The power of one

U.S. households today don’t much resemble those of the 1940s through the 1960s. And, thankfully, neither do store brands.

Today, 27 percent of U.S. households are single-member households, translating to more than 33 million households, according to the U.S. Census Bureau. Census data also illustrate the modern era with almost four times more one-person households in 2010 compared to 1940.

Today’s largest pool of single-member households stands to be well-served by progressive store brands. The group already spends more than $13 billion annually on these brands. And the segment’s behaviors and population growth present a great opportunity to savvy retailers.

Store brands are in nearly every household today, as consumers across demographics have illustrated their understanding of their value and quality. Across food, beverage and non-food brands, single-member households provide retailers with numerous occasions to meet the evolving needs of the two primary groups within this market demographic: older consumers and millennials. Both groups have indicated some level of commitment to and understanding of store brands, certainly during the recession and now throughout the recovery and into the future.

Retailers armed with an understanding of single-member households are poised to gain a valuable market segment, some members of which still have a lifetime to commit to retailers’ brands.

How they feel

Most single-member households are getting by — but not easily, according to insights and data gathered from a recent MarketPulse survey from Information Resources Inc. (IRI), Chicago. Nearly one in five singles is having difficulty affording needed groceries. Singles also indicate that they are apprehensive about the future of their financial security.

As a result, these folks are making cutbacks and thoughtful choices regarding how and where they spend their money. Cutbacks are not quite as prevalent in single-member households as they are in multi-person households, but they still are widespread. Despite a somewhat recovered economy and cautious optimism, 38 percent of single-member households (compared to 45 percent of multi-member households) made numerous cutbacks during the past six months in an effort to make ends meet.

When evaluating the financial outlook for the coming year, single-member households reveal concern again, as 53 percent say they expect their financial picture to remain unchanged, and 27 percent expect it to deteriorate.

For single-member households, two potential forces are heavily influencing attitudes — and to some extent, they are polar opposites. For one, singles have only themselves to rely on, without the safety net many multi-member, dual-income households have. This reality would make most singles inherently cautious in their spending.

However, singles also have the liberty of supporting only one person, which influences decisions on how they treat themselves and use their products. For example, larger households indicate a higher likelihood to change how they consume personal care, beauty and cleaning products, hoping to make them last longer. Having more needs and more mouths to feed means multi-member families have to make money go further.

Lifestyle changes made by single-member households have certainly helped keep budgets in check, and although the percentage of those making thrifty choices is lower than that of multi-member households, these restrictive behaviors remain prevalent.

How they shop

Single-member households report making trade-offs and cutbacks in their lifestyle choices, and these actions have impacted in-store behavior. Although price is a major driver of purchase decisions, it’s expected that convenience also will have great value to singles, given that they’re typically cooking for one and often purchasing on-the-go and easy-to-prepare products. But with cautious financial choices to make, almost half of single-member households report that price has become more important than convenience.

Thirty-nine percent of single-member households report buying more private label, and a third say they are trying new brands priced lower than their regular brand. Of single-member households, 27 percent report using more coupons, so coupons remain an important money-saving tool.

Connecting with singles before they enter the store — or, even better, before they begin the shopping process — provides retailers with an opportunity to make an important connection. More than 80 percent of singles decide on most of the products they will purchase before entering the store, and 38 percent purchase only needed items rather than stocking up.

List-making habits also point to the importance of reaching singles early in the decision-making process. Although singles are less likely to make a list before entering the store (62 percent vs. 70 percent of larger households), they also are less likely to make additional purchases upon seeing deals and products in the store. Only 41 percent of singles (vs. 47 percent of multi-member households) make spontaneous additional purchases.

Despite this intimidating number, retailers must continue their marketing conversation throughout the purchase process, as 59 percent of singles might still make different or additional purchases as they walk the store aisles. They have proven to be a fairly rigid group, but not impossible to bend.

When it comes to list specificity, single- and multi-member households are similar in that they use circulars to make lists, use coupons and list specific brands to buy. However, slight differences in list specifics when it comes to categories and store brands underscore the importance of communicating with singles early and often. Forty-three percent of single-member households (vs. 39 percent of larger households) report detailing specific categories to buy when they are making their shopping list, and 10 percent of singles (vs. 7 percent of multi-member households) list specific private label items to buy.

How to win them over

With the millennial portion of the single-member household demographic highly likely to marry later in life, members of this segment continue to be a single-person household for much longer than they were in decades past. “Boomeranging” — the act of grown children moving back in with their parents — also has slowed. This means store brand marketers can look forward to serving a vibrant, educated group of single-household shoppers.

As for the older portion of the single-member household group, members might already have brand preferences in place, but they also have experienced the “coming of age” in store brands. And although they are considered older, members of this group — aging baby boomers, in particular — have shown a zest for life, living active lives with new experiences. And many base their purchase decisions on health and wellness — for both their bodies and their budgets.

Store brands are very much a part of the consideration set for single-member households, with a third reporting that they seek out store brands to save money. Retailers must consider the needs of this group, which differ from the needs of larger households. Small households often focus on frozen foods in individual portion sizes, and often they make very calculated and conscious smart splurges such as buying treats for at-home entertainment to save on going out or treating themselves to small indulgences to alleviate stress.

More than a quarter of them are going out with family and friends for entertainment less often, so they are potentially seeking foods and beverages that make entertaining at home easier and more enjoyable. And as store brands continue to press into premium and gourmet, opportunity abounds. Twenty-one percent of singles splurge on premium or gourmet items. Certainly, these items are an area of opportunity for retailers’ store brands.