WARC, 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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