SymphonyIRI examines lower-income shoppers’ spending habits
CHICAGO Even in a challenging and rapidly changing marketplace, lower-income shoppers will generate $115 billion in incremental spending during the next decade, the SymphonyIRI Group reported Monday in its fourth annual research report, “The Lower-Income Shopper Report: Serving Lower-Income/Multicultural Shopper Micro-Segments.” Yet, they are one of the most misunderstood, ethnically diverse and underserved shopper segments in the United States, SymphonyIRI added.
“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,” stated Sean Seitzinger, partner, Symphony Consulting at 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.”
“The ‘Lower-Income Shopper Report’ exemplifies our continuing commitment to be industry leaders in providing actionable thought leadership to the [consumer packaged good] industry,” noted Krishnakumar Davey, managing director, Symphony Consulting at SymphonyIRI Group. “Specifically, this report will help the industry better understand the current and emerging needs of lower-income shoppers, so that retailers and manufacturers can tailor their offerings for the varied lower-income/multicultural microsegments.”
The “Lower-Income Shopper Report” is built on a four-year history of shopper behavior across five lower-income/multicultural segments — Hispanic households, African American households, young households ages 25 to 34 years, older/senior households ages 65 years and older, and households with children — and examined what is important to each group and what it will take to be successful in serving their changing needs.
Lower-income consumers frequently shop but generally spend less per trip than average, often shopping only with a paycheck or pocket cash. African-American lower-income consumers make the most retail shopping trips per year with 177 trips. Seniors make 169 trips, and Hispanics make 168. Lower-income households with children spend the most at $39.65 per trip, followed by younger households at $37.58.
Although lower- and higher-income shoppers both report careful trip planning, more than half routinely make unplanned purchases while in the store. At the same time, 49% of lower-income shoppers are much more likely to track their spending during the trip and make budget driven decisions on the fly, versus 38% of higher-income shoppers.
Over the past two years, half of lower-income shoppers report that they have decreased spending in discretionary areas, including home furnishings and furniture, in order to better afford essentials, such as food and health care. For example, spending on clothing and shoes has decreased by 43%, while spending on food and beverages and healthcare products has increased by 31% and 27%, respectively.
In selecting individual products in the store, lower- and higher-income shoppers are heavily influenced by promotional pricing and products for which they have a coupon. Higher-income shoppers more likely are to be influenced by past usage, TV and print advertising, and recommendations from friends.
Lower-income shoppers across the board are turning to private-label products to save money; however, there are some nuances regarding private-label attitudes. For instance, 29% of older lower-income households think name brands are worth the extra price versus 46% of African-Americans, who appear to the be the most brand loyal micro segment.
In addition, 64% of younger households and households with children are willing to sacrifice quality to get a better price on a product versus 51% of older households. And, 70% of households with children will switch to another brand if it’s cheaper versus 60% of African-Americans.
Fitting the diverse nature of lower-income households, their lifestyles and attitudes toward health vary broadly. For example, 76% of older households said eating healthy is important versus 65% of younger households. On the opposite end of the spectrum, only 41% of older households said projecting a good image is important, versus 64% of African-Americans and 62% of households with children.
When shopping for specific products, better-for-you attributes are important to all microsegments but with important variations. Older households are primarily focused on whole grains/high fiber and weight-management attributes, while Hispanics place a higher relative importance on natural foods, super foods and those enriched with protein.
Drug-resistant bacterial infections reported in 20 states, worldwide
ARLINGTON, Va. Drug-resistant bacterial infections recently have been reported in more than 20 states across the United States, and now are responsible for an outbreak in Tel Aviv, Israel, according to a report in USA Today on Thursday, citing information from the Society for Healthcare Epidemiology of America.
The bacterial infections prove fatal in as many as 60% of all cases.
The outbreak in Tel Aviv has been traced to northern New Jersey, Neil Fishman, director of SHEA, told the national daily. The bacteria in question are equipped with a gene that enables them to produce an enzyme that disables antibiotics. The enzyme is called Klebsiella pneumoniae carbapenamase, or KPC. It disables carbapenem antibiotics, or last-ditch treatments for infections that don’t respond to other drugs.
The infections are taking place primarily in hospital settings and have not yet spread to the general community.
The problem may be of greater concern than methicillin-resistant Staphylococcus aureus, or MRSA, given the number of alternative treatments that are available. The only drug that appears to make any headway against carbapenem-resistant germs is polymyxin, a medicine that has fallen out of favor with doctors given the toxicity to the kidneys, Fishman said.
FDA should consult advisory committees on DXM issue
WHAT IT MEANS AND WHY IT’S IMPORTANT While the advisory committee vote of 15 opposed and nine in favor of scheduling the all-too-common cough-relieving ingredient dextromethorphan as a controlled substance might seem like a healthy indicator as to which direction the Food and Drug Administration will act on this issue, make no mistake: it is by no means a certainty. This still may be an issue for cough-cold season 2011-2012.
(THE NEWS: FDA advisory committees forgo restricting cough-cold sales, CHPA responds. For the full story, click here)
But here are more than a few reasons why the FDA should act in concert with its advisory committees on this issue.
Restricting access to a cough-relieving ingredient as prevalent as DXM would increase healthcare costs, those opposed to scheduling the ingredient have argued. That’s because consumers in search of cough-cold relief now would need to schedule and pay for a doctor’s appointment. Such a wholesale change in the access to common cough-cold ingredients also very well may impede labor productivity as well, because those consumers who schedule that doctor’s appointment likely will miss work, and those consumers who decide to just suffer through their illness likely will be less productive at work.
More important, scheduling DXM may not accomplish its stated objective, whether that’s reducing teenage access to DXM or reducing the number of teenagers who potentially would abuse DXM. That’s because teenagers aren’t necessarily acquiring their DXM “fix” from retailers — they more easily can acquire DXM from online resources or by sifting through their parents’ medicine cabinets. And retail pharmacy already has procedures and programs in place to reduce either access or incidence. It’s something, as a group, that they’ve been doing for years.
Retailers, for example, enforce an age restriction on the sale of DXM — not selling products to minors under the age of 18 years. And the National Association of Chain Drug Stores recently testified that retail pharmacy would fully support codifying this age restriction, an approach that last year had been submitted to Congress by Sen. Dick Durbin, D-Ill.
Similarly, both NACDS and the Consumer Healthcare Products Association supported legislation that would restrict the sale of bulk dextromethorphan to any entity not registered with the FDA. That’s a law that significantly would inhibit any Internet sales of DXM products to minors.
The CHPA also aggressively has been raising awareness among parents and other concerned groups — teachers for example — about the abuse potential of any medicines that can be found in that medicine cabinet, not just DXM. The CHPA’s attention to this issue is nothing new — the organization actively has been addressing this concern with such partners as the Partnership for a Drug-Free America since 2003.
Last year, all of the industry’s efforts to raise awareness around the teenage abuse of medicines were combined into one comprehensive website: StopMedicineAbuse.org. The site is a portal that affords easy access to all the industry’s initiatives and interactive programs that engage parents and community leaders in the fight against teen cough-medicine abuse.