Breaking the myths on emerging consumers in retailing

Abstract

Purpose

The research objective was to understand what low‐income or emerging consumers living in the Latin American region understand as value when considering retail offerings.

Design/methodology/approach

The methodology employed for primary research was qualitative. Six of the major markets were selected: Argentina, Brazil, Chile, Colombia, Costa Rica and Mexico. Four focus groups were conducted in each country, resulting of a total of 208 participants. Target consumers were women from the emerging socio‐economic strata (SES). Secondly, this study relies upon a wide selection of secondary research and data sources: syndicated data sources such as A.C. Nielsen; local retail associations such as ABRAS in Brazil and ANTAD in Mexico; journal and popular press articles, SES profiles and previously published, relevant consumer studies.

Findings

Rather than emphasizing their limited income, emerging consumers as a group represent a sizable market for consumer products. But they should not be addressed as a single group: peculiarities among them underline the need for further segmentation, as in higher income segments. Their needs should be better defined as basic instead of just simple, and they do not just go for the lowest prices or second brands, as they have marked preferences that characterize them. This also reflects in their shopping habits, which partly explains the resilience of the traditional/small format retailers. The findings underline these segments' relevance for consumer products, their rational behaviour as they try to reconcile their preferences with their economic reality, and how this explains their distinct set of products and format requirements.

Practical implications

Marketers and retailers interested in catering to lower‐income segments will find clues to understanding the preferences, habits and needs of these segments that represent a significant portion of emerging markets.

Originality/value

Conclusions are presented here in the form of six common myths on emerging consumers that are contradicted by the findings. The relevance of this study comes not only from the significant size of this market but also from the possibility of marketers to emphasize the social contribution of business.

Citation

D'Andrea, G., Ring, L.J., Lopez Aleman, B. and Stengel, A. (2006), "Breaking the myths on emerging consumers in retailing", International Journal of Retail & Distribution Management, Vol. 34 No. 9, pp. 674-687. https://doi.org/10.1108/09590550610683193