BIGinsight™ Retail Ratings Report on Women’s Clothing: Kohl’s and Macy’s Pose Challenges for Walmart; More Bad News for JC Penney?

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Latest consumer insights indicate department stores are posing challenges for discount giant Walmart. And with JC Penney’s “Fair and Square” pricing strategy echoing an EDLP model, challenges could be on the horizon for it as well. During the height of the recession, consumers searched for rock-bottom prices, but the tide is turning towards selection, quality and brand that fit within shoppers’ budgets.

With JC Penney’s new pricing structure echoing that of Walmart’s EDLP model, the most recent Retail Ratings Reports from BIGinsight™ indicate both retailers could face challenges when it comes to Women’s Clothing. For years Walmart has led Kohl’s in the Women’s Clothing category, however in November of 2011, Kohl’s surpassed the discounter and the two have been tangling for the top position ever since.

Although a tie was recorded in May, Kohl’s has maintained the lead for the majority of 2012, giving the Bentonville behemoth cause for concern in the Women’s Clothing sector. This trend could be attributed to a consumer who appears to be thinking more towards selection, quality and brand yet who is still economically minded. A majority enjoy shopping for sales and discounts, often turning apparel shopping into a “sport,” finding quality and name brands that still fit within budgets. Lacking the thrill of the hunt in this category, Walmart seems to be struggling to obtain new customers, a possible foreshadowing of what’s in store for JC Penney.

“Mainstream shoppers still need to feel like they scored a deal when buying apparel and this generally isn’t achieved with a low price,” said Pam Goodfellow, Consumer Insights Director, BIGinsight™. “Shoppers still crave coupons, specials, and sales to drive them into stores, to try on new merchandise and make them feel OK about spending on this ‘luxury.’”

To view complimentary report on how select retailers “stack up” in terms of retail positioning when it comes to key shopping attributes such as price, selection, newest styles and Net Promoter Scores*, click here.

The growing divide between retailers offering EDLP (Walmart, JCP) and department stores becomes more apparent by applying the Consumer Equity Index™ (CEI). The CEI is a year-over-year index showing growth or decline of Consumer Preference Share (the % who shop a particular store most often for Women’s Clothing). The latest CEI ratings for Women’s Clothing show that Kohl’s and Macy’s are growing in customer share, while Walmart and JC Penney are flatlining. In the all-important female shopper segment, Kohl’s share has risen 14%, Macy’s has boosted a whopping 43%, while Walmart and JC Penney have each dropped 5%.

Consumer Equity Index™ (CEI):
(Women 18+)

Macy’s        143.49
Kohl’s         114.07
JC Penney    94.18
Walmart    95.18

(To be read as: 100 equals flat year-over-year, 105 indicates 5% growth while 95 indicates 5% decline in Consumer Preference Share.)

Source: BIGinsight™ Monthly Consumer Survey, APR 11-12

And in the wake of JC Penney’s first quarter earnings loss and 20% drop in sales, once again it all comes back to the consumer.

“At the end of the day, JC Penney didn’t have an existing customer base that was malleable enough to make their “Fair & Square” pricing strategy an overnight success. Perhaps they should have listened more to their current as well as would-be shoppers before pulling the rug out from beneath them,” said Goodfellow.

For complimentary report including the April Retail Ratings Report for Women’s Clothing and Retailer Positioning Charts, click here.

And for further analysis on a possible Department Store Domination in Women’s Clothing, click here.

*Net Promoter, NPS and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld

About BIGinsight™
BIGinsight delivers executives timely, consumer-centric insights from multiple sources. As a comprehensive resource of information, BIGinsight represents the voice of the consumer and provides knowledge to marketers regarding consumer views on the economy, personal finance, retail, lifestyle, media and domestic and world issues.

Pam Goodfellow, Consumer Insights Director
pam (at) biginsight (dot) com
Chrissy Wissinger, Senior Manager, Communications
chrissy (at) biginsight (dot) com


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