Segmenting Shoppers Through ‘Natural’ Selection
Consumers are increasingly embracing natural and organic products, and often they are as concerned about what's not in the products they buy -- especially food -- as much as what is. To that end, Information Resources, Inc. (IRI) and SPINS have joined forces to create SPINS NaturaLink, a new segmentation of the total U.S. population that focuses on how shoppers think about, purchase and use natural/organic/eco-friendly products.
In 2012, U.S. natural/organic retail sales grew 13.5 percent, reaching a whopping $81.3 billion. But only 18 percent of shoppers account for nearly half of all natural/organic product sales. So how can trading partners attract the remaining 82 percent of consumers that are not yet "power shoppers" in this fast-growing sector?
In a nutshell, it's all about segmentation.
To wit: SPINS NaturaLink identifies seven distinct consumer segments based on lifestyle, organic/natural purchasing history, attitudes toward organic/natural products, the importance of physical and emotional category/product needs, and demographics.
“The segmentation offers an important set of insights for leveraging existing natural/organic buyers and attracting new shoppers to these products," notes Robert I. Tomei, president, IRI Consumer and Shopper Marketing.
Two shopper segments in particular -- “True Believers” and “Enlightened Environmentalists” -- offer outsized opportunities for manufacturers and retailers; each group represents 9 percent of the U.S. population, but together account for 46 percent of all natural/organic product sales.
True Believers – This segment's nomenclature is self-explanatory. True Believers are passionate about staying fit and healthy and are focused on trying new things, serving as strong role models for their children, and are strong believers in the benefits of natural/organic products. True Believers post a median income of $65,000, have an average age of 40, attended college and in some cases, embarked on post-graduate studies.
Enlightened Environmentalists – Also self-explantory, this shopper set is passionate about the environment and making good choices to support it. Enlightened Environmentalists are making a real effort to make healthier choices and will go out of their way to shop at stores that carry natural/organic products; they're older than True Believers, averaging 63 years old, attended graduate school and have a median income of $57,000.
“These two groups are ‘power shoppers’ when it comes to natural/organic products,” affirms Tony Olson, CEO, SPINS. “Manufacturers and retailers have a significant opportunity to better understand and tap into their needs, wants and motivations, not only to drive sales volume but also to continue to deliver the innovative products that shape our industry.”
At the same time, cautions Olson, it's important to motivate shoppers in other segments, "to expand their knowledge of natural/organic products to stimulate buying behavior and ensure long-term growth.”
Read on for a brief description of the following five segments, which comprise the remaining 54 percent of sales:
Strapped Seekers – This group likes to try new things and live a healthy lifestyle, but knows they should make healthier choices than they do. With a median income of $45,000 and median age of 45, these shoppers represent all levels of education.
Healthy Realists – Being healthy and fit and making exercise a priority is important to these shoppers. They are often the first among their friends to try something new, but can have difficulty deciding whether to buy healthy or traditional products. Their average age is 39; they have attended college and earn a median income of $65,000.
Indifferent Traditionalists – Leading a simple life with few passions, they may try healthy products but do not consider themselves on the leading edge of change. With a median income of $46,000 that skews under $25,000, these shoppers are aged 65 on average and have a high school education.
Struggling Switchers – These shoppers are focused on staying within their budgets, have suffered during the last recession, but know they should be eating healthier and getting more exercise. With a median income of $56,000, they are aged 39 on average and attended all levels of school.
Resistant Non-believers – With very little desire to explore other options for things to buy, Resistant Non-believers stay loyal to the products they know. They have completed high school; have an average age of 52 and a median income of $48,000.
IRI and SPINS completed the SPINS NaturaLink segmentation in October 2013; survey respondents were polled primarily from IRI’s National Consumer Panel, which represents the total U.S. population (and not just consumers already using natural/organic products). The partners teamed up for a recent webinar on the same subject, the archive of which can be accessed online.