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.
Walgreens positions itself as a go-to for pertussis concerns
WHAT IT MEANS AND WHY IT’S IMPORTANT The heartbreaking news is that California is battling an unnerving whooping cough epidemic that unfortunately already has claimed the lives of nine babies. But the silver lining — if there is one — lies in the fact that this gives rise to another opportunity for retail pharmacy to demonstrate the critical role it plays in public health crisis management.
(THE NEWS: Calif. health officials address ‘whooping cough’ outbreak. For the full story, click here)
As state health officials are urging Californians to be immunized in hopes of stemming the pertussis outbreak that is sweeping throughout the state, more than 4,000 cases have been reported — nine deaths have been reported of which eight were Hispanic infants. Eight fatalities were infants less than 2 months of age at the time of the disease’s onset and had not received any doses of pertussis-containing vaccine; the ninth was 2 months of age and had received the first dose of DTaP only 15 days prior to the disease onset, according to the California Department of Public Health. Most of the infant cases in 2010 have occurred in infants younger than 3 months of age. Meanwhile, the majority of adolescent cases are in 10- to 11-year-olds.
Because children are most vulnerable to this highly contagious disease, health officials are urging anyone who is in contact with children to be immunized, and for those children of proper age to be immunized.
As we’ve seen with regard to the seasonal flu, H1N1 and other public health concerns, retail pharmacies are in an ideal position to assist in such matters given their convenient locations and hours of operation. This fact once again is evident, as Walgreens has announced that its pharmacists in select California stores can administer whooping cough vaccines.
Currently, 150 Walgreens locations are offering the vaccine, but the retailer has 575 stores throughout the state and will be working to add more stores to the list. As of 2009, the number of pharmacy outlets in California stood at 1,957 independents, 2,174 traditional chains, 645 supermarkets and 557 mass merchandisers, according to the National Association of Chain Drug Stores.
Once again, retail pharmacy is positioning itself along the frontlines of health care.
Calif. health officials address ‘whooping cough’ outbreak
SACRAMENTO, Calif. California health officials and healthcare professionals are urging Californians to get vaccinated, as the state is on pace for the worst epidemic of pertussis, more commonly known as whooping cough, in more than 50 years. The disease already has claimed the lives of nine infants in the state.
"Whooping cough is now an epidemic in California. Children should be vaccinated against the disease, and parents, family members and caregivers of infants need a booster shot," stated Mark Horton, director of the California Department of Public Health.
As of Sept. 14, there were 4,017 cases of the illness reported for a state rate of 10.3 cases for every 100,000 people. Of that number, 3,985 of the reported cases experienced disease onset in 2010, according to the California Department of Public Health.
This marked the most cases reported in 55 years, when 4,949 cases were reported in 1955, and the highest incidence in 48 years, when a rate of 10.9 cases per 100,000 people was reported in 1962. Previously, the peak was in 2005, when there were 3,182 cases reported, according to the CDPH.
Pertussis is a highly contagious disease. Unimmunized or incompletely immunized young infants are particularly vulnerable. Since 1998, more than 80% of the infants in California who have died from pertussis have been Hispanic.
The vaccine begins at 2 months of age, but young infants are not adequately protected until the initial series of three shots is complete at 6 months of age. The series of shots that most children receive wears off by the time they finish middle school, according to the CDPH.
In response to the epidemic, Walgreens announced that its pharmacists in California were offering pertussis immunizations (tetanus/diphtheria/pertussis-Tdap vaccine) at more than 150 select stores throughout the state. Walgreens pharmacists in the state can administer immunizations to anyone age 9 years and older. With more than 575 stores throughout California, Walgreens will continue to add locations that can administer the whooping cough vaccine.
"We share in the recommendations of state and federal health officials that the best thing people can do to keep themselves and their families healthy during this epidemic is to get vaccinated," stated Bill Hose, California market VP for Walgreens. "In addition to children, who are the most vulnerable, those who care for or are in contact with children should also be immunized, and we’re continuing to stress these important statewide recommendations to our patients, customers and the general public."