••• retail research
Mighty neighborly
Customers taking note of dollar stores’ local focus
Dollar stores, or deep-discount retailers, have favorability ratings of more than 60 percent according to Washington, D.C.-based Morning Consult Brand Intelligence. But the dollar stores also ranked high in another category measured by the company: positive community impact, writes Morning Consult’s Joanna Piacenza in a blog post (“The surprising impact of your neighborhood dollar store”).
Sixty-two percent of U.S. adults said Dollar Tree has a positive effect on its community, while majorities said the same of Family Dollar (57 percent) and Dollar General Corp. (56 percent), according to Morning Consult’s Community Impact Rankings.
All three stores rank among the public’s top 15 brands for “positive community impact,” alongside well-known institutions such as UPS, Amazon.com and Wal-Mart. The numbers can be seen as evidence of persistent but quiet campaigns from each dollar store brand in which they prioritize local neighborhoods over national giving.
Combined, there are more than 27,000 Dollar General, DollarTree and Family Dollar stores in the continental U.S. That’s nearly double the number of McDonald’s restaurants in the country. (McDonald’s has 14,000 U.S. restaurants, according to a company representative.) Dollar stores also outnumber Wal-Mart stores roughly five to one.
Discount retailers have long been a part of Americana, catering to the financially-mindful consumer. The first J.L. Turner and Son Wholesale store, which would later evolve into Dollar General, opened in Scottsville, Ky., in 1939, on the heels of the Great Depression. Dollar stores again flourished during the Great Recession, according to analysis conducted by John Strong, a professor of business, economics and finance at the College of William & Mary. And the stores continue to prosper after the recession, as people still value lower-priced options.
Dollar stores not only have the quantitative edge but the stores engage with local communities in a way Target and Wal-Mart do not, Strong says. “Each of the three dollar stores have thought pretty carefully about their community support strategy – and they’ve localized it,” Strong says, noting that this strategy is “almost 180 degrees” from that of bigger retailers, which donate larger sums of money to national or international organizations or causes. For example, Wal-Mart has given more than $35 million to the American Red Cross since 2007 and announced in August 2017 that it would donate up to$20 million for Hurricane Harvey victims.
The public also has favorable views of Wal-Mart’s community offerings. Sixty-five percent said the company has a positive impact – but another 13 percent said it has a negative one. Strong attributes this to the idea that Wal-Mart siphons sales from local, downtown retailers, though he says discussion has slowly pivoted to place more blame on Amazon.
The dollar stores offer different charitable contributions: Dollar General puts much of its giving into the Dollar General Literacy Foundation, a nearly 25-year-old program aimed at helping employees and customers within 20 miles of its stores tackle education and literacy issues;Dollar Tree generally focuses on assisting military families and helping finance employees’ collegiate goals; and Family Dollar concentrates on small grants to local community groups that provide basic necessities, such as local food banks.
But you won’t find every clothing drive on the dollar stores’press pages. These small contributions are usually felt around the corner not read across the country. “I don’t think it’s part of the culture of those companies to say, ‘Look at what we’re doing,’” says Strong.
Dollar stores also provide employment to rural areas that might not have many jobs, especially opportunities that offer advancement within a larger corporation, Strong says.
All three dollar stores ranked within the top 10 brands on community impact among those making less than $20,000 per year, per the Morning Consult rankings. The stores disappear from top 10 lists among those making$75,000 or more.
Much of that may have to do with location. The stores strategically set up in predominantly low-income neighborhoods, Elizabeth Racine, an associate professor of public health at the University of North Carolina at Charlotte, says. The average family that shops at dollar stores makes less than $50,000 a year, according to a 2015 study.
Residents from Southern states viewed all three dollar stores more favorably than the public overall, with more than six in 10 saying the stores have a positive community impact. Midwestern residents’ attitudes were roughly the same. Those living in the Northeast and West, however, did not rank their positive impact as high, with positive perceptions of the stores in the mid-50 percent range.
