Demographic Targeting

The Essential Role of Population Groups in Retail Marketing

James A. Pooler

• Publisher: Routledge
• Year: 2018
• Print ISBN:
  9781138739352
• eBook ISBN:
  9781351730310
• Topic: Physical Sciences
• Subtopic: Geography
• Index: Geography

This title was first published in 2002: Retailers who ignore the demographics of their customers do so at their peril. Examining the role of age and gender in the behavior and patterns of shoppers, this book looks at all shoppers as members of distinct demographic groups, each of which marches to the beat of its own drum. We can say a lot about people and their shopping behavior simply by examining their demographic group membership. For example, we can say that middle-aged shoppers have less time available for shopping, but more money. Such ideas provide valuable information about how to sell to them. Demographic targeting is the key to success when it comes to modern retailing. This book takes a look at shopping from the perspective of demography and considers the demographic group to be a crucial concept for understanding the modern shopper.

Chapter 1

Demographics and Shopping: Introduction

A harried, middle-aged female shopper hurries into a clothing store in a mall. She is on her way home from work, needs a new outfit for Friday night, and has to get home to cook supper before she takes the kids to their evening soccer game. She is desperate to buy something and wants to purchase it quickly and efficiently. She does not want to walk all over the mall, nor does she want to drive all over town looking for clothes. She just does not have the time.

At the same time, in the same store, there is a teen shopper. She is on her way home from school and is in no hurry. She has nowhere to go, has all the time in the world, and is not really anxious to make a purchase right away. She is just looking around. She will probably wander the mall for a couple of hours and maybe she will shop more on the weekend with her friends.

Simultaneously, a husband on his way home from work enters the same store. He is looking for a gift for his wife. He hopes to find a good selection in this one store. He is not inclined to visit a number of different stores because the whole experience makes him uncomfortable. He just wants to find a nice sweater, with a minimum of fuss. Price is really no object as long as he can just find a nice item to buy and be on his way.

What we see at work in these three situations is the important role of demographics in retailing. We have three people shopping in the same store but because they belong to different demographic groups, they take entirely different approaches towards their shopping goals. In addition to different objectives, they also have different budgets and their shopping schedules and patterns are completely dissimilar. These three shoppers provide a good example of the critical role that demography plays in shopping.

This book studies the impact of demographic groups on shopping. As it undertakes this task it pays special attention to the roles that sex, and especially age, play in patterns of shopping. The book is organized around the theme of demographic groups – each chapter identifies a group and then takes a look at the likely shopping patterns for that group. We can refine our ability to sell to shoppers by targeting the demographic groups to which they belong. This exercise is called DT – demographic targeting – and is designed to give us the greatest potential insights into the shopping patterns of consumers. Demographic targeting plays an essential role in reaching retail markets.

We can say a lot about people and their shopping behavior simply by examining their demographic group membership. For example, middle-aged shoppers have less time available for shopping but more money. Such ideas provide valuable information about how we should sell goods to them. It says we should sell them items that are convenient and easy to buy, and it says that they are probably willing to pay a premium price to get such products. It also says they may be looking for a bundle of items under one roof. Similarly, we can say that teen shoppers have a lot of time available for shopping but less money. Such information provides a clue as to how to market products to teens. It says we should sell them items that are inexpensive. It says they have lots of free time to find what they want – they will comparison shop. They will take their time shopping and they may look at an item several times before they buy it. My teenage son is a perfect example of this style of shopping. It tells the retailer to be prepared for finicky but determined shoppers. It also tells the retailer that his prices must be aggressive for teens because they will be very aware of the competition’s prices.

The retailer who ignores the demographics of his customer does so at his peril. As the examples above demonstrate, having knowledge of the demographic group to which customers belong tells us a great deal about their needs and desires as shoppers. Demographic targeting is the key to success for modern retailing.

The modern shopper can best be understood by considering him or her to be a member of a distinct demographic group that has shopping needs that are particular to it. This book takes a look at shopping from the perspective of demography and considers the demographic group to be a crucial concept for understanding the modern shopper.

What are the Demographic Groups?

Turn on the radio. What do you hear? Does it seem to you that no matter where you turn the dial you hear songs from the sixties? If so, you are not alone. The fact of the matter is that there is a good reason why songs from the past dominate the radio dial. The reason is found in demographics. The biggest and best-known demographic group, and the one that most people have heard about, are the baby boomers. This is that large group of children that were bom in the years following World War II, mainly from about 1946 to 1964. People were happy and optimistic about the future after the war, and so birth rates soared to new heights. The result was the birth of the baby boomers, that group of people that are now between forty and sixty years of age. This is a massive group of people and throughout their lifetime they have come to dominate virtually everything they touch. Why are there so many songs from the sixties on the radio? Because the boomers are a big market and this is thought to be the music they prefer to hear.

The boomers dominance of the radio is a good example of a demographic influence that affects everyone. Wherever you go, whatever you do, you hear music from another era. Drive in your car, go to a restaurant, walk through a store and you are likely to hear music from the past. The boomers were teenagers in the sixties and their musical legacy continues to dominate the airwaves just as they themselves dominate the marketplace.

