Mass and Gas & Convenience Stores.
-- Mass, Gas & Convenience and Dollar Store channels are all hemorrhaging
the valuable Life on Pause segments with scores of -17, -21, and -23
respectively.
-- This should be of particular concern to Mass which has a healthy
representation of Life on Pause consumers as share of household
penetration at -2% versus average -- but is seeing its spend index down
19%. The Life on Pause segment already accounts for a smaller percentage
of households for both Gas & Convenience (-5%) and Dollar Stores (-11%);
while they are losing ground with this valuable segment, the existing
underrepresentation will help mitigate losses, particularly for the
Dollar Store channel.
TOP 5 / BOTTOM 5 RETAIL CHANNEL RESILIENCE SCORE
Grouping
Retailer LoP % LoP % Retailer
Spend Resilience
Index Score
HH
Index
---
Top 5
Liquor 127 101 26
Channels
---
Online 127 101 26
---
Food 111 100 11
---
Club 115 104 11
---
Baby
&
Toy 106 98 8
---
Bottom 5
Auto 67 79 -12
Channels
---
Discount
Store 57 74 -17
---
Mass 81 98 -17
---
Gas
&
Convenience 74 95 -21
---
Dollar 66 89 -23
---
Life on Pause key findings from a similar analysis done of specific retailers (versus total retail channel) include the following:
RETAILERS WITH TOP 5 / BOTTOM 5 RESILIENCE SCORES
-- Walmart and Dollar General have the most risk with Retailer Resilience
Scores of -18 and -21 respectively. Walmart has the greater risk as the
Life on Pause segment represents a larger portion of their household
penetration (with an index of 94) but with spend down 24% within this
lucrative segment.
-- Home Depot is the most vulnerable given the higher presence of Life on
Pause as part of their household base (103 index) but with decreased
likelihood of spend (94 index).
-- Dollar General and Dollar Tree have significant risk (at 62 and 70
indices on % of Spend) but the Life on Pause segment tends to be a
lesser factor for this segment, with the household penetration index at
83 and 85 respectively.
-- Whole Foods and Trader Joe's lead the pack with high Retailer Resilience
Scores with the Life on Pause segment. This health conscious segment
already over performs on percent of households at 48% and 44% for Whole
Foods and Trader Joe's respectively. They further outperform on percent
of spend, indexing at 184 and 173.
TOP 5 / BOTTOM 5 RETAILER RESILIENCE SCORE
Grouping
Retailer LoP % LoP % Retailer
Spend
Index HH Resilience
Index Score
---
Top 5
Whole Foods 188 148 40
Retailers
---
Trader
Joe's 173 144 29
---
Publix 132 104 28
---
Hy-
Vee 131 105 26
---
Amazon.com 130 104 26
---
Bottom 5
Menards 88 93 -5
Retailers
---
Home
Depot 94 103 -9
---
Dollar
Tree 70 85 -15
---
Walmart 76 94 -18
---
Dollar
General 62 83 -21
---
The study and Score will be updated quarterly to help brands, retailers and financial analysts monitor the relative strength of retailers in a dynamic environment. The full analysis looks at six segments in three themes: Unbothered (either Full Steam Ahead or Living My Frugal Life); Coping (Life on Pause or Pushing Forward) or Anxious (Scared & Struggling or Glass Half Full) who can be defined as below:
-- Unbothered: Full Steam Ahead (16% of HHs) -- includes shoppers who were
the least impacted by the pandemic. Their financial situation is stable,
and their purchase behavior has remained largely the same as before the
pandemic. With a relatively positive outlook on the economy, this
segment is the most likely to pay more for their favorite brands, and to
dine out at restaurants.
-- Unbothered: Living My Frugal Life (13% of HHs) -- includes shoppers who
were price-conscious before the onset of the pandemic. Their financial
situation is stable, yet they utilize a variety of methods to save money
when shopping. With a relatively positive outlook on the economy, this
segment continues to be strategic in where they shop, what brands they
buy, and overall how they spend their money.
-- Coping: Life on Pause (19% of HHs) -- includes shoppers who place
importance on their overall health keeping them away from others and
have delayed returning to pre-COVID normalcy. This segment is shopping
online and avoiding restaurants for their safety. This is an affluent
segment with low concern over financial or job security; but pessimistic
about the economy and country overall.
-- Coping: Pushing Forward (19% of HHs) -- includes shoppers with moderate
concerns over their health, financial and job security, who are trying
to find a new normal. Life has not entirely returned to normal, but they
are interacting with others. They prefer to shop in store not online and
they are not delaying large purchases.
-- Anxious: Glass Half Full (17% of HHs) -- includes shoppers impacted by
the current environment but are starting to find a way out or at least
remain hopeful. While lower income, this segment looks forward to
returning to normalcy. They do have high levels of concern about
financial situations, health of self and others, and household job
security. They are mitigating the impact of the current environment on
health and finances while sticking to their normal behaviors whenever
possible.
-- Anxious: Scared & Struggling (18% of HHs) -- includes shoppers who are
most impacted by the current environment, with the greatest concern
about finances, health of self and others, the household's job security.
This low income segment is gloomy about the economy and saving money,
delaying purchases and turning to private label.
Numerator's modern data and tech platform enables it to conduct massive consumer surveys, linked to verified purchase behavior, with speed and scale not previously available.
About Numerator
Numerator is a data and tech company bringing speed and scale to market research. Headquartered in Chicago, IL, Numerator has 1,600 employees worldwide. The company blends proprietary data with advanced technology to create unique insights for the market research industry that has been slow to change. The majority of Fortune 100 companies are Numerator clients.
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SOURCE Numerator
