Who Are Your Buyers?

Everyone is doing it. … Everybody is buying store brands, that is.

Store brands are universal across the United States, with 100 percent household penetration. There are, however, store brand purchase differences across demographic groups — and as a retailer, it's important for you to know who is buying store brands only occasionally, and who is buying store brands nearly every time they enter your store.

Nielsen's analysis shows that super-heavy buyers* make up 22 percent of U.S. households and rang up nearly half (48 percent) of store brand unit sales in 2009. This group also accounted for 34 percent of total purchases across the store. To put the super-heavy store buyers' clout into perspective, their all-category buying rate is three times that of the super-low store brand buying consumer segment, and they deliver twice as many buying occasions as super-low store brand buyers.

In short, you want these super-heavy buyers in your store. They're big into store brands; they shop frequently; and they spend big across the store. While some might think that the heaviest store brand buyers are interested only in a good deal, this analysis suggests real benefits to retailers deploying balance in their branded-versus-store-brand assortment and merchandising support.

So who are your super-heavy store brand buyers? Nielsen's research shows that heavy store brand users tend to fall in the middle income range, with annual household earnings of $30,000 to $70,000. That said, the demographic segment that experienced the fastest growth of store brand unit sales consists of affluent households with incomes of $100,000 or more.

Heavy store brand buyers tend to be families with kids. It makes sense that bigger households — with more mouths to feed and legs and arms to clean — would include store brands as part of a savings-based shopping strategy.

But store brands also have a loyal following among two-person households looking for value. Younger (age 54 and under) female heads of households, too, now have a propensity to shop store brands. Heavy store brand buyers also tend to be white versus ethnic households. The lightest store brand shoppers, meanwhile, are men over the age of 65.

Keep in mind, though, that future demographic trends — older, more ethnic households — are more favorable to branded items. Younger households with children account for a shrinking percentage of the population, and that percentage will continue to shrink until 2040.

In terms of ethnic households, Hispanics account for about 34 percent of the U.S. population growth today. In 2015, Hispanics will account for 41 percent of the incremental population in the United States. Even acculturated Hispanics are more brand-loyal, allocating 11 percent of their purchases to store brands, far below the average of 21 percent.

Measuring what consumers buy, we also find that heavier store brand buyers are more apt to purchase value and mid-tier store brand offerings. Lighter buyers purchase a relatively greater share of premium-tier store brands on an all-outlet basis; this behavior is most pronounced in the warehouse/club channel.

What does this mean? As a retailer, you not only should pay attention to the younger, larger, white middle-income households (perhaps by providing these heavy buyers with special continuity-based promotions to reward their total store buying), but also need to court seniors and ethnic households and convince these growing population segments to purchase your brands. And higher-margin, premium-tier store brands could be your ticket to attracting them.

Straight Talk delivers monthly store brand insights from The Nielsen Co., New York. Todd Hale is Nielsen's senior vice president, consumer & shopper insights.

"We define super-heavy store brand buyers as those consumers who purchase 437 or more store brand units on an annual basis, and heavy buyers as those who purchase 284-436 store brand units annually. Super-low buyers are those who purchase up to 108 store brand units annually.

Store Brand Buyer Profile

• Middle-income families (between $30,000 and $70,000 annual income)
• Reside in plain rural living and comfortable country areas
• Larger households with three-plus members
• Younger female head of household
• Fastest-growing segment among the heaviest store brand buyers consists of households making $100,000-plus