DIY market headed for slow-down

Following a five-year boom, home-channel do-it-yourself (DIY) sales will slump over the next five years, predicts a report by Chicago research firm Mintel. While housing sales and in-store how-to programs significantly boosted DIY sales over the last five years, this $460 billion industry is preparing to overcome the challenges of a cooling market.

Lowe’s and Home Depot have both increased mailings of their retail credit card offerings by almost 150 percent in an effort to bolster business, according to Mintel Comperemedia, which analyzes direct mail and print media. According to Mintel’s research, 90 percent of consumers purchase home improvement products at home centers, but few shop at just one type of store. Retailers have placed their hope in three emerging DIY markets: women, Hispanics and Baby Boomers. “We saw retailers make many outreach efforts last year,” says Justin De Santis, analyst with Mintel. “For example, suppliers introduced new lines of traditionally male-oriented products such as hand tools with ergonomic features, design and packaging that specifically targeted the female DIYer. There is a major opportunity to provide more targeted products for this group.”

To appeal to women who are increasingly taking home improvement into their own hands, major retailers such as Lowe’s and Home Depot are offering educational workshops, adapting product lines and making store layouts more female-friendly. Mintel research reports that close to 60 percent of women surveyed had undertaken a DIY project in the last year.

Do-it-yourself needs are also expected to grow in the Hispanic market over the next five years. Retailers are expanding Hispanic and Spanish-speaking staff while continuing to introduce bilingual signage and packaging. The projected number of Hispanic homebuyers will also drive sales opportunities.

DIY retailers are also focusing their product and service offerings on Baby Boomers, who are predicted to buy everything from high-end furniture to small barbecues at DIY stores. Home Depot’s acquisition of online company Home Decorators Collection sets the stage for more expansion opportunities that can attract this key group. Boomers growing into the 50-65 age bracket will cause that segment to be the fastest-growing age group in the U.S. until 2010, and Mintel predicts that installation services sales and one-stop shopping will increase as this market seeks more “do it for me” purchases.

“Companies will need to continue providing more programs and services to attract these emerging groups,” says De Santis. “They will also need to consider creating more initiatives that differentiate them more solidly from each other. Gaining loyal customers will be important as the DIY competition continues to heat up.” For more information visit www.mintel.com.

High gas prices mean less dining out, fewer shopping trips

The June edition of BIGresearch’s Consumer Intentions and Actions Survey found that consumers are making difficult choices to offset the rising cost of driving. When asked if fluctuating gas prices have impacted their spending, 75.3 percent of nearly 7,500 respondents agreed. While that may come as no surprise, the survey results raise a major red flag for business and retail. “It’s not just people making less than $50,000 per year who are rethinking their household spending,” says Joe Pilotta, vice president of research for BIGresearch, Columbus, Ohio. “People making over $50,000 per year are also feeling the pinch of gasoline price hikes and are cutting back in many of the same ways.”

So where are they cutting back? The top three areas listed for both income groups included driving, dining out and vacation/travel. Both groups also indicated that inflated gas prices have caused them to spend less on clothing and groceries as well as delay major purchases such as a car, electronics or furniture. “With the continued impact of higher gas prices, shopping has become increasingly difficult,” says Pilotta. “With gas costing some drivers in excess of $40-$50 per week, consumers have to think more realistically about adding the cost of driving to their household budget than in the past - and coming up with ways to help offset the blow.”

The survey showed that the leading gas/money-saving strategies employed by consumers making above and below $50,000 per year include taking fewer shopping trips, shopping closer to home and shopping for sales more often.

“These consumer trade-off strategies mean retailers and manufacturers may be facing difficulties in forecasting sales and projecting inventory,” says Pilotta. “As consumers strive to save money, they are more willing to make sacrifices, like buying house-brand products over name brands, for example. To stay on par and remain competitive, many companies will need to look toward coupon programs, both online and off, as well as other value pricing strategies to make a shopping trip worthwhile for consumers who are driving and spending less.” For more information visit www.bigresearch.com.

Mass-transit users love their portable electronics

An analysis of mass-transit users and “power pedestrians” by Scarborough Research, New York, finds that they are more likely than the average consumer to plan to purchase portable electronic devices such as MP3 players and PDAs, as well as to use wireless Internet. Also, these consumers have more opportunities to make purchases. They have the power to buy in the palm of their hand with the personal electronic devices, and their on-the-go nature simply may place them in closer proximity to retail outlets. Mass-transit users and power pedestrians account for about 22 percent of consumers in the 75 local markets measured by Scarborough.

