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.
NACDS urging flexible health IT approach as HHS works to adjust patient records law
WHAT IT MEANS AND WHY IT’S IMPORTANT Shifting the nation’s sprawling and disconnected healthcare system to an integrated platform, based at last on health information technology and electronic health records, is a worthy and overdue undertaking. But striking the right balance between opening the spigot of patient information to streamline care and improve decision-making by health professionals, while protecting patient privacy, is a challenge that both health professionals and government policy-makers have been grappling with since the advent of computers in physicians’ offices and pharmacies.
(THE NEWS: White House continues health IT drive as CMS offers matching funds to states. For the full story, click here)
There’s no disputing the value health IT and EHRs can bring to this nation’s fractured and sometimes irrational system of health care. A fully integrated network that exchanges patient records among health professionals would revolutionize the whole system, knocking down silos and linking up the doctors, labs, pharmacies, nursing groups and health plans that all play a key role in a patient’s health and wellbeing, and getting them finally to talk to one another. The result could be a dramatic reduction in costs for needless and redundant tests, double-filled prescriptions, drug interactions and non-adherence. It would mean a smarter and far more cost-effective network for improving patient outcomes and rationalizing the decisions made by health stakeholders in patients’ care regimens.
Understandably, the federal health officials charged with driving the health IT revolution are moving cautiously, even as they continue to open the stimulus funding spigot for adoption of EHRs to more states.
Their goal: to avoid compromising the privacy of patients’ health records in the conversion to electronic recordkeeping and transmission of patient data. But privacy concerns, argue pharmacy advocates, needn’t block the necessary flow of protected patient data that must occur if a more integrated and rational health care system is to become more than just an elusive and always out-of-reach pipe dream.
On Monday, the National Association of Chain Drug Stores took another stab at the issue, with a written plea to Secretary of Health and Human Services Kathleen Sebelius. Essentially, NACDS is asking the White House to maintain a flexible and workable approach as it uses its stimulus funds and regulatory powers to usher in the electronic health revolution.
That means, NACDS told Sebelius, that the government shouldn’t impose on pharmacies and physicians a requirement that they obtain prior authorization from patients for the use and transmission of protected health records.
NACDS is on solid ground here. Two major considerations support their plea to HHS: one, the privacy of patient data is already amply protected by the privacy statutes embodied in the Health Information Portability and Accountability Act of 1996, or HIPAA. Two, the imposition of disclosure requirements and “opt-in, opt-out” prior-authorization rules on every patient exchange with a doctor or pharmacist could create enough confusion and bottlenecks to ground the nation’s critically important transformation to health IT to a halt.