Consumer insights and analysis

1. The BIG Call
June 2012
PA M E L A G O O D F E L L O W
CONSUMER INSIGHTS DIRECTOR, BIGINSIGHT™
GUEST CONTRIBUTOR:
JOHN MARIOTTI, PRESIDENT & CEO, THE ENTERPRISE GROUP
400 W. Wilson Bridge Road, Suite 200, Worthington, OH, 43085 614-846-0146 info@BIGinsight.com

2. John Mariotti, President/CEO & Founder of
The Enterprise Group
• Director on corporate boards including:
• World Kitchen, LLC
• MCM Equity Partners
• Previously:
• President of Rubbermaid Office Products Group
• President of Huffy Bicycles
• Chairman of World Kitchen
• Award-winning author
• Written nine business books
• Writing & publishing THE ENTERPRISE, a weekly newsletter & blog, since 2001
• A ProsperNow blogger on FORBES
• A regular contributor to American Express Open Forum blog
• Articles and interviews about his business successes have appeared in The Wall Street
Journal, Fortune, Business Week and many more publications
• Guest on CNBC's Today's Business and Power Lunch shows and a panelist on
MSNBC’S Your Business
© 2012, Prosper®

3. June 2012 Consumer Survey
 June 2012 Results
• Consumer Confidence
• Employment Outlook
• Practical Purchasing
• Financial Forecast
• 90 Day Outlook: Future Purchase Plans
• How is JC Penney’s “Fair & Square” Faring?
This report is derived from the following studies:
• BIGinsight™ Monthly Consumer Survey, June 2012 (N = 8760, respondents surveyed 6/5 – 6/12/12)
• BIGinsight™ Monthly Consumer Survey Trends, June 2007 – June 2012
Disclaimer: BIGinsight™ is a trademark of Prosper Business Development Corp. Services are delivered by Prosper and/or a Prosper affiliated company (“Prosper”).
Prosper makes no warranties, either expressed or implied, concerning: data gathered or obtained from any source; the present or future methodology employed in
producing the statistics; or the data and estimates represent only the opinion of Prosper and reliance thereon and use thereof shall be at the user’s own risk.
© 2012, Prosper®

4. Consumer Confidence
Confident/Very Confident in Chances for a Strong Economy
Adults 18+
40%
 Highlights:
35% • Confidence in the economy is
cooling off as summer heats
30%
32.4% up…
27.8% 31.3%
 Down a point from April
25%
 Second consecutive month of
decline
20%
• Relatively more optimistic
compared to Jun-11 and Jun-10
15%
© 2012, Prosper® Source: BIGinsight™ Monthly Consumer Survey, JUN 11-12

5. Consumer Confidence
Confident/Very Confident in Chances for a Strong Economy
Adults 18+ 28%+
decline
40% 50%
from
45% Jun-07
35% 40%
35%
32.4%
30% 30%
27.8% 31.3%
25%
25% 20%
15%
20% 10%
32.4%
43.9%
18.8%
30.2%
30.2%
27.8%
31.3%
5%
15% 0%
Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 May-12 Jun-12
© 2012, Prosper® Source: BIGinsight™ Monthly Consumer Survey, JUN 07-12

6. Consumer Confidence
Virtually NO change over past 4 years—Few Reasons to be
Confident:
—High US Debt & Huge Deficits = Bad News for Future
—Loss of Home Equity/Value = Feel Poorer
—Slow, Sporadic Growth in Economy = Fewer New Jobs
—More Americans Unemployed, Longer
Government Leaders—CAN’T, WON’T… or DON’T… Fix This
AMERICANS EXPECT WHAT? MORE OF THE SAME! SEE?
© 2012, Prosper®

7. Employment Outlook
Regarding the U.S. employment environment, over the next 6 months, do you think that there
will be more, the same, or fewer layoffs than at present?
Adults 18+  Highlights:
More Same Fewer U.S. Unemployment Rate* • One in four expecting “more”
100% 10.0% layoffs over the next six months
90% 19.2% 17.4% 16.6%  Up nearly four points from a
21.3%
9.5% month ago
U.S. Unemployment Rate*
80% 9.6%*
• Fewer than one in five calling
Layoff Predictions
70%
9.0% 9.0% for “fewer” layoffs
60%
52.2% 54.6% 56.3% • Optimism fails to appear even
50% 55.5% 8.5% as Unemployment Rate
8.2%
40% declines
8.0%  Unemployment Rate has
30% 8.1% declined 15% from Jun-10
20%  Expecting “more” has only
7.5%
28.6% 28.1% 27.0%
10% 23.3% decreased 5% within same time
period
0% 7.0%
Jun-10 Jun-11 May-12 Jun-12 • Employment mantra = more of
the “same.”
* U.S. Unemployment Rate for the previous month for each corresponding MMM-YY, as reported by the U.S. Bureau of Labor Statistics.
© 2012, Prosper® Source: BIGinsight™ Monthly Consumer Survey, JUN 10-12

