10 STRATEGIC TARGETS of the Access Panel to identify and understand your key customers and prospects.
In a VUCA world, Back to basics: YOUR consumers!
Understanding who your consumers are is all the more important as we live in a changing world with a succession of crises. Adapting and innovating have become more than ever imperatives to survive and prosper in the short, medium and long term!
To analyze consumer behavior, the Access Panel Echangeur team highlighted 10 strategic targets, based on its statistical analysis models. Every 2 years, 14,000 individuals representing those aged 18 and over are interviewed in Belgium, Spain, France and Portugal on a hundred questions to understand their lifestyle, how they consume and spend, why, how much, and with which brands.
Immerse yourself in the lives of these 10 strategic targets in 2022, in what characterizes and differentiates them. Each target corresponds to different ways of consuming and expectations.
10 strategic targets that track the changing consumer lifecycle
The 10 strategic targets broadly reflect the evolution of the household life cycle, in terms of age, household composition and budgetary comfort.
To put it simply, we distinguish:
- The youngest: Carefree Young Adults, young adults who, for the majority of them, still live with their parents as well as Evolving Couples, who are childless couples, in the middle of building their home
- 3 types of families with children under 15 according to their budget ease: Hard-Pressed, Tactician and Wealthy Families.
- Working Singles: single or divorced without children, mostly active.
- 2 groups of fifty-year-olds according to their financial wealth: Modest and Golden-Middle-Aged, and who have, for some of them, still teenagers or young adults (from 15 to 21 years old) in their household.
- And finally, 2 groups of seniors who are distinguished by their family structure: still in a couple for Retired Couples or living alone for Lonely Seniors
Important to keep in mind: Given the aging of European populations, the 2 Seniors targets, aged over 60, represent a significant weight (nearly 30%). It can therefore be useful for some brands not to hide them from their marketing strategies. On the contrary, if young people and families account for less than half of the population, most consumption dynamics obviously focus on these targets.
WHAT BUDGET FLEXIBILITY DO STRATEGIC TARGETS HAVE TO DEAL WITH TO FIGHT AGAINST THE INFLATIONARY CRISIS?
It has not escaped your notice that we are currently going through an inflationary crisis. For the first time in Europe, inflation is reaching double-digit rates. In September 2022, consumer prices in the euro area rose by 10% year-on-year according to figures published by Eurostat. One thing is certain: in each country, the impact of price increases will vary according to the financial comfort of households.
The targets who feel most comfortable with their incomes, and who are therefore best equipped to deal with rising inflation, are unsurprisingly the targets with the highest incomes: Golden Middle-Aged, Wealthy Families and Retired couples.They will continue to consume, finding cheaper alternatives if necessary (for example by buying private label products or frequenting more low-cost brands). They will also be able to draw on their savings or postpone certain structuring projects to maintain a certain standard of living.
On the contrary, the most fragile targets are those with low incomes, already very constrained on their budget. They will bear the brunt of the crisis, and will have to reduce their consumption to a minimum. Because these households are clearly already under pressure with little budget flexibility: their savings capacity is low, and they will inevitably have to make trade-offs in their consumption, which can go so far as to stop certain purchases deemed non-essential. Already in survival, with consumption going to the essentials, Hard Pressed Families will undoubtedly be among the most weakened by the inflationary crisis. The Modest Middle-Aged are also likely to suffer greatly from the crisis, as are the Working Singles and Lonely Seniors, having to bear, alone, a weight of constrained loads becoming difficult to assume.
In this inflationary context, how to regain purchasing power? One of the avenues is to turn to the second-hand or refurbished market, or rental rather than buying.
CIRCULAR ECONOMY TO REGAIN PURCHASING POWER?
The second-hand market is primarily aimed at families. In particular, Hard-Pressed Families are already making massive use of it. With the inflationary crisis, these most constrained families should further intensify their second-hand practices, both as buyers and as sellers. On the other hand, we might think that this practice is reserved for the most fragile.But this is not the case. The purchase / sale of second-hand or refurbished is even more widely practiced by Wealthy Families. In fact, these families resort to second-hand for reasons that are not necessarily budgetary. They have indeed become aware of the need to consume less and/or better, to consume differently, more ethically.
Beyond the budgetary and ethical aspect, this practice of buying / selling second-hand is in fact a strong generational marker. Older people use it less than families. The same is true if we focus on rental intentions rather than buying a car. Overall, families and the youngest are the targets who are the most receptive to the functional economy, far ahead of the oldest, including Retired Couples and Lonely Seniors.
So, why such a drop in the consumption habits of Seniors? Several reasons: on one hand, they are still massively attached to possession, but one the other one, they have entered into a “reasoned” consumption, that is to say that they have fewer opportunities to consume, their homes naturally experiencing fewer moments of life.
AND IN THE CURRENT CONTEXT, WHAT ABOUT IMPACTFUL EQUIPMENT AND/OR RENOVATION PROJECTS?
Let’s start with home equipment projects, whether it’s the purchase of a car, furniture, appliances, high-tech products, etc. Families and Young Couples targets were most likely to plan to buy this type of property in the next 2 years. The inflationary context will necessarily have an impact on the projects of the most constrained, Hard-Pressed Families in the lead. Intensifying the use of low-cost or second-hand, including for these types of goods, will probably not be sufficient for these types of goods.
