MAY 2024
We must look beyond income lines for a more inclusive approach to value.
Over the past two years, rising costs have significantly strained many households. These escalating expenses, driven by broader macroeconomic factors, gravely impact households with lower incomes. However, focusing a strategy strictly on low-income consumers could lead to an oversight of other struggling households. As we endeavor to delight all consumers, it's crucial to understand that solely considering income may only capture a portion of the affordability narrative.
To address affordability issues, we require a more inclusive strategic approach. Why is this broader perspective crucial? Insights show lower-income households are comprised of single-income houses, predominantly retirees and individuals from Gen Z. By focusing strictly on income, we could overlook struggling families and couples with similar challenges, creating an incomplete picture of the issue.
Revisiting the household categorization and including a variety of income levels relative to the number of individuals allows us to account for the more considerable expenses associated with larger households. Our revised approach has already revealed crucial insights. For instance, food and beverage sales have experienced a decline not only in low-income households but also struggling families, struggling couples, and middle-income couples. These are households that our former perspective might have overlooked.
These overlooked households may be earning a comfortable income on paper, but the realities of supporting multiple persons—each with their unique needs and expenses—can result in a financial squeeze that mirrors low-income households.
Moreover, the decline in food and beverage sales amongst middle-income couples suggests that households in income brackets previously considered safe are also feeling the pinch. These findings underpin the fact that affordability challenges are widespread and helps us frame inclusive, more effective strategies to address the issue.
The redefined household groups help us as marketers to identify these households and design products and programs tailor-made to meet their needs effectively and efficiently. Armed with this broader view, we can build marketing strategies that target these groups better, ensuring that we offer the products they desire when and where they need them.
This way, our strategies not only address affordability but accessibility as well, providing a comprehensive approach to meet the needs of every household. As we move forward, our commitment must be to continue broadening our perspective and refining our understanding of the impact on all. Only through an inclusive approach can we ensure that no struggling household is left behind, and all consumers remain within reach of products and services that meet their needs and refresh their lives. ■
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