OPINION17 October 2016

Demographics are dying

Opinion Retail Trends UK

Shoppers should no longer be segmented by traditional demographics argues smp’s Chris Cooper, as he offers seven mindsets as an alternative.

Type the word ‘demographics’ into this website’s search function. It will bring up an archive of more than 600 articles.

The research industry, and its close cousin marketing, are clearly still keen on the 60-year-old segmentation system that is the basis of consumer classification as we know it. The father of marketing segmentation, Wendell R Smith, would doubtless be proud.

But times are changing, and so is people’s behaviour. The technology revolution is altering consumers’ shopping habits and fragmenting audiences to the extent that we must ask ourselves, are the broad church groups that form the basis of demographics still relevant?

Driven by a desire to discover a better way of understanding the modern shopper, we conducted a study exploring their motivations and values, and the influence these have on purchase behaviour. We spoke to 1,000 shoppers across different sectors, as well as industry experts.

Our preliminary research led to one conclusion: we need to come up with a new framework for understanding shoppers. To do so, we turned first to Victor Schwab’s 40 emotional drivers that inform people’s decisions. While these are full and insightful, they needed scientific validation. We therefore used Abraham Maslow’s hierarchy of needs to further categorise and fine-tune Schwab’s work.

From this, we discovered that how people shop can be defined by seven key mindsets instead of the old system of demographics:

  1. Conscious: they value helping others and our planet, and make ethical choices. They buy to reduce guilt, and look for ethical and sustainable products.
  2. Creative: a creative shopper wants to appreciate beauty and searches for aesthetics. When they buy, it is to gain beautiful and innovative things that they enjoy.
  3. Fulfilled: a fulfilled shopper aspires to be the best possible version of themselves, and to live a fulfilled and satisfying life. They look to inspire others and seek good experiences. When they buy, it is to improve themselves, and as a reward for their accomplishments.
  4. Influential: an influential shopper values standing out by being their own person and expressing their identity. They buy to improve self-confidence and social status.
  5. Knowledgeable: a knowledgeable shopper aspires to be well-informed. They value satisfying their curiosity and having journeys of discovery. They buy in order to gain knowledge and have learning experiences.
  6. Secure: a secure shopper values protection and reliability, and avoids taking risks, aspiring to be safe and secure above all. They therefore value price and convenience when shopping. They buy to increase comfort, and will look for chances to save time, money and effort.
  7. Sociable: a sociable shopper seeks connections with others and wants to belong to a group. They value sharing and putting a smile on people’s faces. When they buy, it is to win the affection of others and nurture the meaningful relationships they have with friends and family.

These seven mindsets aren’t based on age, gender or income. A 66-year-old retiree is just as likely to have a ‘sociable’ mind-set as a 22-year-old student, for example. They also aren’t static across people’s lifetimes, instead changing in response to personal experiences like university, marriage and home ownership.

Mindsets also change depending on which sector people are shopping for. As groceries are among the most essential items we buy, it’s unsurprising the ‘secure’ mind-set prevails when shoppers head to the supermarket. For alcohol shoppers, thanks to better access to information and the popularisation of connoisseurship, the ‘knowledgeable’ mind-set is notably strong.

Personal care is the only sector where ‘conscious’ – the mind-set most closely connected with ethical shopping and the desire to be ‘a good person’ – is one of the most dominant. With natural products taking an ever larger chunk of the personal care market, it’s likely the ‘conscious’ mind-set is strongly linked with growing consumer mistrust of synthetic and chemical products.

Mindsets need to be treated as a primary lens through which to better understand shopper behaviour. This should take a three-pronged approach, with brands proactively considering the mindsets that typify their category; what happens when shoppers enter the retail environment, and how mind-sets vary across markets.

Researchers and marketers might bemoan the decline of demographics as a catch-all for consumers, but help is at hand. By being mindful of the seven mindsets, they can begin to understand the modern shopper, improve targeting and boost sales.

Chris Cooper is head of planning at smp


8 years ago

Some good thoughts. I really appreciate the way you have outlined the seven mindsets. I am hopeful that things will be seen differently versus following the conventional.

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8 years ago

Being mindful of the seven mindsets is one thing but how do you attribute these mindsets to your customer base and subsequently monitor the changes?

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