Annual Edition 'Buying Power of
Black America' report breaks down billions in expenditures Black
consumers are responding to tighter economic condition by focusing more of
their spending on items and services that improve their homes and
lifestyle. That's one of the trends revealed in the 15th annual report,
"The Buying Power of Black America," published by Target Market News. The
report analyzes spending for black households in 2008 and finds that
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Research on lower-income ethnic shoppers shows $115 Billion opportunity
(September 20, 2010) Even in a challenging and rapidly changing
marketplace, lower-income shoppers will generate $115 billion in
incremental spending during the next decade. However, they are one of
the most misunderstood, ethnically-diverse and underserved shopper
segments in the United States. To help retailers and manufacturers truly
grasp the behavioral and attitudinal differences across five key
lower-income micro-segments, SymphonyIRI Group, Inc. is releasing its
fourth annual research report, "The Lower-Income Shopper Report: Serving
Lower-Income/Multicultural Shopper Micro-Segments."
"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,"
says Sean Seitzinger, partner, 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."
"The 'Lower-Income Shopper Report' exemplifies our continuing commitment
to be industry leaders in providing actionable thought leadership to the
CPG industry," says Dr. Krishnakumar (KK) S. Davey, managing director,
Symphony Consulting, 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
Lower-Income Micro Segments
The "Lower-Income Shopper Report" is built on a four-year history of
shopper behavior across the following five lower-income/multicultural
segments and examines what is important to each group and what it will
take to be successful in serving their changing needs: Hispanic
households, African American households, young households aged 25-34,
older/senior households aged 65 and older, and households with children.
Shopping and Spending Trends
Lower-income consumers frequently shop but generally spend less per trip
than average, often shopping with only a paycheck or pocket cash.
African American lower-income consumers make the most retail shopping
trips per year with 177 trips, seniors make 169, 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 percent 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 percent of higher-income shoppers.
During 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 healthcare. For example, spending on clothing and shoes has
decreased by 43 percent, while spending on food and beverages and
healthcare products has increased by 31 percent and 27 percent,
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 are more likely to be
influenced by past usage, television 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 percent of older lower-income
households think name brands are worth the extra price versus 46 percent
of African Americans, who appear to the be the most brand loyal micro
In addition, 64 percent of younger households and households with
children are willing to sacrifice quality to get a better price on a
product versus 51 percent of older households. And, 70 percent of
households with children will switch to another brand if it's cheaper
versus 60 percent of African Americans.
Needs, Wants and Satisfaction
When selecting a grocery store, older shoppers are very focused on each
component of the store's value proposition as well as store brand
quality and helpful employees. For instance, 96 percent of older
lower-income shoppers look for stores that offer good value for the
money compared to 87 percent of Hispanic households and 86 percent of
younger households. Interestingly, younger shoppers score lower on all
criteria in selecting a store except for ethnic/specialty food variety,
with 61 percent needing variety versus 48 percent of older households.
Looking at satisfaction levels across all micro segments, older
households show the highest levels of satisfaction on nearly every
criterion, while younger households indicate consistently lower levels
of satisfaction, indicating opportunities for retailers.
Health, Wellness and Lifestyle
Fitting the diverse nature of lower-income households, their lifestyles
and attitudes toward health vary broadly. For example, 76 percent of
older households say eating healthy is important versus 65 percent of
younger households. On the opposite end of the spectrum, only 41 percent
of older households say projecting a good image is important versus 64
percent of African Americans and 62 percent of households with children.
When shopping for specific products, better-for-you attributes are
important to all micro segments but with important variations. Older
households are primarily focused on whole grains/high fiber as well as
weight management attributes, while Hispanics place a higher relative
importance on natural foods, super foods, and those enriched with
SymphonyIRI Shopper Webinar
SymphonyIRI is offering a free webinar, entitled "The 2010 Lower-Income
Shopper" at 11 a.m. CT on Sept. 23. To register for the webinar, hosted
by consumer trends expert Sean Seitzinger, please visit:
"The Lower-Income/Multicultural Shopper Report: Serving Lower-Income
Shopper Micro-Segments" is a culmination of research that includes an
exclusive SymphonyIRI AttitudeLink survey of shoppers, proprietary
SymphonyIRI InfoScan® and Consumer Network® data. For detailed
information about the research's availability and pricing, contact Sean
Seitzinger at email@example.com