Getting to Know Cash-Strapped CPG Shoppers: It’s More Than Income

By Todd McClimans, Media Center of Excellence, IRI


As the economic hit triggered by coronavirus continues to impact almost every part of our lives, CPG manufacturers have had to deal with several challenges over the past seven months. Out-of-stocks, less shelf space at some retailers and continually changing shopper behavior have kept the industry on its toes. While they manage these supply chain, assortment and shopper challenges, CPGs also need to be able to more effectively target and reach their higher-value consumers to avoid wasting valuable media dollars.

Whether brands are working on how to get back on track with their core product offerings or adapting their messaging and strategies to consumers whose financial situations may have been negatively impacted this year, it’s important for companies to be able to retain the new buyers who started purchasing their brands during the pandemic, and regain buyers who may have switched to other brands due to lack of product availability or pricing, while also continuing to retain their loyal customers. With the right data sources, companies can more easily activate against all the changes in consumer behavior in as close to real time as possible.

Having access to a broad base of detailed audience segments helps support more seamless planning, as well as targeting and activating the right customers. Household income is one important data point that is often used for audience targeting.  

With unemployment hovering around 8% in the U.S. (4.4 percentage points higher than pre-COVID-19), SNAP and WIC benefits having risen significantly this year, and one in four Americans considered “food insecure,” there are more households now that are “cash-strapped,” which is similar to what we have seen in past recessions.

However, one of the big missteps that data providers often make is that they define cash-strapped households based solely on their incomes. This measure can be appropriate in a more stable economy, but it is not revisited frequently enough to be the only measure when conditions are unstable, as they are currently.

IRI partnered with AnalyticsIQ to take a more holistic view of cash-strapped consumers, going beyond income. Our definition also considers measures of relative wealth and financial commitment, such as lower credit score, high monthly debt, compared to income, and $0 investible assets, to provide a more comprehensive view of a household’s financial situation.

In addition to including low income households (<$40K annually) in the cash-strapped category, IRI and AnalyticsIQ scored the total U.S. against a range of financial indicators and incorporated the bottom scoring 20% of employed/unemployed households and bottom 40% of retired households.

The result is a large and representative group of households who have limited discretionary income. This is an ideal layer to use when using purchase-based audience solutions, as this cash-strapped audience layer helps advertisers and their agencies create better messaging to actual buyers of a product around quality and value at an affordable price.  

IRI has also classified all verified frequent shopper program households into clusters, based on how they shop the store, including frequency, spend and engagement with coupons/promotions. Using price-sensitive audiences allows marketers to target subsets of brand, category, etc., buyers that are likely to respond to brand/quality or value-/coupon-focused messaging.

As economic recovery continues to feel like a hole hard to climb from, we anticipate an uptick in purchase of private label brands, which is in line with what we’ve seen in prior recessionary periods, such as 2008-2009. In order to target these private label shoppers, IRI has created approximately 200 audiences across a range of categories (e.g., private label vitamins, private label soap, etc.). To be in a private label audience, a household must have purchased a private label or store brand item within the past 52 weeks.

Advertisers can activate audiences that exhibit recessionary spending behaviors across the entire advertising ecosystem to reach households more likely to purchase CPG products online. These value-seeking audiences can be distributed to media platforms to identify and activate the publishers, platforms, networks, dayparts, etc., where shoppers most often engage with media. Marketers can activate IRI Audiences against all addressable, direct-to-consumer touch points, including online, social, mobile, email, direct mail and TV. 

As you are looking to better target and reach the right customers during this economically challenging time, especially households whose incomes don’t tell the full story, there are options.




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