8. Employment Outlook
FUD Part I: Fear Uncertainty & Doubt … CONTINUE
—Higher Productivity = More Competitive
—Fewer People Do More Work = Fewer Jobs
—Supply of Workers >> Demand for Employees (4:1)
—High Tech/High Skill Jobs go Unfilled, (or in Wrong Locations)
—Low Tech/Low Skill Jobs More Numerous (and Low Pay)
Creates Downward Pressure on All Wages (Impact on Spending?)
© 2012, Prosper®

9. Practical Purchasing
In the last 6 months, have you made any of the following changes?
Adults 18+
60%
 Highlights:
54.7% • Last month’s “dip” in
55%
55.2%
practicality appears to have
been a “blip”
50%
 Nearly half pragmatic in
48.5% 48.2%
spending (48.2%)
45%  On par with Jun-11,
though elevated from
40% previous years
• 54.7% are focused on
35% necessities
 Consistent with June
I have become more practical and realistic in my purchases figures recorded during
I focus more on what I NEED rather than what I WANT and after the recession
© 2012, Prosper® Source: BIGinsight™ Monthly Consumer Survey, JUN 11-12

10. Practical Purchasing
FUD Part II Fear, Uncertainty & Doubt = “Paralysis”
When $$$$ Are Scarce,
—Needs Dominate Over Wants
—Shop for Value/Bargains, Low Cost Brands & Items
Summer Doldrums Don’t Help:
—Frugal Vacations Consume Spending,
—Summer jobs are scarce, activities cost $$
—$3.50/ Gal. Gas Still Means a $40-50 Fill-Up
Back to School Needs are Coming—Bargain Hunting Time
What Else to Do???
© 2012, Prosper®

11. Financial Forecast
Which of the following financial steps are you planning to take in the next 3 months?
Adults 18+
Jun-11 May-12 Jun-12  Highlights:
• Cutting Spending and Debt
remain fiscal priorities
Decrease overall spending
 Decreasing overall spending =
32.8%
 Paying down debt = 32.6%
Pay down debt
 Both plans on the rise from Jun-
11
• Increasing savings holds
Increase savings relatively steady
Pay with cash more often
0% 5% 10% 15% 20% 25% 30% 35% 40%
© 2012, Prosper® Source: BIGinsight™ Monthly Consumer Survey, JUN 11-12

12. Financial Forecast
Consumers Are Stretched to the Breaking Point
Short of $$ to Spend (Discretionary spending even worse)
Want to Pay Down Debt, but Limited $$ to Do So
Wish They Could Save, but Limited $$ to Do So
Need to Just “Get By” and “Make Ends Meet”
So Look What Happens to Savings…
© 2012, Prosper®

13. Savings Summary
How much of your annual income do you estimate you saved in the last 12 months (including
any money saved towards retirement, education, liquid savings, etc.)?
Adults 18+
45%  Highlights:
• More than one-third (33.9%) is not
40% saving any income at all
 On the decline since peaking in
35%
Jun-10 (38.2%), has yet to
30%
recede to Jun-07 level (29.3%)
• Those saving between 1% and
25% 10% slowly declining since Jun-07
• Nearly one in five are saving 11%
20%
to 20%, nearing pre-recession level
15%
• Balance are saving 21% to 50%
(6.2%) or more than 50% (2.0%) of
10% their incomes
Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12  Though small, these figures
0% 1 to 10% 11 to 20% have both increased slightly
since Jun-07
© 2012, Prosper® Source: BIGinsight™ Monthly Consumer Survey, JUN 07-12

14. Savings Summary
After “FUD” Wears Down Americans…
…The “Stockholm Syndrome” Grabs Them!
(This terms comes from when people held hostage begin to
accept and feel better about their captors.)
When Things Have Been Bad (or Not Good) for So Long, Even a
Small Change/Improvement Starts to Look Good
Example: When job growth is below 125,000 per month, a
month or two above 125,000 looks good, but 150,000 new
jobs/month are needed to just absorb new workforce entrants,
which doesn’t really help unemployment—it just hasn’t gotten
any worse.
BUT—Reality “Bites”—Shows the Improvements Were “Illusory”
Take a Look….
© 2012, Prosper®