There are other well-known demographic groups. Many people will have heard of Generation X, the supposed lost generation that lives in the eclipse of the early baby boomers. This group of people, later bom boomers, is said to suffer the consequences of living in the shadow of the early boomers. For instance, it is said that the early boomers took all of the best jobs before Generation X could get to them. Another well-known demographic group is found in so-called Generation Y that is considered to consist of the children of the baby boomers. The idea is that the big group of baby boomers all had their children at about the same time in life and this caused another mini-boom in the birth rate. Generation Y is considered to be a demographic group that is overindulged and spoiled by its wealthy parents, and one that was raised on Nintendo and MTV. Generation Y has never seen inflation or war and as far as they are concerned, the stock market always goes up. They are said by some to live in an unrealistic world because they have lived highly protected, affluent lives.

These three are the best-known demographic groups. The idea of classifying millions of people into convenient groups is a popular one. It lets us simplify the world and talk about it as if it consists of just a few simple groups. This book takes this idea but broadens it and puts it to use in the study of shopping. It says that not all shoppers are alike but that we can distinguish between them based on their demographic groups. It says that all shoppers can be classified into unique shopping categories and that it is easier to understand shoppers by looking at them as members of a demographic group.

By understanding demographic groups, we can better understand how people will shop and what they will buy. Knowing that a shopper is male and fifty years of age tells us something important about him. If he is a busy executive at mid-career, it tells us that he is primarily interested in buying high-end items that will bolster his self-esteem and pay himself for the hard work he does. On the other hand, if a shopper is sixteen-years old and female that tells us that she is probably interested primarily in clothing, make-up and fashion. The basics of age and sex tell us a great deal about shoppers, and how they will shop. They also tell us a great deal about how retailers should market their products and how advertisers should approach their audiences. Demography is important.

The New Shopping

At the same time that there is a new significance to demography, there is also a new shopper out there. Whether she is middle-aged or a teenager, she is shopping at a different level of needs than her ancestors. While people once bought goods for which they had a real physical need, the new shopper shops on a higher plane. She is shopping for reasons – emotional, psychological – that are totally different from those of the past. This book is also about retailing in this new world. It is impossible to appreciate the significance of demographics without reference to this new world of shopping.

The retailer must get in step with the new shopper. He must tune-in to the new shopper and come to realize that she is shopping at a different emotional state than her sisters of the past. No longer is it sufficient to try to appease the modern shopper with old-fashioned goods that offer quality and value. The new shopper wants possessions that satisfy her soul. She is shopping for goods that fulfill her need for personal self-actualization – for inner well-being and emotional contentment.

There was an important psychologist in the 1940s who revolutionized the way we think about ourselves. Abraham Maslow invented a new way to look at how people live their lives; how they order their priorities and set their very goals in life. Maslow suggested that life consists of five levels. The five levels range from an elementary one where we satisfy the most basic needs – like those for food and shelter – to one where we satisfy our highest psychological needs – like those for inner emotional fulfillment. Maslow suggested that the higher needs can only be fulfilled once the lower needs are met. This book argues that when it comes to shopping, our lower level needs have been met and that we are now shopping on a higher plane, where a higher level of needs is being satisfied.

This book is also about why we shop. It says that we shop to self-actualize – to fulfill the highest level of Maslow’s Hierarchy of Needs. It says that the modern shopper can only be understood if he is viewed as a being that is shopping to fulfill high level, emotional needs. It says that the modern retailer can only survive if she targets herself to this new kind of shopper. Demographic groups must be viewed from the perspective of this revolutionary change in the very nature of shopping.

Getting basic consumer needs is now a trivial matter for most people. Everyday items are readily available and almost everyone has enough income to take care of the fundamental essentials of food and shelter. We are living in an affluent society. As the basic levels of Maslow’s set of needs are more easily met, consumers move to a higher plane. We have moved beyond the basic levels into those where emotion and personality come into play. We used to be happy to have a nice house and a clean car. Today our feelings of inner well-being, achievement and prosperity arise from a more intricate world. Today we feel good when we wear fashionable clothes, drive a sophisticated vehicle, or own the right designer labels. There has been a change in priorities, and retailers need to grasp that the consumer’s mind is on a different level than it used to be. Whether it is the young adult demographic, or the baby boomer group, the importance of this new mindset is crucial to understanding the modern shopper.

Shoppers used to be content to buy a simple cup of coffee. Today they demand a double grande latte from Starbucks. The everyday simple shopping experience of buying a cup of coffee has been replaced by one where the customer gets an emotional lift and a sensory experience from the event. This simple example is truly indicative of the way in which the new shopper is evolving to a higher plane of needs. What other products can duplicate the success of Starbucks? How else can everyday products be elevated to the point where they provide an almost therapeutic experience?

