Several decades ago, I did a long term forecast of the jeans industry. The key predictor in the study was the number of jean purchases by age group. Specifically, kids under 15 wore nothing but jeans. In contrast, no one over 30 wore jeans. We developed various models to show how the jeans market would explode as these kids grew up and continued to wear jeans. You can see the same phenomena today with the Internet. While adults are struggling to keep up with the changes, kids are being raised on apps, search, videos, you tube, social media, game phones, and other devices that they use and develop. It may be difficult to predict precise outcomes, but we know the nature and direction of these trends in future years. Demographics are typically used to learn more about a population’s characteristics and businesses must rely on demographics as a key method for planning.
Strategic Recommendations
Polarization
We live in a highly polarized country, which virtually eliminates marketing to all of the people, all of the time. Specifically, we need to target our customers in terms of who are most likely to buy our products or services. As an important aside, it is generally good advice to avoid alienating customers by discussing topics such as politics, religion, etc., unless you are sure of their preferences .
Segmentation
One of the most interesting aspects of today’s markets are the various niches that exist. One terrific example are the New York City restaurants thriving on narrow segments, such as meatballs, sliders, $1 pizza slices, Cronuts, varieties of $4 cupcakes, etc. This level of segmentation is occurring in virtually every market.
Women and Hispanics
Marketing to special segments, and especially the growing female and Hispanic segments, can provide huge opportunities. Much of this simply requires language, presentation, and customer service that cater to these specific groups. It does require, however, some careful attention.
Digital
I used to say Internet, but now, I use the term digital to include all the phone and Ipad/tablet devices that consumers are using. These tools provide opportunities to communicate and sell various consumer segments
Changing business structures require different approaches
Taking advantage of demographic opportunities is an especially good idea, because large companies are typically slow to change and focus only on large markets. A key requirement to execute this opportunity is a reliance on open systems. Open systems typically reject bureaucracy, authority, hierarchy, and closed decision making processes. Instead, they encourage participation, diversity, new rules, and, to some extent, chaos.
Collaborative Decision Models are an offshoot of open systems
One of the most common outcomes derived from open systems is what is known as the collaborative decision model. As decisions become more complex, the need for diversity, internationalism, innovation, and expertise expand. This is particularly relevant when examining today’s demographics and demographic trends. This applies to utilizing outside experts and resources to maximize your efforts.
Conclusion
Ignoring demographics and demographic trends, whether on a small scale or large scale (depending on the business involved), will be done at a business’ peril. Make certain to constantly evaluate relevant demographics and demographic trends as they relate to your business, both in the now, and in the future.
Bert Shlensky is president of www.startupconnection.net. Our integrated approach to starting a business incorporates several aspects of demographics, especially in areas like targeting, forecasting and marketing.