Targeting vital in UK

12 January 2012

LONDON: Brand owners in the UK may benefit from placing greater emphasis on the top 20% of consumers in their category, analysis by Bain & Company has argued.

The consultancy assessed the habits of 6,000 adults in the UK, and found the 20% of shoppers spending the most across a range of sectors in the consumer goods industry delivered an average of 60% of sales.

Considering all the featured categories, this 20% of buyers are six times more valuable than the other 80% of customers, and carry 12 times the normal net worth in areas like jewellery.

Even in segments where the influence of this group is relatively modest, it must not be underestimated, the report suggested. This is the case for clothing, where the top 20% of consumers yield 47% of sales.

"The brands we see winning are those that have a good range of products and give consumers a clear functional or emotional reason to trade up," Tory Frame, head of consumer products at Bain & Company, told Marketing Week.

Elsewhere, the study suggested the most active shoppers within some sectors exhibit demonstrably different behaviours concerning the number of brands they pick between when making purchases.

As an example, the leading 20% of clothing consumers have a consideration set of 6.4 brands, falling to four brands for the remaining 80% of the target audience.

By contrast, the typical shopper picks from less than two brands when buying cars, tobacco and jewellery. This figure fell to just 1.9 for personal technology, at least partly due to Apple's dominance.

Frame said: "When we have looked at that category in the past we saw that there was nowhere near that same level of loyalty. We observe both an emotional attachment to Apple and also incredibly smart product development."

In sectors such as beer and chocolate, the number of brands shoppers could buy is much higher, and has in many cases increased, Bain & Company reported.

Further diversity is noticeable in terms of the amounts customers are willing to spend, as shown by the fact 95% of people who bought premium clothing also acquired cheaper lines.

This habit was observable for most cyclical purchases, although a majority of people who favoured high-end cider, tobacco and beer "never" selected mass-market alternatives.

Data sourced from Marketing Week; additional content by Warc staff