Whether it is for a $2 cup of coffee, or whether it is for a $50,000 vehicle, today’s shopper shops for the mind. The shopper who buys an expensive sport utility vehicle is just like the shopper who buys at Starbucks. He is not just buying transportation. He is buying selfconfidence, self-esteem and a boost for his ego. He is buying an emotional lift, he is making himself feel good, and he is probably rewarding himself for the good job he does at work. The purchase is about everything but transportation. The purchaser of the sport UV is buying an image of himself and his lifestyle. It is supposed to say that he is a rugged, off-road type of person who likes the great outdoors and who likes to get away from it all. Today’s buyer of a sport UV is shopping at a higher level of needs than the shopper of the past. It is all about psyche and emotion.

The Starbucks example and the sport UV example provide good indicators of the true nature of the modern shopper. There is a revolution underway in the way we shop. From our obsession with designer labels, to our fascination with buying for emotional reasons, there are profound changes taking place in shopping. This book examines shopping from the ground up and with an eye towards the idea that shopping today is on a higher level of emotional need than ever before. This is true for all demographic groups. There is a new world of shopping out there that does not work by the old rules.

Shopping the Levels

One way to look at the mentality of shopping is to suggest that it consists of a number of levels, just like Maslow’s Hierarchy. On the way to shopping at the highest state there exist other levels of shopping needs. There are five levels that Maslow identifies and these are illustrated, in the form of shopping levels, in Figure 1.1. At the bottom is a level of shopping for basic physical survival needs. This includes shopping for necessary foodstuffs and other essentials of existence such as shelter and basic clothing. This is the shopping that people must do to survive. It is shopping that is usually routine and habitual – shopping for basic groceries or other household essentials.

Figure 1.1 A Shopping Hierarchy of Needs

At the second level there is shopping for security needs. In Maslow’s Hierarchy it is argued that people have a basic need for personal security. In shopping this comes about through purchases of items for health and safety. Everyday necessities such as toiletries are part of this kind of shopping, as are purchases of medical or dental services. Similarly, shopping for items related to personal hygiene is part of the second level of shopping.

Shopping at the first and second levels does not overly engage the senses. It is traditional shopping, as we know it. At this level, shopping is a practical affair and shoppers are not really shopping for the mind or for emotional reasons. This is shopping for everyday basics and as such it often involves filling the food cupboard. Shopping at this level can involve any product so long as the shopping experience is seen to be routine by the shopper. Buying that gift for Uncle John, buying a new washing machine, or even buying a car, can be a dull, uninspired and even painful event for many shoppers. The essence of distinguishing between the different levels of shopping is often found not in the goods that are being bought but in the emotional investment of the shopper. For example, buying that gift can be excmciating for some people. Alternatively, buying a gift for a loved one can create a sense of joy and emotional uplift for others. The levels of shopping are not so much in the goods being bought, as they are in the minds of the shoppers.

In spite of the apparent routine of shopping at the first and second levels, shoppers do engage in shopping for value and so this kind of shopping can be challenging. Comparing products, shopping for good prices and looking for bargains become the order of the day. This kind of shopping can be demanding and rewarding, and many people put in a serious effort in shopping for good deals. Nevertheless, this kind of shopping is not meant to be mentally stimulating or emotionally rewarding. It is mostly about getting the job done where such shopping is viewed as a routine matter of survival.

At the third level of shopping comes shopping for belonging and social acceptance. As we shall see later, this kind of shopping plays an important role in the purchases that people make. Every demographic group, from children to adults, has a need to feel social acceptance and the feeling of belonging, usually to a group of some kind. The group may be informal (a circle of friends) or formal (a church). In either case, studies show that the sense of belongingness that is created by group identity is crucial to human psychological well-being. Shopping for belongingness includes behaviors such as teens buying the ‘correct’ clothing to fit in with friends or adults buying the ‘appropriate’ sporting goods – such as golf clubs – in order to establish membership in an informal social group. Shopping to belong is a central part of a great deal of shopping behavior and we shall see how it plays a role for almost all demographic groups.

At the fourth level of Maslow’s Hierarchy comes the need for personal self-esteem. This includes the need for self-respect, the respect of others and for prestige. When it comes to shopping this involves buying possessions that ‘make’ the person in the eyes of others. Owning and buying particular products can make one feel good and can create feelings of self-esteem. An adult might create feelings of self-worth by buying a particular new vehicle that provides a sense of personal well-being and raises the self-image. A teen might achieve similar goals by buying new clothing that is the latest in style. In e...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• List of Figures
• 1 Demographics and Shopping: Introduction
• 2 The Young Parenting and Infant Demographic: Time-Pressed
• 3 Young Children: The End of the Age of Innocence
• 4 Pre-Teens: The Shopping Pressures of Growing Up
• 5 Teens: Shopping for an Identity
• 6 The Young Single Demographic: Shopping for Self-Esteem
• 7 The Young Married Demographic: Shopping as Grown-Ups
• 8 The Busy Demographic: The Most Important Group
• 9 The Baby Boomers: Shopping for Emotional Reasons
• Index