The Affluent Like Club Stores, Alternative Formats: Nielsen Study
SCHAUMBURG, Ill. -- Affluent consumers can afford to be more selective about shopping, but their habits reveal that the lure of a good deal can consistently influence their selectivity can still some interesting patterns, according to a study just released by the Nielsen Company here.
The study reveals that households with $100,000-plus annual incomes patronize club stores like Costco and Sam's Club and upscale mass merchandisers like Target in search of a deal. They also gravitate toward national and higher-end grocery chains that meet their needs for fresh produce, meat, poultry, and seafood, along with a great deli section and alcoholic beverage aisle, the research revealed.
"Affluent shopper DNA is all about product quality and variety, with value as an added bonus," said Todd Hale, s.v.p., Consumer & Shopper Insights for Nielsen Homescan & Spectra, an operating unit of The Nielsen Co. [Progressive Grocer is also owned by The Nielsen Co.]
"Strong fresh food sections act like a magnet for affluent shoppers who make 56 percent more trips to purchase fresh produce, but the quality and selection have got to be there," Hale said.
Nielsen analysts found the profile of the typical affluent household trends toward a larger white family residing in one of 17 major Nielsen markets, with a household head working in a white collar job, and where the female head of household is between the ages of 35 and 54. The household income is in excess of $100,000 per year.
According to U.S. Census estimates, affluent families now comprise 17 percent of all U.S. households, and are projected to account for 22 percent of households by 2010.
While the affluent shop all the mainstream retail channels, they are more than twice as likely to patronize a warehouse club store, and nine percent more likely to frequent a mass merchandiser when compared with households who earn $20,000 or less, according to the research.
Conversely, lower income households (those earning less than $20,000 per year) are 74 percent more likely to shop at dollar stores, 42 percent more likely to patronize a convenience/gas store, and 21 percent more likely to frequent a supercenter.
Hale noted that there were "no surprises about format preferences, which almost perfectly reflect retailer merchandising and targeting strategies."
Favorite store banners among the affluent include national grocery chains such as Kroger and Safeway, mass merchandisers like Target and Wal-Mart, and niche formats like Whole Foods. Less-affluent consumers prefer retailers such as Save-A-Lot, Aldi, and Kmart.
Alternative retail channels enjoy marked popularity among affluent shoppers in search of a knowledgeable sales staff, wide product selection, and competitive prices.
According to Hale, the research pointed to promotion strategies for some grocers that amount to "if you can't beat them, join them" in approach.
"Grocers interested in retaining their affluent customer base have added a somewhat counterintuitive strategy to their promotion portfolio," Hale explained. "These innovative grocers now sell gift cards or participate in joint promotions with alternative channels in an attempt to direct shoppers to competitors with the least amount of assortment overlap."
Wealthy shoppers have more to spend, and willingly do so. The typical affluent warehouse club shopper spends $111 per trip, $46 more than a lower income household. The same high-spending trends holds for other formats as well: The affluent family register ring on a typical grocery trip is $47, on a mass merchandiser trip it's $56, and in both cases, represents $18 more per trip than a low income household.
The big basket size associated with warehouse club stores can be attributed to a number of factors, according to Nielsen: large size club packs, higher-end merchandise assortment, as well as an aggressive promotional playbook that includes in-store flyers, magazines, e-mail, live demonstrations, and food/beverage sampling stations.
The study reveals that households with $100,000-plus annual incomes patronize club stores like Costco and Sam's Club and upscale mass merchandisers like Target in search of a deal. They also gravitate toward national and higher-end grocery chains that meet their needs for fresh produce, meat, poultry, and seafood, along with a great deli section and alcoholic beverage aisle, the research revealed.
"Affluent shopper DNA is all about product quality and variety, with value as an added bonus," said Todd Hale, s.v.p., Consumer & Shopper Insights for Nielsen Homescan & Spectra, an operating unit of The Nielsen Co. [Progressive Grocer is also owned by The Nielsen Co.]
"Strong fresh food sections act like a magnet for affluent shoppers who make 56 percent more trips to purchase fresh produce, but the quality and selection have got to be there," Hale said.
Nielsen analysts found the profile of the typical affluent household trends toward a larger white family residing in one of 17 major Nielsen markets, with a household head working in a white collar job, and where the female head of household is between the ages of 35 and 54. The household income is in excess of $100,000 per year.
According to U.S. Census estimates, affluent families now comprise 17 percent of all U.S. households, and are projected to account for 22 percent of households by 2010.
While the affluent shop all the mainstream retail channels, they are more than twice as likely to patronize a warehouse club store, and nine percent more likely to frequent a mass merchandiser when compared with households who earn $20,000 or less, according to the research.
Conversely, lower income households (those earning less than $20,000 per year) are 74 percent more likely to shop at dollar stores, 42 percent more likely to patronize a convenience/gas store, and 21 percent more likely to frequent a supercenter.
Hale noted that there were "no surprises about format preferences, which almost perfectly reflect retailer merchandising and targeting strategies."
Favorite store banners among the affluent include national grocery chains such as Kroger and Safeway, mass merchandisers like Target and Wal-Mart, and niche formats like Whole Foods. Less-affluent consumers prefer retailers such as Save-A-Lot, Aldi, and Kmart.
Alternative retail channels enjoy marked popularity among affluent shoppers in search of a knowledgeable sales staff, wide product selection, and competitive prices.
According to Hale, the research pointed to promotion strategies for some grocers that amount to "if you can't beat them, join them" in approach.
"Grocers interested in retaining their affluent customer base have added a somewhat counterintuitive strategy to their promotion portfolio," Hale explained. "These innovative grocers now sell gift cards or participate in joint promotions with alternative channels in an attempt to direct shoppers to competitors with the least amount of assortment overlap."
Wealthy shoppers have more to spend, and willingly do so. The typical affluent warehouse club shopper spends $111 per trip, $46 more than a lower income household. The same high-spending trends holds for other formats as well: The affluent family register ring on a typical grocery trip is $47, on a mass merchandiser trip it's $56, and in both cases, represents $18 more per trip than a low income household.
The big basket size associated with warehouse club stores can be attributed to a number of factors, according to Nielsen: large size club packs, higher-end merchandise assortment, as well as an aggressive promotional playbook that includes in-store flyers, magazines, e-mail, live demonstrations, and food/beverage sampling stations.