ACORN classification

In this study ‘A Classification of Residential Neighbourhoods’ (ACORN) demographic classification was applied to identify the profile of online consumers. This is the longest established commercial geodemographic classification in the UK (CACI, 2013). This customer segmentation technique categorises people into demographic types by postcode geography. ACORN also provides detailed classifications based on consumer’s attitudes, multiple characteristics and lifestyles. This geodemographic segmentation was designed by CACI, a partner organisation for this project. This detailed classification includes 62 types, which are aggregated into 16 groups from A to P (Appendix A). The brief description of the six categories which are used in this research is provided below (CACI, 2013).

Age Bands Ethnicity Economic Activity Social Grade Family Structure Age 0-15 Total Persons 16-74 Persons 16-64 Families

Age 16-19 White Econ active AB Couple family Age 20-24 Mixed Employee C1 Lone parent family Age 25-44 Asian Self employed C2 Male lone parent family Age 45-64 Black Unemployed D Female lone parent family Age 65+ Other ethnicity

Fulltime student econ

active E Family 0 dependent kid Male age 0-15 Econ inactive Family 1 dependent kid 0-4 Male age 16-19 Retired Family 1 dependent kid 5-18 Male age 20-24 Other econ inactive

Family 2+ dependent kids youngest 0-4

Male age 25-44

Family 2+ dependent kids youngest 5-18

Male age 45-64 Lone parent 1 dependent kid 0-4 Male age 65+

Lone parent 1 dependent kid 5- 18

Lone parent 2+ dependent kids youngest 0-4

Lone parent 2+ dependent kids youngest 5-18

Affluent Achievers

The first category consists of the wealthiest households in the UK. They live in the prestigious rural, semi-rural and suburban areas of the country. They are usually aged mid-forties and older (retired wealthy pensioners), whose children have already left the household. Some neighbourhoods also contain large numbers of wealthy families with school age children, particularly the more suburban locations. These people live in large expensive houses, which are usually detached with four or more bedrooms. Moreover, these people are more likely to own a second property. The majority of Affluent Achievers are well educated and employed in managerial and professional occupations or have their own businesses. They have substantial income of over £60,000 a year with an index of 343 for earners of over £100,000 in comparison to national baseline figures (100). They are very technologically savvy and tend to use the Internet daily for managing finance, utilities and investments, searching for local and travel information, visiting lifestyle and weather websites. Moreover, they like to purchase online goods (beer and wine are the highest expenditures in this category with an index of 150 compared to the average national figures of 100).These people are healthy, wealthy and confident consumers. Figure 3.1 provides a summary of their lifestyles and interests.

Figure 3.1. Affluent Achievers – Lifestyle. Source: CACI, 2013

These consumers are more interested in snow skiing, charity work and finances and least interested in bingo and football. They are the biggest spenders on wine and organic foods compared to their counterparts from the other five ACORN categories.

In terms of grocery shopping, Waitrose and Marks and Spencer are their favourite supermarkets with an index of 197 and 148 compared to the UK average of 100 (Figure 3.2). Asda and Morrisons are their least favourite grocery retailers. Finally, although enthusiastic Internet shoppers generally, Affluent Achievers are not the most enthusiastic online grocery customers compared to other ACORN categories with an index of 70 which is below national average (100). The profile of online customer will be discussed in more detail in the next sections.

Figure 3.2. Affluent Achievers – Preferences in terms of Grocery Shopping. Source: CACI, 2013

Rising Prosperity

These customers are well educated, cosmopolitans and mostly affluent young people living in urban areas. The majority of them are single or couples without children or with younger children. They are young professionals with successful careers. They live in modern executive apartments (although, some live in terraced townhouses). They are likely to rent their homes but a few have bought their homes. They are the most proficient technology users, an 'early adopters' generation and in possession of the new technological devices. They are outgoing, (often eating out) and enjoy entertainment (theatre, cinema and nightlife). Waitrose is their favourite supermarket and they are twice as likely to shop there as the average British consumer (Figure 3.3)

Figure 3.3. Rising Prosperity – Preferences in term of Grocery Shopping. Source: CACI, 2013

Their other favourite supermarkets are Sainsbury’s and M&S with an index 143 and 138 compared to the national base (100).

Comfortable Communities

The households within this category can be described as ‘average’, whether young or older living in the suburbs, smaller towns or the countryside. They have families and live in suburban or semi-rural locations. They also include comfortably off pensioners, living in retirement areas around the coast or in the countryside and younger couples who have just started to live together. The majority of them own their home. Most houses are semi-detached or detached and overall, are of average value for the region. Incomes are also average with the younger people earning proportionally less. They might have some limited savings and investments. Their job occupations are within managerial, clerical and skilled fields. Educational qualifications are in line with the national average. They are not very wealthy but comfortable off. Figure 3.4 shows their grocery shopping preferences.

Figure 3.4. Comfortable Communities – Grocery Shopping. Source: CACI, 2013 Figure 3.4 shows that customers belonging to this category do not have substantial preferences for anyone particular supermarket, although, they are least likely to purchase their groceries at Asda with an index below national average. M&S have a slight advantage with an index of 110 compared to Tesco with an index of 103.

Financially stretched

Households within this category live in the traditional areas of Britain, usually in low value owner occupied terraced or semi-detached housing and council rented homes, including social housing developments specifically for the elderly. This category also includes student households. Incomes are inclined to be below average. They are engaged in lower paid administrative, clerical, semi-skilled and manual jobs. They tend to hold apprenticeships and O levels qualifications. The unemployment rate and benefit claimant rates are above average. These customers are less likely to possess a credit card, investments, saving accounts or participate in a pension scheme. They are more likely to have problems with debt and have been refused a credit card. These people are less likely than average to use new technology or to shop online or research using the Internet, although they will use the Internet for social networking.

Generally, the majority of households within this category have a modest lifestyle while some of them are experiencing financial difficulties. Figure 3.5 shows preferences in terms of grocery shopping.

Figure 3.5. Financially Stretched – Preferences in terms of Grocery Shopping. Source: CACI, 2013

These customers naturally are least likely to buy their groceries at Waitrose, Sainsbury’s and M&S (Figure3.5). Their favourite supermarket is Asda with slightly higher index of 110 compared to Co-op (104) and Morrisons (103).

Urban Adversity

This category contains the most deprived areas of towns and cities across the UK. Household incomes are low, nearly always below the national average. The number of people having difficulties with debt or having been refused credit is nearly double the national average. The numbers claiming Jobseeker's Allowance and other benefits is well above the national average. Levels of qualifications are low and those in work are likely to be employed in semi-skilled or unskilled occupations. They live in overcrowded terraced and semi-detached houses and purpose built flats, including high rise blocks which they are renting from the local council or a housing association. There is a small proportion of privately rented and owner occupier households. The households tend to be single adult, pensioners and lone parents households. As expected, customers in this category are not inclined to do their food shopping at the more affluent and expensive Waitrose with an index of only 49 compared to an average consumer. In fact, these consumers have preference for only one of the major supermarkets – Asda with an index of 115 (Figure 3.6). In addition, these customers

are more likely to use discounters retailers (e.g. Aldi and Lidl), which are included on these graphs.

Figure 3.6. Urban Adversity – Preferences in terms of Grocery Shopping. Source: CACI, 2013

Not Private Households

These are the areas there the majority of residents are not living in private households and include military personnel bases, hotels, hostels, refuges, care homes and other communal council and medical accommodation. Although, some of these residents are potential grocery customers their contribution is minor and for that reason this category will not be included in this research. Moreover, some of these postcodes have already been incorporated into the previous five ACORN categories.