Warc Blog

Brands fail low-income shoppers

26 March 2014
KISSIMMEE, FL: Brands in the consumer packaged goods (CPG) industry are typically failing to innovate for low-income shoppers in America, a leading executive has argued.

Jocelyn Wong, chief marketing officer of Family Dollar – a discount retailer with more than 8,000 stores in 46 states – suggested many manufacturers were currently neglecting a huge swathe of the population.

"Most of the time, CPGs don't innovative for this customer. They innovate for mass; they tweak up for club; they tweak down for dollar."

Wong was speaking at the IRI Summit 2014, an event organised by research group IRI. (For more, including details of Family Dollar's formula to calculate value, read Warc's exclusive report: Family Dollar solves the value equation.)

She added that an estimated 47m people in America live below the poverty line, while the median level of household income remains well below the peak recorded in 1999.

Family Dollar's core customer is the female head of household, in her mid-40s and making less than $40,000 a year. As such, it is an expert in understanding what products meet the needs of this demographic.

"We know what things our customers are looking for, and it's so important that we get that product assortment and that mix right," said Wong.

"We are in the midst right now of expanding our food assortment pretty significantly with the brands and the type of items that she actually wants, that she loves, and that she expects from us."

As part of this process, the company worked closely with Procter & Gamble, the FMCG giant, as it created a new laundry detergent for this group, in the form of Tide Simply Clean & Fresh.

This offering mixes the "dependable" performance that low-income consumers rely upon with a more affordable price tag than is often the case in this category.

Family Dollar has also grasped the innovation imperative by allying with PayNearMe, a service allowing shoppers to pay utility bills in its stores with cash, rather than relying on credit cards or cheques.

"This helps provide her that convenience and that stress-free experience that she is looking for," said Wong.

Data sourced from Warc

 
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