According to SymphonyIRI’s “The Lower-Income Shopper Report: Serving Lower-Income/Multicultural Shopper Micro-Segments,” this market represents $115 billion in incremental spending during the next decade. During the past two years, the group has decreased spending on clothes and shoes by 43% while increasing spending on foods and beverages.
“Many retailers and manufacturers take a one-size-fits-all approach to reaching lower-income shoppers, but with a $115 billion opportunity at stake and increasing competition to win their share of wallet, a mass market view of these shoppers will not be enough to win their loyalty,” said Sean Seitzinger, partner with Symphony Consulting, SymphonyIRI Group. “Only those retailers and manufacturers that embrace a micro-segmentation strategy to truly understand the needs and wants of these varied, nuanced and multicultural shopper groups will be able to serve them effectively and profitably.”
African American lower-income consumers make the most shopping trips per year followed by seniors and Hispanics. While lower-income shoppers are careful to plan their shopping trips, more than half routinely make unplanned purchases in the store, but 49% of these consumers are much more likely to track their spending during the trip and make budget-driven impulsive decisions compared with 38% of higher-income consumers.
While lower-income consumers are in general turning to private label products to save money, 29% of older lower-income households think name brands are worth the extra price compared with 46% of African Americans. Also, 64% of younger households and households with children will sacrifice quality to get a better price compared with 51% of older households. Seventy per cent of households with children will switch to another brand if it’s cheaper compared with 60% of African Americans.
Older shoppers are also more focused on each component of the store’s value proposition as well as store brand quality and helpful employees. Specifically, 96% of older lower-income shoppers look for stores with good value for the money compared with 87% of Hispanic households and 86% of younger households.
Older households also ranked higher in saying eating healthy is important compared with younger households.
