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What do women want? Isn’t that the age old question? A professor of marketing, Edward M. Tauber published a groundbreaking article in 1972 entitled “Why Do People Shop?” in the Journal of Marketing. His study turned on its head the conventional wisdom that women, or people, just shop to get what they need or want. Professor Tauber proved there are many more motives and drives, both personal and social, behind retail shopping.
His research catalyzed an entire cottage industry of behavioral scientists working feverishly to discover ways to attract and retain customers at all kinds of establishments. Minneapolis marketing strategist, Little & Co has just released a report updating the good professor’s work for the 21st century.
Their Big Takeaway
“Shop Talk: Building Brand Loyalty by Understanding Today’s Shopping Behaviors and Realities” may be a mouthful but it offers a valuable look into today’s shopper’s psyche. To boil it down there are six basic styles of shoppers and certain retail establishments have taken this and run with it. A surprising mix of retailers caters to the six different shopping personas:
- Inspiration Seekers- Enjoy a creative shopping experience.
- Shopping Socialites- Enjoy shopping with other people or a socially engaging shopping outing.
- Treasure Hunters- The lure of the bargain is the real adventure for them.
- Brand Worshippers- Enjoy identifying with the image of their brand.
- Pampered Guests- The ‘If you want my custom, then coddle me’ shopper.
- Self-Expressionists- The styling, trend- setter, fashion-forward shopper.
Some retailers that ‘get it’ are: Whole Foods, Kohl’s, Francesca's Holdings, Lululemon and Nike.
Women Want These Companies
While the study did not list a publicly traded company that caters to the Inspiration Seeker I am willing to theorize that Francesca’s Holdings Corporation (NASDAQ: FRAN) with its eclectic boutique type stores entice the inspiration shoppers with their unique and tactile offerings. The artist that is the inspiration seeker can find an outlet for a creative wardrobe impulse at Francesca’s Collections. Francesca’s, the stock is slowly climbing back after a disastrous social media gaffe by the former CFO who inappropriately tweeted before an earnings release that the numbers were good and the board was happy. The stock plunged from the low 30’s to low 20’s even though they canned the CFO. But quarterly revenue growth is 48.60% year over year and the last ER guidance was very upbeat. Fran could power much higher now that the twitter debacle is behind them.
Little & Co. mentioned Whole Foods Market Inc (NASDAQ: WFM) is a winner when it comes to the Shopping Socialite with its in store events, cooking classes, samplings and their Wellness Clubs giving the sociable shopper opportunities to interact with people. This ‘sociability quotient’ is something Wall Street underestimates but Whole Foods Market even at 52-week highs could run higher. One thing the study doesn’t mention are the mini-restaurants that are a magnet for sociable shoppers making Whole Foods a more socially engaging experience than Wal-Mart or Safeway. Well known short seller Jim Chanos just went long on Whole Foods at a price around $87.69 for a 5% position in his portfolio. The company has a P/E of 40.91 and a dividend of 0.60%.
Ah, the Treasure Hunters, I must count myself among them. One store luring in the Treasure Hunter is Kohl’s Corp (NYSE: KSS). With its frequent coupons, discount cards and sales the store is very attractive to the bargain hunter who can leverage all these discounts for a purchase price she can brag about. J.C. Penney’s used to own these shoppers but lost sight of the Treasure Hunter as their customer base. Kohl’s is trading just 10% shy of its 52 week high and surprisingly has a 2.50% yield and a 12.11 P/E. For value and growth Kohl’s is looking very good here now that it’s snared the Penney’s patrons.
The Brand Worshippers bow at the hem of Canadian yoga attire company Lululemon Athletica Inc. (NASDAQ: LULU). This one is down considerably from its 52 week high of $81.09. While it does have a high P/E of 44.60 its quarterly revenues are 53.00% year over year and it has an institutional hold at 105.80%. Lululemon has great brand loyalty as it is a lifestyle name. The stores have frequent fitness activities for customers including running clubs and yoga demonstrations. The company website is quite interactive as well with blogs of interest to the Lululemonite. Lululemon has a very high short interest of over 25% and is always in danger of bear raids but short squeezes are the other side of the Loonie.
Nike Inc (NYSE: NKE) is another name the study mentioned as having very strong brand loyalty among shoppers citing the new Nike + trainers as a draw for the serious athletic woman. Nike is a company that has always been responsive to their customers and brand loyalists appreciate that. Nike is a solid name in retailing since its founding in 1964. The name is down $20 from its high of $114.81 and analysts see a price target of $105.40. The P/E is more reasonable than Lululemon at 20.04 and it has a yield of 1.50%. Nike has proven to be a good long term hold and pullbacks should be considered buying opportunities.
Time to Checkout
I don’t know what type of shopping persona you have but among this varied assortment of retailers one should strike your fancy. Maybe buy one that matches your own persona or just go for value and get a bargain. These names have done pretty well over the last year and are proof knowing what women want makes money.
leglamp has no positions in the stocks mentioned above. The Motley Fool owns shares of Lululemon Athletica and Whole Foods Market. Motley Fool newsletter services recommend Lululemon Athletica, Nike, and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.