15. BIG Forward Look: 90 Day Spending
Over the next 90 days (June, July and August), do you plan on spending more, the same or
less on the following items than you would normally spend at this time of the year?
Adults 18+
Retail Merchandise Categories - 90 Day Outlook
(Jun-12 compared to May-12, Jun-11, and Jun-10)
Category: May-12 Jun-11 Jun-10 Category: May-12 Jun-11 Jun-10
Children’s down up up Toys/Games down up up
Women’s Dress down up up CDs/DVDs/Videos/Books up up up
Women’s Casual down up up Electronics flat up up
Men’s Dress down up up Groceries up up up
Men’s Casual down up up Home Improvement flat up up
Shoes flat up up Lawn & Garden down up up
HBC down up up Home Furniture down up up
Dining Out down up up Home Décor down up up
Sporting Goods down up up Linens/Bedding/Draperies down up up
Note: “Up,” Down,” “Flat” refers to the direction of the Diffusion Index compared to the previous month (May-12) or years (Jun-11, Jun-10). Diffusion Index = %
Spending More - % Spending Less.
© 2012, Prosper® Source: BIGinsight™ Monthly Consumer Survey, JUN 10-12

16. BIG Forward Look: 90 Day Spending
Spending Plans are UP —YOY (Year over prior Year)
Spending Plans are DOWN — MOM (Month over prior Month)
Consumers’ Psyche Damaged by Continued FUD, Little Progress
HOPE & CHANGE (Americans promised & waiting for it…)
Became:
HOPE-LESS AND UN-CHANGED (From 2009-2012)
HOW WOULD YOU—HOW DO YOU—FEEL???
NEVER FEAR—THE HOLIDAY SEASON IS JUST 4-5 MONTHS
AWAY (As are the Nov. Elections!)
EXPECT: CONSUMERS ECONOMIZE NOW TO SPEND THEN
© 2012, Prosper®

17. How is JC Penney’s “Fair & Square” Faring?
Women’s Clothing – Shop Most Often
Adults 18+
JC Penney Macy's
 Highlights:
11%
• Traditionally #3 in Women’s
10% Clothing, since the launch of
"Fair & Square" “Fair & Square,” JC Penney has
Commences
9% fallen to #4, behind Macy’s
• For more, click over to the
8%
BIG Consumer Blog
7%  Includes 10 year trends for
Top 5 Women’s Clothing
6% retailers (Walmart, Kohl’s,
Macy’s, JC Penney, Target)
5%  “Hot or Not?” trended
graphic for JCP “Fair &
4%
Square” (Mar-12 vs. Jun-12)
NEW Blog
“Fair & Square” Revisited
© 2012, Prosper® Source: BIGinsight™ Monthly Consumer Survey, JUN 11-12

18. How is JC Penney’s “Fair & Square” Faring?
CHANGE IS HARD, and THE TRANSITION IS BRUTAL (PAINFUL)
Consumer Habits—Buying ON SALE (Built over years) = Hard To
Change (As shown in many past BIG Calls)
—EDLP—Tried and Failed by Other Retailers (Sears, Kmart, etc.)
—Couldn’t generate enough traffic/sales to Span the Dip in revenue.
—Internet pricing transparency adds pressure to EDLP
—MACY’S “sizzle”—head start: Celebrity/Brands + “SALES”
WALL STREET IS NOT PATIENT WITH TRANSITIONS (EPS drop)
(But patient, persistence is necessary…)
WHAT NOW? WE’LL SEE: MAYBE…
Less Complexity (“Clean House”) Shed “Old JCP” Image
Intensify Focus, Change Mix & Presentation even Faster
Create More “Sizzle”—Increase Traffic—Reason to Shop
BUT Still—Big Change IS Risky!
© 2012, Prosper®

19. BIG Consumer
Generation Gap: Are School Standards Sinking? view
“Fair & Square” Revisited view
Blog
The Father’s Day / Mother’s Day Spending Gap
Explained [?] view
Talking to Text: Harmless or Hindering to Drivers? view
Mommy Blog: Summertime Fun view
A Dog’s Life is for the Birds: “Low Price” Isn’t Key When
Buying Food for these Family Members view
Graduation 2012: Paper or Plastic? view
Mobile Users Speak…to Their Devices! view
Three Wishes: A Remodeling Fairytale view
Pain at the Pump Blog Series view
© 2012, Prosper®

20. Contact 400 W. Wilson Bridge Road
Suite 200
Worthington, OH 43085
Ph: 614-846-0146
info@BIGinsight.com
for complimentary insights, visit:
www.BIGinsight.com
For more about John Mariotti:
http://www.mariotti.net/
_
and
_
“Telling It Like It Is” Blog
© 2012, Prosper®