I recently posted about the 4 biggest marketing game changes, based on a survey of nearly 2000 CMO conducted by IBM. But, there wasn’t enough time to talk about all the game changers. So, today, I’m going to talk about changing consumer demographics and the potential impact of this game changer for businesses. I’ll also talk about how business should change their marketing strategy to capitalize on this demographic shift.
Unprepared for Changes
According to the study, not only do 63% of CMO believe shifting demographics create a significant impact on their business, but 37% feel they don’t know how to manage the change.
Gone are the day’s when aggregate customer data drove corporate strategy. Shifting demographics mean there is no AVERAGE consumer today. Instead, our economy is made up of a multitude of diverse people.
Today’s successful organization knows they need to understand INDIVIDUAL customers. Constantly monitoring customers across touchpoints, evaluating analytical trends, and micro-marketing to diverse niche markets are the new normal.
Tapping the Digital Grapevine is hard for organizations more comfortable with aggregating data versus parsing it into more meaningful understanding.
Market research based on surveying customer needs has given way to developing true understanding of individual consumers — what they value and how they construct their lives. Today’s firms need to learn how to manage the vast amount of data available on social networks giving unprecedented insights into the lives of everyday consumers. Here, the tools of the anthropologist are more important than those of a statistician. Here’s what the report says:
Real-time conversations with real individuals are also a valuable source of new ideas. And when an organization monitors these social sources for brand mentions, it can rapidly respond to negative exposure before it can spiral out of control.
So, what are some major trends we in demographics?
- Changing roles of men and women. In the ’70’s, the roles of men and women were relatively clear. No more. More women are interested and active participants in sports, for instance. And more men are concerned about their appearance, creating increased demand for skin products and more fashionable clothing. In fact, women now out-earn their significant others in nearly 1/3 of all households.
- Baby boomers are aging and creating a new senior reality.
- Growing power of minorities. The US is now comprised of more ethnic groups, with Hispanics now being the largest minority group in the US. African Americans and Asians round out the top 3 minority groups. Not only are the relative sizes changing, but the wealth controlled by minorities is greater than at any time in the past. This concentrates a lot of buying power in minority groups. Our population also contains more diversity in terms of alternative lifestyles.
- Family structure. The nuclear family of Ozzie and Harriet is now only 21% of US households and most of these (59%) are 2 income households. There are over 2 million stay-at-home dads.
- Better education. Most Americans now have a high school education (although only 87% are graduates, up from 69% in 1980). And more folks have some college and 30% have a college degree.
Managing with Shifting Demographics
- Firms need to think about individuals, not stereotypes.
- New products created for emerging groups offer pronounced strategic advantage to their developers.
- Advertising through mass channels must be supplemented by targeted ads at niche markets.
- Services must cater to increasingly time-crunched individuals and families.