Enterprise Marketing & Promotions Management

How Today’s Economic Divide Impacts Advertisers

By / March 2017


When targeting today’s consumer, it is very important that you take the time to understand them.  Now more than ever, the differences between groups can make or break a great marketing campaign.  There is one group that is often over looked.  The group is referred to as the “Have Nots”.  They are comprised of all generations, genders, and ethnicities.  What sets them apart from the other 47% of the population is household income.  The definition of Have Nots is annual household income of $60,000 or less and their average household income is $28,919.  Despite representing over half of the households in American they only account for 25% of the wealth.  In contrast their counterparts the “Haves” represent less than half of the population but a whopping 75% of the wealth with a median household income of $104,672.  And here you can begin to see where the chasm lies. Despite a growing economy and decreasing unemployment, the wealth gap in America continues to increase.  Advertisers can no longer effectively market with one message and while most retailers continue to focus on the “middle class” or affluent they are missing a great opportunity if they don’t take the time to understand this lower income group.  To understand the Have Nots, you must take a step back from your own reflection and understand how this consumer makes decisions.  Living pay check to pay check means buying spending as little as possible.  The growth of the Dollar Stores is no mystery when you consider that these consumers must make their dollars go as far as possible and the dollar store format offers smaller and less expensive packages.

Some facts of the Have Nots will give you a better understanding of the group. Thirty Four percent of the Have Nots are Millennials, followed by 32% Baby Boomers, 26% Gen X and only 8% seniors.  Because of staggering student loans, many Millennials are likely to stay in the Have Not group for quite some time.  When it comes to living arrangements; 48% own their home, 41% rent and 10% live with their parents. Sixty five percent are smartphone users while 22% have cell phones.

An interesting example of one retailer who sees an opportunity is Amazon. Today only 24% of the Have Nots have an Amazon prime membership, not surprising given the hefty annual fee. Amazon is paying attention and has created a new monthly membership option at $10.99 a month that will allow this consumer an easier way to join by spreading out payments.  The kicker is that once the year is over they will have paid $35 more than the traditional fee.  This new initiative illustrates that Amazon knows what an important group this is.

When it comes to messaging, you may think this consumer is looking for a deal.  Think again.  A deal may not be the absolute lowest price and that is what they want.  More affluent consumers may want a designer bag for less or organic produce on sale.  Have Nots are looking for the absolute lowest price so make sure your messaging reflects it.

Another interesting aspect of the Have Not consumer is Federal assistance.  In 2007, 26.3 million people received the Supplemental Nutrition Assistance Program [SNAP] which gave out $30.4 Billion dollars in aid.  In 2015 those numbers jumped to 45.5 million people and $69.7 billion in assistance.  This is yet another example of the growing population of Have Nots. When you look at where these dollars are going you find that 47% of food stamps were spent at super stores even though they represent only 7% of the stores that accept SNAP and Walmart got 18% of these dollars compared to the 4% of US Food sales they represent.  For now, Amazon has not been able to cash in on this assistance but as early as this year the Government is testing an on-line food program and Amazon is at the top of the list of those participating.

So how do you reach this important group? Well it depends.  As mentioned earlier, many of the members this group are Millennials but 66% are not.  Your media plan needs to reflect this with a combination of both digital and traditional media.  For example, the media influence for grocery shows that print is still the #1 media influence for all groups, digital comes in at #2.  Be sure you look at how the different groups within the Have Not segment use media to create an effective combination of media to be effective.
The significant size of the Have Not consumer group deserves your attention. Be sure to follow these steps to successfully connect.  First identify your Have Not consumers and understand what motivates them.  Next engage them with the right mix of media to effectively reach them on their path to purchase and finally when messaging be sure to deliver the “Lowest Price”. Embracing this consumer segment and treating them with well earned respect, will differentiate your brand and grow your business.

Contributed by Thérėse Mulvey, CEO of PREformance Marketing.

Thérėse is an accomplished executive with more than two decades of success driving profit, growth and market expansion through the strategic optimization of marketing analytics, research and business development. Ms. Mulvey is an innovative retail industry professional, with rare expertise in analyzing and translating consumer behavior into strategic marketing and advertising plans that build traffic and sales. Connect with Thérėse on: LinkedIn and Twitter, or PREformance Marketing: Facebook, and LinkedIn.


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