Today's Marketing Week has an article about the importance of demographics (The shrinking and emerging demographics marketers need to know)
In my experience most marketers group demographics in the same the same category as statistics. Something that they study for an exam and then forget about. I suspect that many are clueless about the subject.
In my mind it is the foundation for understanding what is happening with the size and spending power of markets.
The article is a tad difficult to follow but does make some useful points. Here are a few of them:
"Over the past decade over one million people who would previously have bought houses, have been forced to rent instead" This is going to have a long-term impact on how this group spend their discretionary income (what is left of it after they have paid their rents).
"There is a polarisation of wealth, creating a marked gap between old and young, homeowners and renters, high-net worth individuals and the rest of the population. As a result, the consumer groups marketers target today may not exist in the same capacity in the future – if at all." I couldn't agree more, but I doubt if this is reflected in they way most companies allocate their marketing spend.
These group behaviours are tempered by “multi-generational spending”, as older generations become part of the purchase decision due to their contributions to mortgage deposits, cars and major household items. “A lot of advertising and brand image goes towards portraying younger people, who are not necessarily the people who are paying for all the purchase of a car or holiday. There’s a trick for some brands to pitch to the influencers, aiming at the people who are footing the bill or at least part of the bill. You might think it’s all about pitching to someone in their late 20s, but in reality the purchase decision could be based on their parents and their level of influence.” This is blindingly obvious but is rarely reflected in marketing campaigns.
I spend a lot of time in my latest book (This I Know) explaining how the lack of wealth accumulation by younger generations means their spending capacity will be greatly reduced. There need to pay high rents and to try and accumulate pension and care provision will decimate their discretionary income - and spending.
A lot of companies are in for a horrible surprise. Dick Stroud