Attitudinal segmentation could be more effective than traditional demographic profiling to reveal commonalities to help understand customers, buying behaviors and market potential.
Generational demographics can be useful in categorizing groups of people based on some common experiences and influences, but they don’t always tell the full story. Millennials can like The Rolling Stones; plenty of baby boomers order avocado toast. Not all commonly held beliefs are accurate, and clinging to stereotypical notions about any age group can limit profitability and growth.
All generations are experiencing the effects of globalization, innovation, technology, and the social media revolution, resulting in a merging of attitudes and behaviors. Accordingly, marketers may want to consider a more nuanced approach to profiling their target consumers, delving deeper into their attitudes and shopping behavior. Doing so can potentially help capture revenue from consumer segments that may go unrecognized and untargeted by generational marketing alone.
Based on a survey of 3,000 adults who were the primary shoppers and significant influencers in their households, The Deloitte Center for Industry Insights has developed four attitudinal segments of consumer products shoppers, challenging eight common generational myths.¹
Revealing Cross-Generational Commonalities
Attitudinal segmentation may not only help break down the stereotypes that come with traditional audience targeting but also reveal commonalities across generations that can help companies better identify current customers, buying behaviors, market potential, and communication preferences. Based on the survey, the four attitudinal segments and their demographic tendencies are:
- Aspirationalists—Lowest-income Generation Z or millennial adult males; more likely to be single. Twenty percent live with their parents.
- Responsible Go-Getters—Predominantly married Gen X and millennial males and females with above-average incomes.
- Pragmatists—Married Gen X and baby-boomer males and females with average incomes.
- Discerning Achievers—Higher-income Gen X and baby-boomer females; more likely to be married.
Although each attitudinal segment may be dominated by one or two demographic groups, consumers of all generations are present in each segment. (See infographic for more detail.) This schematic is meant to be illustrative rather than definitive; organizations may want to consider developing their own customer-segmenting approaches.
Common Myths Debunked
Comparing these findings with stereotypical generational assumptions, the Center for Industry Insights has identified eight common myths that consumer product companies may want to reconsider as they develop marketing strategies.
Myth 1: Generation Z primarily shops online.
Busted: All age groups prefer shopping in brick and mortar stores, particularly for food and beverages, household items, and personal care products. The only preferred category for online shopping by these younger consumers is apparel and footwear.
Consider: Aspirationalists tend to shop online for consumer products. Though this segment does skew younger, roughly 28 percent are older consumers, according to Deloitte’s survey. Thus, Aspirationalists could present a more profitable target for online shopping than Generation Z customers alone.
Myth 2: Only younger consumers consider themselves health-conscious.
Busted: Though Aspirationalists trend higher for healthy and organic products, Discerning Achievers, many of whom are significantly older, lead other segments in perceiving themselves to be health-conscious and ingredient-sensitive.
Consider: Discerning Achievers spend more on food and beverage items than other segments. Because they place more importance on nutritional content than other segments do, they could play a role in driving the health-oriented food market.
Myth 3: Value seekers are less affluent.
Busted: Regardless of segment or income, most consumers rate value as an important factor for product consideration, right after quality and price. Indeed, consumers with moderate-to-high incomes consistently think of themselves as more price-conscious, deal-seeking, and frugal than others.
Consider: Each segment may have a different definition of value. Discerning Achievers, who can and do spend more on consumer products, find value in enduring quality, while Pragmatists find value in lower prices.
Myth 4: Younger generations don’t care about brands.
Busted: More than 85 percent of Aspirationalists believe the brands they buy say a lot about who they are, while 87 percent report buying name brands, according to Deloitte’s survey. In fact, it’s the older-trending Discerning Achievers and Pragmatists who are less interested in brand names.
Consider: With many Aspirationalist consumers receiving validation from brands, there is an opportunity to reinforce brand relevance among consumers with value messaging that is not necessarily tied to price.
Myth 5: Traditional advertising channels hold little appeal for younger generations.
Busted: More Aspirationalists (83 percent) than Pragmatists (18 percent) and Discerning Achievers (12 percent) enjoy watching ads on TV, according to the survey. Further, when questioned about using traditional advertisements and promotions, 89 percent of Aspirationalists and 69 percent of Responsible Go-Getters cite newspapers and television as sources for product awareness.
Consider: Traditional media remains popular for raising awareness among younger-skewing audience segments. Overreliance on social media may unintentionally omit a significant opportunity to influence consumers.
Myth 6: Older generations don’t use social media.
Busted: More than 70 percent of consumers in each segment use Facebook, with YouTube following as a close second, according to the survey. The segments use social media differently, however. Aspirationalists and Responsible Go-Getters use social media to engage with brands and connect through online communities. Discerning Achievers and Pragmatists are less interested in generating content, but they do read reviews and ratings before purchasing new products.
Consider: Social media can help build relationships with older-trending audience segments, through such tactics as rewarding product-experience posts with coupons or loyalty points. The opinions of this group could influence younger-skewing segments.
Myth 7: Only older generations use coupons and discounts.
Busted: More than seven in 10 consumers across segments are looking to save money via coupons or loyalty cards, per Deloitte’s survey. Indeed, the proportion is considerably higher among younger-skewing Aspirationalists and Responsible Go-Getters.
Consider: While younger-trending segments claim to have no time to bother with coupons or promotions, programs with unique elements such as gamification or other experiential marketing activities could appeal to Aspirationalists and Responsible Go-Getters.
Myth 8: Innovation and brand growth are fueled only by younger generations.
Busted: Discerning Achievers showed a high level of interest in innovations such as customized products and smart packaging. They also have greater buying power and assign importance to quality in consumer products categories.
Consider: Given their buying power and interests, Discerning Achievers could be a valuable untapped group for marketers provided they can demonstrate the value proposition of their innovative offerings.
*****
Marketing strategies based on attitudes and shopping behaviors can become more appealing to consumers, and attitudinal segmentation can result in more thoughtful targeting, likely leading to more innovative product development that is more effective with consumers.
–
This article first appeared in www.deloitte.wsj.com
Guest Author: Barb Renner, vice chairman, U.S. Consumer Products leader, Deloitte Tax LLP, and Curt Fedder, senior manager at Deloitte Services LP’s Center for Industry Insights
