Think Beyond Demographics to Understand Your Consumers
Filed Under: Best Practices, Market Research
We are here. We are in the post-demographic consumerism era.
This idea of post-demographic consumerism is how people – of all ages and in all markets – are constructing their own identities more freely than ever. As a result, consumption patterns are no longer defined by ‘traditional’ demographic segments such as age, gender, location, income, family status and more.
Stereotypes that were so widely known and subconsciously relied upon to make decision about consumers are gone. And, Millennials have helped us see, and feel comfortable with going beyond stereotypes. They have helped us reach this post-demographic consumerism era where people feel free to construct their own identities. Because of this, consumption patterns no longer fall into traditional demographic segments that we are so used to.
So much of marketing and market research is reliant on demographics because it simplifies our understanding of people. And, perhaps in the ’50s and ’60s when traditional gender roles were followed, and people feared being different than what they were expected to be, stereotypes were reliable resources for creating products, communications, and expectations of consumers.
However, with the advent of the internet, the growth of ethnic minorities, the empowerment of women, and the expansion of all types of ideas, people are no longer afraid to step outside of what’s expected of them. And because of this consumerism is headed in a different direction.
Technology has been one of the key drivers of the post-demographic consumerism trend. Consumers now have access to an abundance of information that helps to shape their views of the world and themselves. As this has naturally occurred, people’s interests have become more diverse than ever before.
Demographics are no longer enough to profile consumers and determine how to communicate with them. People are more than their gender, skin color, the neighborhood they live in or their sexual orientation. While these are all major factors that impact how one may see the world; it’s short-sighted to only consider demographics when painting a picture of the consumer. Attitudes, behaviors and self-perceptions/identities are just as important, if not more important in understanding your consumer.
What does this really mean for brands? Brands need to start embracing this “new normal” and celebrate new cultural norms. One brand already taking advantage of this is Netflix. They have moved beyond using demographics to understand their users, and have learned that demographics are almost useless to them as an indicator of behavior. Their VP of Product Innovation, Todd Yellin said, “Everyone’s instinct was, ‘Yeah, if you find out their age and gender data, that’s fantastic’. But what we learned is: it’s almost useless”. Instead of using basic stereotypes like geography, age, and gender, Netflix uses a more complex global algorithm in order to give recommendations to its users. Todd also explained, “There’s a mountain of data that we have at our disposal. That mountain is composed of two things. Garbage is 99 percent of that mountain. Gold is one percent. Geography, age, and gender? We put that in the garbage heap. Where you live is not that important.” Because they use this global algorithm, it means, the titles that you are shown when you sign into Netflix are influenced by so much more than just where you live.
So remember to think outside the box when it comes to consumers, and truly understand them for more than what meets the eye.