The Scarborough analysis examined mass-transit users - subway riders in cities that have subway systems (New York, Philadelphia, Washington D.C., and Boston) and rail riders in cities that have railway systems measured by Scarborough (Baltimore; Boston; Denver; Fresno, Calif.; Harrisburg, Pa.; Hartford, Conn.; Los Angeles; Miami; New York; Philadelphia; Portland, Ore.; Providence, R.I.; Sacramento, Calif.; Salt Lake City; San Diego; San Francisco; Seattle; St. Louis; Washington D.C.; West Palm Beach, Fla.; and Wilkes-Barre, Pa.). The study also examined power pedestrians, defined as consumers who walked three or more miles in a city or town during the past week.

According to the Scarborough analysis, today’s mass-transit users and power pedestrians own or plan to purchase a variety of portable technologies. Subway riders, for example, are 93 percent more likely than the average consumer in subway cities to plan to purchase an MP3 player. Rail riders are 62 percent more likely than other consumers in Scarborough’s rail markets to plan this purchase, and power pedestrians are 44 percent more likely to plan to buy this portable player. Personal digital assistants are also popular among the transit audience. Subway riders are 48 percent more likely than the average consumer in cities with subway systems to own a PDA. Rail riders are 65 percent more likely than other consumers in Scarborough’s rail markets to own a PDA, and power pedestrians are 16 percent more likely to have this item.

The mass-transit user or power pedestrian could access a variety of content through these personal portable devices, as, across the board, they are more likely to have wireless Internet access.

Purchases via the Internet are extremely popular with the mass-transit set. Subway riders, for example, are 27 percent more likely than other consumers in subway markets to have spent $2,500 or more on Internet purchases during the past year. Power pedestrians are 26 percent more likely than all consumers to be in this spending group. They also buy in high-end retail categories online - such as jewelry, automotive and travel.

Today’s mass-transit user is young, affluent and ethnically diverse. For example, subway riders are 39 percent more likely than all consumers in subway markets to be ages 18-34 and 15 percent more likely to have an annual household income of $150,000 or more. They are also 75 percent more likely to be African-American and 58 percent more likely to be Hispanic. Rail riders are 26 percent more likely than all consumers in rail markets to be ages 18-34 and 41 percent more likely to have an annual household income of $150,000 or more. They are 75 percent more likely to be African-American and 37 percent more likely to be Hispanic. Similarly, power pedestrians are 14 percent more likely than all consumers to be ages 18-34 and 21 percent more likely to have an annual household income of $150,000+. They are 22 percent more likely to be Hispanic.

There are several advertising categories that stand out among mass-transit users and power pedestrians. Subway riders are avid travelers, as they are 45 percent more likely than other consumers in subway markets to have taken three or more domestic air trips during the past year. Subway riders are 32 percent more likely to have eaten in a fast-food restaurant six or more times during the past month. Similarly, rail riders are 56 percent more likely than other consumers in rail markets to have made three or more domestic air trips during the past year, and they are 17 percent more likely to have eaten at a fast-food restaurant six or more times during the past month. This group is 14 percent more likely to be from households that spend $150 or more on groceries weekly. For more information visit www.scarborough.com.

Feel free to market to us, say phone-using teens

Research by San Mateo, Calif.-based Mobilitec, a provider of software that lets mobile service providers offer content to their subscribers, has found that teens don’t mind being marketed to by their mobile phone service providers.

That finding was one result from the firm’s new global research project, The Lab at Mobilitec, which consists of a group of 11 teens from around the world who complete a monthly task using their mobile phones. Each month the participants find, access, use and pay for different types of mobile content. Mobilitec asks them to provide feedback and rate their experiences at every stage of the process.

In their first assignment, Mobilitec asked The Lab members to use their phone to download four mobile games: two specific games (JAMDAT Bowling, PacMan or Tetris) and two games of their choice.

The Lab members used the Internet as their benchmark for a good mobile experience. They expected the ease, speed, graphics, sound and marketing that they get on the Internet. They were frustrated when downloading a game took over 10 seconds or the graphics weren’t as good as a computer.

All the teens experienced some challenges in finding, downloading or playing games but they expected a learning curve and had the confidence to continue until they figured it out. Three teens had to call customer service to get help; two could not find the games on their phones after purchasing them, and one had to wait five days for an e-mail response. But when it came to rating the overall experience, the average rating was 3 out of 5 or “good.”

