In today’s business world, we’re seeing a major shift in market dynamics. The economy is splitting into two main groups – those who have more and those who have less. This change is affecting how companies operate and how consumers interact with brands.
This article looks at how this economic divide influences consumer behavior and how businesses can adjust their strategies to keep up.
According to OXFAM International’s Annual Inequality Report, since 2020, the five richest men in the world have doubled their wealth. Meanwhile, nearly five billion people around the globe have become poorer. This growing economic gap is creating more working poor and shrinking the middle class.
The Dawn of Economic Bifurcation
With every passing day, the chasm between “Haves Mores” and “Have Lesses” becomes more prominent. It’s a very global phenomenon, and as a result, it is playing out in many peculiar ways around the world.
At the same time, economic difficulties, such as global recessions, have made inequalities even more pronounced, leading economically burdened shoppers, or the “Have Lesses,” to seek local, budget-friendly alternatives. Prominent instances of this trend are the rising popularity of no-frills retail chains like Aldi and budget-squeezing practices like, say, buying dollar-store toiletries and cleaning supplies before you buy their more expensive cousins. Another emerging retail model that Harbaugh focuses on is the dollar store, where practically everything is $1.
The “Have Mores”
The favorable end of the current economic divide gives some consumers the ability to enjoy a sophisticated level of choice which, despite the pandemic, is reflected in their purchasing decisions across an expansive range of products and services. Our familiarity with the kinds of choices these folks are likely to make and the “signals of purchase” that restaurants and retailers who cater to this group utilize leads us to conclude that if they are choosing your product, you must be doing something right.
These consumers, essentially a segment of the population that we’ll call the “Have Mores,” are now influencing markets far beyond their seemingly small numbers and amounts that they’ve spent so far. They are also beginning to influence their would-be followers—people who would pace them if they could and now understand that if they could afford to, they would probably make the same kinds of purchasing decisions.
What Does it Take to Feel Rich in America
According to a Edelman Financial Engines report, 67% of Americans said they would need at least $1 million to feel rich, up from 57% a year earlier. Roughly 20% said it would take $5 million or more.
How Many People Fall into the “Have Lesses” Category?
A report, which is mostly representative of the U.S. population, from Freashlean has made it clear that a great amount of Americans (92.87%, to be exact) believe that the cost of groceries is far too high. What’s even more disturbing is that the number of Americans who hold this not-so-rosy opinion may be even greater: 50% to 66% not only think food prices are too high but also say they have been forced to respond to the nosebleed prices by purchasing lesser-quality ingredients.
Adapting GTM Strategies: Navigating Dynamic Market Realities
1. Offering a Variety of Products
To be attractive to both the “Have Mores” and “Have Lesses,” it is necessary to offer something to each group. It is important to offer products that those with money will think are worth the price because they are luxurious, cool, or trendy and that the budget-conscious will think are worth the price because they are attractive, high-quality, and dependable. However, when it comes to the product mix for these two types of stores, we also have to think about the types of things we want to stock and sell in order to capture the market share that we need in order to remain viable and competitive in the marketplace.
2. Digital Innovation and Accessibility
The digital revolution means more than just being online, and businesses have to get better at it. For a generation raised on the internet, you’d think we would all have a seamless experience of digitalness by now. Actually, no. Why? The current generation of businesses is grandly overlooking some transformational elements: personalized artificial intelligence; interactive online experiences; platforms that aren’t digital replicas but are instead authentically digital-first; and, optimally, a mobile e-commerce experience that’s readily accessible and simple to use. Consistency of innovation across these dimensions is how forward-thinking businesses aim to revolutionize digitalness and, by doing so, ARE revolutionizing it.
3. Tailored Direct Marketing
To know what the “Have Mores” and “Have Lesses” like, a complete approach is necessary. Businesses that want to hit on precisely what these folks favor have to figure out not only what drives them but also what makes them unique. Imagine you’re a casino resort owner and you’ve decided to do two segmented campaigns: one for the “Have Mores” and one for the “Have Lesses.” How would you go about figuring out what each group really wants? If you’re thinking “lifestyle differences” and are already pulling together “household income and spending behavior” and “values” to try to screen these groups, you’re on the right track.
4. Omnichannel Advertising
Advertising across all channels is a highly effective way to reach a wide range of customers with a consistent message. With omnichannel marketing, you can use every opportunity to show your audience what you’re all about. It’s an acknowledgment that today’s consumers interact with your brand across platforms and devices; they’re rarely using one or the other alone. Instead, they go back and forth between smartphones, tablets, desktops, smart TVs, and even (getting into the really futuristic stuff now) augmented reality and virtual reality headsets.
It is important for businesses to adopt an omnichannel digital advertising approach in order to reach consumers effectively on various online touchpoints. This means advertising on multiple platforms—be it social media, search engines, email, or any other viable, cost-effective medium—and doing so with a well-thought-out, integrated strategy that ensures brand visibility, engagement, and recognition. Figuratively speaking, it ensures that your brand message is not an island, but a reef that encloses a lagoon and provides a unified, immersive visual, and aural consumer experience that is strong enough to push the consumer toward conversion while still keeping them inside the experience.
The Bottom Line
The change in market polarity, which is driven by the divide in economic prosperity, has produced affluent “Have Mores” and cost-conscious “Have Lesses” as its primary personas. This significant societal shift doesn’t just influence the way businesses operate but substantially impacts the ways consumers interact with brands. As we have previously discussed here, the divide in consumer behavior along this economic axis is pretty stark and doesn’t bode well for those “Have Lesses” or businesses that sell to them.
Businesses must be agile. They must personally understand the nuanced preferences of each cohort. This requires marketing that is not only traditional but extremely personalized, all the way down to an individual’s chosen routes to purchase. Strategic diversification of product offerings is necessary to cater to both ends of the economic spectrum. Not all customers will respond to what is effectively a two-class system, but by any definition, that’s what we have in America. Indeed, businesses might find it an exercise in confusion. On the other hand, perhaps they should look at it as an opportunity to have even more conversations with an even more diverse customer base across a larger number of touchpoints—thanks in no small part to the Internet.
Are you still fragmenting your omnichannel planning and buying across multiple groups? How much efficiency could you gain if you unified your approach? Download our Omnichannel Advertising eBook, where every chapter unveils strategies that will elevate your brand and your 2024 marketing plan. The key to success lies in your hands – read the complete eBook now and chart your course toward marketing success in 2024!
About the author:
Adam Woods is the Chief Executive Officer (CEO) and held two other roles at Choozle — Chief Client Officer and Chief Technology Officer. Throughout his tenure at Choozle, he has been improving the way that advertisers buy media through the Choozle platform. He has led initiatives to ensure that Choozle leads the space in terms of being a consultative partner that helps ensure the effective deployment of media through a combination of omni-channel planning, targeting best practices, upfront goal setting, and effective measurement.
