29 September 2020
5 min read
Today and tomorrow’s consumers, our Future Consumers, are more diverse, empowered, and expressive than ever before as a result of demographic shifts, cultural shifts, and technological advancements. In order to successfully adapt and deliver experiences in this new world, brands must first take a step back and understand who their consumers are.
So, who are these Future Consumers?
Future Consumers are more diverse than ever
In the early- to mid-1900s, United States society was mostly homogeneous. 85-90 percent of the population was white, and men outnumbered women in the workforce 2.5:1. In the past, life expectancies were shorter and birth rates were higher, contributing to a younger population. The homogeneous nature of society meant that consumers could be satisfied with relatively limited offerings and optionality.
But demographic shifts over the last half-century have significantly altered the makeup of society: A once-homogenous group has evolved into many subsets of consumers defined by race and ethnicity, gender, and age.
Race and ethnicity
The U.S. will soon become a “minority majority” nation, with people of color representing more than 50 percent of the population, up from 40 percent today. Gen Z is credited with being the most diverse generation ever, with 52 percent of the generation classified as white, while 25 percent is Hispanic, 14 percent Black, and 9 percent other races or ethnicities.
Women, although always accounting for roughly 50 percent of the population, have gained more representation within the workforce and as breadwinners of the household over recent decades, providing them with a louder voice and more influence. Today, 60 percent of women participate in the workforce -- which is up from 30 percent in 1950 -- and more than 25 percent of households in the U.S. are headed by a single mother, which is double the amount in 1974.
You cannot stop time, as the elderly population is expected to grow to more than 20 percent of the total population in the U.S. over the next 20 years. For the first time ever, there will be more elderly adults in the country than children. Today, more than 20 percent of the workforce is over the age of 55, which is up from 11.6 percent in 1993.
Future Consumers are more empowered than ever
Technological advancements have tipped power dynamics in favor of the consumer at all points along the consumer journey, democratizing information and distribution and providing greater price transparency.
Today consumers can price match, check reviews, and ensure the quality of products before buying them. At the point of purchase, they have endless digital options: there are 1.9 billion global websites, 884,000 online stores using Shopify, and 350 million SKUs on Amazon all looking to satisfy consumers’ needs. And after buying a product, there is a feedback loop of reviews that are shared not only with other consumers, but directly back to brands via social media platforms that hold brands accountable.
Future Consumers are more expressive than ever
Consumers used to rely on traditional cultural indicators - like political parties, religion, and vocations - to serve as a source of identity. Recent cultural shifts have led to a decline in consumers’ affiliations with these sources: 50 percent of millennials aren’t affiliated with a political party, 35 percent are not religious, and the rate at which people change jobs has doubled in the last 20 years.
As a result, culture is becoming more relevant to commerce as consumers shop for brands with values they want to express as a part of their own identity. 58-70 percent of consumers would pay a premium if a company embraced a cause that was important to them, 72 percent feel it’s more important than ever that companies reflect their values, and 64 percent buy based on beliefs.
Future Consumers have a new mindset around loyalty
Loyalty is a long-term relationship consumers give to brands that have earned their trust. Loyal consumers are brands’ ultimate fans and advocate for the brand, providing sought after word-of-mouth marketing.
“Brand loyalty” is often misconstrued as repeat purchases. In other words, if consumers repeatedly purchased the same product or service, they were considered to be loyal, regardless of how closely they identified with that brand. Repeat purchases are earned through features like design, quality, and price, but these product attributes have become table stakes; 4 out of 5 consumers believe brand and company attributes are just as important as product attributes when making a purchase. As a result, brands must differentiate themselves beyond basic product attributes to earn trust, and if they’re able to do so, they will elicit more loyalty from Future Consumers.
By having a deep understanding of who consumers are, brands will be in a better position to successfully adapt and deliver experiences that will build loyalty with future consumers.
This deep understanding of consumers -- at a niche level, not mass -- allows brands to appreciate and acknowledge the different needs, wants, and pain points that are specific to their consumers. These learnings should then be applied across business operations with the focus on increasing loyalty. Doing so will allow brands to deliver products that are uniquely tailored to their consumers and built to address their pain points. Brands will also have a better understanding of how their consumers buy and will be better able to serve them throughout the entire consumer journey, from the discovery phase to post-purchase support. And finally, a deep understanding of their consumers will allow brands to double down on values that resonate with their consumers.
This tipping point in consumer demographics and behavior is both a significant risk and an enormous opportunity for brands. But by understanding niche groups of consumers and solving for them first across all aspects of the business, brands will be able to capitalize on the enormous opportunity that changing consumer demographics have created.