The teens were surprised that there weren’t more games that tied into the brands they recognize. They were looking for television and movie tie-ins as well as games they had played on their computers or game consoles. This finding suggests the importance of mobile operators visibly and aggressively marketing branded content.

“The teen demographic is hugely brand-aware,” says June Bower, vice president of marketing for Mobilitec. “The teens are looking for brands they know from movies, TV and games they play on their PC or game console. Teens judge quality and relevance through brands. The teens didn’t know how to make a decision on what to buy when they were presented with a long list of games that were completely unfamiliar to them.”

Most of The Lab members enjoyed the games they bought. And most named other games they would like to buy. They all felt the price, $2 in India to $7 in Europe and the U.S., was too high for length and quality of the games. Many requested more color and better graphics.

Growing up as the Internet generation, 100 percent of The Lab members expected to be marketed to on their phones, just as they are on the Internet, TV and other media. They anticipated advertising or special offers. They wanted e-mail and SMS telling them about new games, good deals and ways to rate and share games they liked with other teens.

“We were surprised to learn that the teens wanted to be marketed to as part of the mobile experience. The Internet generation not only expects but wants to be reached with advertising and special offers that are personal and relevant to them,” says Margaret Norton, president and CEO of Mobilitec. For more information visit www.mobilitec.com.

We are a nation of cyberchondriacs

Searching the Internet for health care information has become more widespread in the past year after three years of little growth, according to a nationwide Harris Poll from Harris Interactive, Rochester, N.Y. Use of the Internet to search for health-related information by online U.S. adults has increased markedly both in terms of percentages (from 72 percent in 2005 to 80 percent now) and in numbers. This brings the number of all U.S. adults who have ever searched for health information online (Harris Interactive refers to them as cyberchondriacs) to 136 million, a 16 percent increase from 117 million in 2005.

The percentage of cyberchondriacs who search online either often or sometimes appears to be rising modestly. Most adults who have ever looked for health information online claim that they have been generally successful in finding what they are looking for. In addition, many believe the information to be at least somewhat reliable, though the percent who think the information is “very reliable” has declined. Somewhat fewer adults say that they are talking to their physicians about the information from the Internet.

The main reason for the increase in online health information searches seems to be that the total number of Internet users has increased somewhat (from 74 percent of all U.S. adults in 2004 to 77 percent now) and the percent of those looking for medical information is increasing as well. Cyberchondriacs now represent 80 percent of all online adults, up substantially from 2005’s 72 percent.

Six in 10 (61 percent) online adults say that they have looked for information about health topics often (21 percent) or sometimes (40 percent), a slight increase of three percentage points from 2005 (58 percent). The percentage of online adults who say they hardly ever or never search for health information has dropped to 39 percent, down from 43 percent in 2005.

Interestingly, while three-quarters (76 percent) of those who have ever searched the Internet for health information have done so one or more times in the last month, this is down from 2005 when 85 percent said that they had gone online one or more times in the past month looking for health information.

On average, a cyberchondriac searches the Internet five times per month, a decrease from the almost seven times per month a year ago and similar to five times per month in 2004.

Similar to 2005 a large majority of cyberchondriacs (88 percent) continues to indicate that they were successful in searching for health information online. Forty-two percent say that they were very successful and another 46 percent say they were somewhat successful.

Eighty-seven percent of cyberchondriacs say that the health information they found online has been reliable (25 percent “very reliable” and 61 percent “somewhat reliable”). Interestingly, this has declined from 2005 when 90 percent felt this way. Of special note, the percentage of those who indicate that online medical information is “very reliable” has declined substantially from 37 percent in 2005 to the current 25 percent.

Cyberchondriacs are not only using the Internet to better educate themselves. Many are also using it to assist in their discussion with their physicians. However, these discussions are taking place in fewer numbers. By 52 to 48 percent, a slight majority of adults who have gone online to get health information say that they have discussed this information with their doctor at least once. This is down from 2005, when a 57 to 43 percent majority indicated this.

Furthermore, fewer than half (45 percent) of cyberchondriacs have searched for health information based on a discussion with their doctor. This is a decrease of seven percentage points from 2005’s 52 percent. The poll was conducted by telephone within the United States between July 5 and 11, 2006 among 1,020 adults (aged 18 and over). For more information visit www.harrisinteractive.com.