The rankings also found that those living in rural communities score all three dollar stores disproportionately high. More than six in 10 rural residents said Dollar General, Dollar Tree and Family Dollar have positive impacts on their communities, while suburban and urban residents’average ranking lands in mid-50s. Less than 5 percent of rural residents said the stores have a negative influence.
If rural communities do not have a Wal-Mart, dollar stores are often people’s sole source for many products – which could increase perceptions of the stores’ positive impact.
Suburban residents do not value dollar stores’ community imprint as much as their rural neighbors. None of the dollar stores make it into suburbanites’ top 10 brands with a positive community impact.
There’s no sign of dollar stores slowing down. Both Dollar General and Dollar Tree have a spot on the Fortune 500 list. Both companies report net quarterly incomes of more than $230 million, either doubling or tripling their quarterly results from a decade earlier.
While Amazon is not an official measuring stick, a Morgan Stanley report released in September 2017 found that investors were most likely to say it would take Amazon the longest to “materially disrupt” dollar stores compared to other consumer markets such as food retail or home furnishings.
“This is one part of retail that has done a lot of very interesting things under the radar: they provide good value to lower-income households and they’ve provided support to lower-income communities in, what I think, are pretty innovative ways,” Strong says.
••• shopper insights
Social media as sales gateway
Brands’ posts helping sales
Survey findings released by Curalate highlight how social media content has become the new storefront, with 76 percent of U.S. consumers purchasing a product that they discovered in a brand’s social media post. The 2017 Curalate survey also found that 40 percent of U.S. consumers shop online at least once per week, a number that rises to 52 percent for 18-34-year-olds. Given that consumers spend more time on social media than any other online activity, this survey offers insights into the growing and changing role played by social in digital commerce.
Product discovery happens across all social media channels, illustrating the need for brands to create compelling content for each channel.While more consumers in general discover products on Facebook than any other channel, younger consumers are much more likely to discover products across the whole range of social channels: 18-34-year-old consumers are 3.3 times more likely to discover products on Instagram than U.S. consumers on the whole;younger consumers are three times more likely to discover products on Snapchat, 2.7 times more likely on Pinterest and twice as likely on Twitter.
The data presented in this report highlight an evolution taking place in digital commerce. Traditionally, e-commerce has been rooted in consumers searching for products that they knew they wanted. Today content posted on social media causes consumers to stop scrolling and ask, “What’s that?” – creating moments of discovery which represent a huge opportunity fore-commerce.
While social media content is great at sparking inspiration, that inspiration can sometimes quickly turn to frustration for many online shoppers.Sixty-five percent report being taken to a product they weren’t interested in after clicking on a link in a social media post. Often the specific product the brand links to is not the one that caught the consumer’s eye in the first place. Curalate’s own data shows that when given the opportunity to shop all of the products in a particular post – and recommended products – consumers browse longer and spend more.
••• employment research
Well-prepared or ill-prepared?
Education’s impact on economic views
A national survey developed by communications firm Burson-Marsteller and conducted by researcher PSB sheds light on Americans’ views about the current state of the economy (with a focus on manufacturing)and their expectations for the future. According to Making it in America: The View from America, only 42 percent of Americans with a high school education or less say they have the right skills to succeed in the 21st century, while 71 percent with a college education or more say they do.
When asked what emotion best describes their feeling about the future of the U.S. economy, Americans with a high school education or less are 25 percent less likely to say they are optimistic than those with a college education or more. And they are 50 percent more likely to feel scared about the future of the U.S. economy than those with a college education or more.
Education level also plays an important role in how Americans feel about the future of the U.S. economy. Thirty-eight percent of Americans with a college education or more think the American economy is headed in the right direction compared to 30 percent of those with a high school education or less. When it comes to job security and the role of automation, only 14 percent of Americans with a college education or more say a machine could replace their job in five years, versus 30 percent with a high school education or less.
