Trade Talk: It’s all about me

Segments, groups and niches. That’s what most marketing and advertising focuses on reaching. Well there’s a new target audience and it’s growing fast. It’s the group of one.

Data from a How America Shops study by New York research firm WSL Strategic Retail gives a look into the needs and wants of single-person households, a classification that encompasses 26 percent of the U.S. population and ranges from older consumers who may have lost a spouse due to death, divorce or separation to those under 30 who are choosing to marry later and later. “Certainly society is now creating an environment in which single people can thrive,” says Candace Corlett, a principal at WSL Strategic Retail. “There is also a culture of young people delaying adult responsibility, sometimes forever, and those who are just not signing on for the ‘couples’ way of life. So we have singles at both the young and the old ends of the spectrum.”

The study found 37 percent of the one-person households were in the 18-to-35 age range, 42 percent in the 36-to-54 range, and 21 percent were 55 and older.

While 59 percent of those in households of four or more people are optimistic about their financial future, only 31 percent of singles feel the same way. But compared to a similar study conducted in 2003, the number of respondents saying they had become more careful about their spending habits in 2004 declined by 15 percent, and the number that said they had postponed major purchases declined by 11 percent.

Likely to splurge

Though 70 percent of the single-person households have incomes of less than $50,000, they are free to spend that money on themselves and their pets. And spend they do. Compared to consumers from households of four or more people, they are more likely to splurge for a good cup of coffee (54 percent; 38 percent), specialty foods (59 percent; 46 percent), and pet products (52 percent; 23 percent). “Single people are more about self-indulgence. Whole Foods, for example, does a great job of catering to that, responding to an audience that is ‘all about me,’” Corlett says.

Single consumers are less interested in going out of their way to save a buck. While 38 percent of single respondents said they would “go a little further to shop at a store if I can save money,” 60 percent of those in households of four or more said they would do the same.

And they’re not always in a hurry to finish shopping: 41 percent of singles said they would go out of their way to seek one-stop shopping, compared to 58 percent of multiple-person households.

Sense of community

These consumers are less likely to shop in the larger stores such as mass merchandisers and warehouse clubs and also less likely to shop at dollar stores. Small, local stores seem to hold the most appeal.

Rather than seeking a bargain, some of these consumers may be looking for a sense of community, Corlett says. “When you don’t have a built-in family unit, you look to connect in the community and it is much easier to do that in the small local drug store or the small local book store. We are also seeing a return to smaller grocery environments.

Singles also exhibit a lot of brand loyalty, especially in household and personal care products, reporting lower levels of brand switching than respondents in households with four or more people. They are willing to pay a bit more for convenience but are often forced to weigh whether it’s worthwhile to pay more for products in single-serve packages or pay less for larger packages but end up throwing out a product that spoils.

“On the paper goods side, it’s pretty transparent: they want smaller sizes. But on the prepackaged foods side, you don’t always eat a whole can of soup or a whole loaf of bread or use a pound of sugar or a box of salt. There are a lot of opportunities for innovation on prepackaged foods,” Corlett says.

In a typical grocery store, the meat and produce departments pose no problem for the single consumer. Only need one steak or one potato? No problem. And makers of personal care products have caught on to the needs of these consumers and are offering smaller-sized shampoos and styling aids, for example. But it gets tough in the middle aisles, where the oversized packages of pasta, spices, condiments and dry goods lurk.

Marketers who want to reach these consumers shouldn’t do it by pointing out their single status, Corlett says. “The worst thing you can do is spotlight them as different. It’s like marketing to a special age group. You don’t talk to teens about acne or women over 50 about lined skin. Talk to them about benefits, such as the benefits of choice. Make both the large economy size and the smaller single-portion size innovative and affordable.”

Corlett says some product makers may find that the innovations they introduce for single consumers catch on with those living in larger households. “Focus on the features and benefits that are specifically attractive to households of one and then watch and see how many other households value the benefits. When marketers create and promote innovative features and benefits for a particular population segment, they often end up attracting a much broader audience. The features and benefits go beyond the target audience. For example, the big-button phone or the levers instead of doorknobs - which were designed for older consumers - are now a product of choice for many people.”

Make room

Big-box retail and grocery centers will no doubt continue getting bigger but the market may also have to make room for some smaller, cozier outlets. “We have a retail environment that has been very focused on families stocking up and it’s sort of the antithesis of what the single-person household needs. But they are certainly a driving force in the extraordinary growth of places like Whole Foods and smaller independent retailers and specialty stores,” Corlett says.

From the looks of things, the impact of single-person households is just beginning to be felt.