Nevertheless, consumer credit is obviously a good way to finance your projects. Families like the Evolving Couples, in the middle of building their home, do not hesitate to use it. Note that Wealthy Families are no exception: they consider credit as a service at their disposal to carry out their multiple projects.
Another practice particularly widespread among Evolving couples and families is the use of payment facilities, whether split payment or “Buy Now Pay Later”, widely promoted in recent months following the rise of players such as Klarna, Alma or Floa Bank. Beyond the simple buzz, this use, already well established, responds to a need for flexibility to manage its budget. Again, contrary to popular belief, these services are not reserved for the most constrained, the Wealthy Families, proving to be the biggest users. In the coming months, it can be assumed that these payment facilities will provide the most vulnerable, such as the Hard-Pressed Families, with solutions to cope with increased budgetary pressures.
Among the impactful projects, let us now mention housing renovation projects, whether it is bathroom or kitchen renovation, energy saving work, housing expansion or outdoor development. Will the good momentum initiated during Covid be maintained in the current context?
But first, which targets are considering this work? It is of course primarily the owners of housing who will consider renovation work. Thus, the fifties, the Tactitian and Wealthy Families, the Retired couples are the most entrepreneurial.
The type of work will depend on the target and its budget flexibility. Thus, the Golden Middle-Aged, the wealthiest, will for example embark on both the renovation of their kitchen / bathroom and energy saving work, motivated by a logic of transmission. Wealthy Families will focus on energy transition work. On the contrary, owners of less expensive homes, such as Modest middle-aged or Tactican Families, will instead focus on modernizing their kitchen or bathroom. In view of these targets for renovation work, we can reasonably expect that this sector dynamic should be partly maintained, even if some projects may not be carried out as initially envisaged, given the rise in raw material prices. It should be added that public aid schemes such as “MaPrimeRénov” are fundamental in encouraging the most modest to take the plunge into energy renovation.
Beyond the financial leeway and the current context, how much time can we dedicate to consume/undertake?
It is obviously the working people who are most constrained by time, with families particularly occupied by their work, transport and household tasks. The quinquas are also not left out. On the contrary, Seniors (Retired or Lonely) have more free time, and these are typically the ones we will find in the associative world, with a view to socialization and sharing with others. In order to deal with this time constraint, consumers will often turn to digital technologies, particularly remote purchasing.
Since 2020, household consumption has been largely digitalized, a move accelerated by the Covid crisis and its successive lockdowns. Today, the most digitalized targets (those who regularly buy on the Internet) are of course the Carefrees Young Adults (our Digital Natives), as well as the most time-constrained targets such as families, Evolving Couples and Golden Middle-aged (except for Modest middle-aged).
Among the least digitalized targets, we note that digitalization is still underway, boosted by the covid crisis.
Let’s continue on the theme of digitalization with the activities performed on smartphones and/or tablets. Currently, more than 80% of Europeans surveyed have a smartphone or tablet (even the oldest ones are equipped with one). But what do we do with it? In the last 2 years, we have experienced an explosion of smartphone/ tablet uses, with great disparities depending on the country. The most active targets on these uses will logically be the most digitalized. For example, Internet purchases on smartphones in Spain are often carried out by families, while in Belgium, many Wealthy and Tactitian families already use their smartphones to pay in stores. In Portugal, the QR-code scan to find out about a product is the most used by Golden middle-aged. And in France, buyers on social networks are mostly young people and families.
Purchases on social networks are beginning to grow in all countries: more than 10% of smartphone holders have already bought on social networks in the last 12 months. Brands can no longer afford to communicate on these networks, especially since almost everyone uses them. Even the seniors started. If the most widespread social network today is Facebook, this is no longer the case with the younger ones, Instagram has already dethroned Facebook, and Snapchat, Tiktok and Twitch are making strong progress.
Digital uses have therefore developed, but what about the role of the store tomorrow? A long-standing trend, accentuated by multiple crises, the majority of physical stores are experiencing a decline in their attendance. But they still have a role to play.
Research Online Purchase Offline (ROPO), in other words, searching for information on the Internet before buying in-store, is still more common than the reverse practice, Showrooming. But attachment to the store differs from one target to another; some have much more mixed uses between the Internet and the store. In concrete terms, Seniors, Working singles and Golden Middle-aged show a strong attachment to the store. On the other side, the youngest and the Wealthy and Tactician Families, always looking for time savings and convinience, are juggling more with these practices. This omnichannel requires stores to continue their transformation.
The customer journey continues to evolve and delivery remains a key moment. Usage in the food sector (home delivery, Drive) and non-food via the Click & Collect, are increasing, accelerated by the Covid crisis and its successive lockdowns. Of course, we will find here again logic of practicality and time saving. The Wealthy Families have, for example, adopted all these practices while the Tactician are mainly concerned with food delivery. The younger ones opt for Click & Collect. It should be added that seniors are naturally less inclined to use this type of service, favouring proximity and social ties.
To conclude, the challenge now is to identify which of these 10 targets make up the clientele of your brand and brand and which ones do you want to address? Once asked, the whole question is how you can work them…
The rest, soon, with the presentation of our 7 consumption engines.