For a lot of people, the COVID-19 pandemic has already resulted in financial difficulty — and even, in some cases, devastation. For a smaller group, things have remained the same economically. But in the middle of the two is a large — and distinct — group that brands may not know to target (much less how to target). We call that group The Modifiers.
The name came as a result of a proprietary study called the COVID-19 Personal Finance Study. We asked a number of questions about how they’re feeling at this time, and categorized them into three groups, from most to least affected: Recoverers (26% of participants), Modifiers (47%), and Optimists (27%).
Here’s some demographic info on this group, which is the largest of the three by far:
Most likely in the middle class (average income $55K)
Most likely older Millennials and Gen X
Over-index in industries that have been hit hard but are able to bounce back (e.g., retail, business services, transportation, tourism, etc.)
Over-index in parents and caregivers
Despite a rather significant bump in the road, the Modifiers have remained mostly stable, with relatively small changes to daily life needed in order to make it through. They or someone in their household may have experienced a layoff or furlough during the lockdown, but their jobs will more than likely be available when business picks up again. But right now, they’re making financial sacrifices, which brands need to be aware of.
FIG COVID Segmentation Study. May 2020.
As far as their shopping behaviors: they are still purchasing essentials, both online (leading to an uptick in services like Instacart and Grubhub) and from local businesses, but they’re spending smarter and cutting back on some things they once thought were necessary. Beyond that, they’re still treating themselves, but they’ll look for cheaper versions of products, or especially good deals from brands.
One example of a brand responding well to this new shopping behavior is Apple, with a perfectly timed release of a new $399 iPhone — 40% less than its next-cheapest model. It’s an ideal way to reach people who are willing to spend on practical, high-quality daily-use items, provided the price threshold is palatable enough.
It’s also important for brands to be aware of how Modifiers consume media. Some Modifiers may continue to keep cable for news during the crisis. However, as the news focus starts to decrease, along with the slow increase of live sports, some of this group may cut the cord soon, if they haven’t already done so during the shutdown. But when it comes to streaming services, the numbers show a greater sense of devotion: Nearly 70% of those who subscribed to new streaming services intend to keep them. And streaming services have responded to this influx by doing their best to retain existing consumers and to acquire new ones (with many expanding the length of free trial periods).
FIG COVID Segmentation Study. May 2020.
The Modifiers will be able to bounce back quickly when the economy reopens. They’re currently stressed out, but optimistic that things will get better, and proactively looking for ways to gain control of the situation and get back on their feet. And when it comes to this resilient group, a brand’s role is to be a source of encouragement along the way, showing willingness to add value — both now and once normalcy returns.
For a more detailed breakdown on the Modifiers as well as the two other consumer segments we’ve identified — and ideas on how to reach them, see here.