However, most Americans agree that business and government should work together in strengthening the economy. Fifty-seven percent of Americans say the government should play a major role in strengthening the economy and 86 percent support tax credits for companies that pay for workers to train in other, more modern work skills. Sixty-one percent say the government should promote job training and education programs for displaced workers to address loss of jobs to automation and machine intelligence. Twenty-two percent say the government should enact policies to protect those jobs and 10 percent support an increase in corporate taxes to fund programs for displaced workers.
Education level matters when it comes to Americans’ outlook on technology. Fifty-five percent of Americans with a college education or more say technology will make overall employment better five years from now versus 45 percent with a high school education or less. Sixty-five percent with college or more and 55 percent with high school or less say technology will make job satisfaction better five years from now. In addition, 57 percent of Americans with college or more and 49 percent with high school or less say technology will make wages/salaries better five years from now.
Regardless of education level, Americans trust companies but distrust business leaders. Sixty-one percent of all Americans have an unfavorable view of business leaders and 73 percent say the wage gap between workers and business leaders will grow in the next five years. Yet, 59 percent of Americans say large companies have more of a positive impact than the federal government does. Interestingly, 96 percent of Americans are favorable towards small businesses versus 54 percent for large companies.
The Making it in America: The View from America survey conducted 1,500 interviews with the general population from June 1-5, 2017. The margin of error for the total sample is +/- 2.53 percent and larger for subgroups. This survey builds off the June 2017 Executive Survey by McKinsey & Company,which surveyed 259 U.S. business leaders representing the full range of regions, industries, company sizes, functional specialties and tenures.
••• financial services
Bearing the burden alone
Study contrasts money habits of single vs. married
With singles accounting for 45 percent of all U.S. adults, it’s more important than ever for those choosing the single lifestyle to empower themselves financially. TD Ameritrade’s Singles & Money survey of 1,000 unmarried and 1,000 married adults (ages 37 and older) reveals that less than one-third of single Americans (29 percent) rate themselves as very financially secure compared with 43 percent of married individuals.
Research shows that singles tend to have more friends than married people, are more likely to volunteer their time and are as healthy or healthier as their married peers. When it comes to finances, however, the picture isn’t as rosy.
Singles make an average of $8,800 less in personal income than their married peers ($52,900 versus $61,700). They’re much less likely to own a home than married couples (58 percent versus 90 percent). Four in 10 working singles spend their entire paycheck each month with no money toward savings (versus 37 percent married).
“While an increasing number of Americans are finding that remaining single can have its virtues, there is one key area making the single life potentially more difficult – money,” says Lule Demmissie, managing director of retirement and long-term investing at TD Ameritrade. “Having a spouse to split the mortgage, household expenses and insurance can make basic living costs more manageable. On top of that, for couples who file jointly, marriage can help reduce their tax burden. The logical conclusion is not that one should simply marry to save money! The substantive insight is that both married and single investors can learn best practices from one another.”
Nearly one-third (29 percent) of singles cite “having complete control over the household finances” as the biggest benefit to not being married. But when it comes to saving and investing, two heads may be better than one. Fewer singles believe they are very knowledgeable about the stock market (16 percent of singles versus 26 percent of married individuals). Three in 10 unmarried Americans aren’t saving for anything, compared to 17 percent married, and a quarter (27 percent) have emergency funds, versus 39 percent married.
Three in 10 (28 percent) singles classify their retirement savings as “I’ll scrape by,” while nearly a quarter (23 percent) identify as“super savers.”
Forty-four percent are saving for retirement, versus six in 10 (63 percent) married. One-third (34 percent) of unmarried Americans expect to be very secure in retirement, versus 52 percent for married. Almost half (46 percent) of singles are worried about running out of money in retirement, versus 38 percent for married. More than one-third (36 percent) of singles want to fully retire but believe they won’t be able to afford it, versus 29 percent for married.
“The good news is that singles can redefine the American dream on their own terms by taking financially prudent steps such as saving for retirement early, sharing expenses with a roommate or family member and establishing an emergency fund. This can help level the playing field with their married peers,” Demmissie says.