In this evergreen post from Shane Heywood, he identifies the importance of recognizing the difference between the rich and poor.
Non-uniform: Consumer Choices and the BOP
Despite similar low levels of income, low-income households have different product preferences and different shopping styles. Do development practitioners need a reminder of this?
Different folks, different strokes
While working in Bangladesh, with BRAC, one of the world’s largest NGO, on a Microfinance initiative 7 years ago, I met 15 women. All were clients of BRAC’s Microfinance initiative, however each had different uses for their loans, different comfort levels of sharing these plans with their colleagues, and different ways of tracking their spend.
Travel to a different country – Ghana – in 2016, while working with a local business selling consumer products, a similar sentiment about variations in supposedly similar groups of consumers struck me. ‘Kwame,’ ‘Sarah’ and ‘Jack’ belonged to the same economic classes – yet they had very different preferences about where to shop, what to buy, and how to pay.
For me, my take away from these experiences is hardly the stuff revelations are made of: consumers –rich or poor – have different preferences and, as such, should be treated differently. Yet, it feels like effectively applying this principle might be a surprise to some in International Development.
A world of preferences and channels
First, even within one economic class, consumers have multiple product preferences.
In a presentation on approaches Social Enterprises use to sustainably serve low-income households, Erik Simanis, recalls the story of a low-cost eyewear producer that expanded their product range of glasses to (successfully!) adapt to different consumer preferences (largely driven by demographic traits) while maintaining prices.
Key points include:
- Demographic traits
- Strategy to address differences
- Economic classes
Read the full post, Non-uniform: Consumer Choices and the BOP, on ShaneHeywood.com.
Shane Heywood takes a look at how the Direct to Consumer business model could have meaningful implications for social enterprises.
My earliest shaving experience was around the age of 13. After 10 minutes, reeling from irritation everywhere, and minimal hair in the sink, I also felt slightly cheated by how much I had spent on the razor.
Apparently, that feeling has helped to lead to a $1 Bn USD deal.
Across some consumer-facing industries, from shaving cream to mattresses to prescription glasses, a direct to consumer – plus (DTC+) model is leaving an indelible imprint in the Consumer Goods industry, delighting consumers and disappointing long-standing players with equal effect.
The Dollar Shaving Club, which provides members with razors and other personal care products, is one of the more prominent firms showing the DTC model; however Casper and Eve mattresses are other examples, and Warby Parker, providing glasses.
Points covered in this article include:
- The Direct to Consumer (DTC) business model
- DTC and Social impact
Read the full article, Dollar Shaving Club and Social Enterprises: Can one learn from the other?, on Shane’s website.
Shane Heywood provides an article that reveals how beer manufacturers are collaborating with smallholder farms to get a more secure supply chain, lower the cost of raw materials, and empower more households with income, and all in addition to improving yields from farming that could change lives for the 2 Bn+ smallholder farmers in the world.
While interacting with 20+ smallholder farmers in Kenya, I, in addition to charities like One Acre Fund, had the chance to see first hand how improved yields from farming could change lives for the 2 Bn+ smallholder farmers in the world.
Yet, it’s not only NGOs / charities that recognize the value of farmers; beer manufacturers also work to collaborate with smallholder farmers. By incorporating the outputs from farmers as raw material, firms can get a more secure supply chain, lower the cost of raw materials, while empowering households with income.
Read the full article, Beer and Farmers in Sub-Saharan Africa: What’s next?, on Shane’s website.