Middle-class consumers have always been the most sought after class for retailers across the globe. Retailers have always offered great discounts and schemes to attract middle class consumers to increase brand loyalty. Recent advances have witnessed a change in the path. The leading retailers, Amazon and Walmart are targeting the upper and lower bound income consumers to boost sales leaving the middle class. With its Prime service, Amazon has captured the loyalty of 70% of the upper-class customers having an income of more than $112, 000 a year.
Now, they are shifting towards the lower-income customers living with government support schemes and earning less than $15,444 a year. It was proposed by Amazon that they would reduce the cost of prime membership to $ 5.99 a month for the customers having an electronic benefit transfer card for government support schemes. Walmart witnessing the change also have acquired many small companies such as Jet.com, Modcloth, Shoebuy, etc. to focus on both upper and lower class of income.
Widening of the gap between rich and poor
Here are some, Middle Class Facts. When Walmart started its business, the middle class consumers were on the rise. The change in habits, a shift in jobs, increase in knowledge and high skilled jobs has deteriorated the existence of the middle class. After the recession, people had started to save more money which affected the sales in the mall. It has been observed that retailers who primarily focussed on middle class had to close some of their stores.
Consumers today are ready to spend more on traveling, restaurants and great experiences. Today’s consumers have higher fixed costs. They have fixed health care costs, insurance, and technology costs. Looking at the current scenario and statistical numbers, the middle class is gradually evaporating. The retailers are identifying opportunities in both ends of income classes offering great advantages, products and solutions.