DMCNY speaker discusses changing American consumer
NEW YORK - Maturing consumers, emerging minorities and a changing household composition, as well as values, needs and lifestyles are the important ways American consumers are changing today.
These demographic and attitudinal trends are blending to produce a new breed of consumers, and understanding these trends is important to Americans because they are changing the social fabric of the nation.
"As direct marketers, understanding these trends is critical in order to communicate effectively with these diverse consumers and maximize the impact of our marketing programs," said Ellen Farley, president of Brewster, NY-based FMC Associates, and former director of consumer data products at Donnelley Marketing.
She spoke at the Direct Marketing Club of New York's May luncheon here at the Yale Club. It was sponsored by Montvale NJ -based ARGI.
The fastest growing age group within the mature market is Americans age 65 to 84, a group that will at least double in the next few years. Americans 85 and older as a group will grow 400 percent.
'These are very significant changes," Ms. Farley said, adding that the over-50 group is not as brand loyal as younger ones.
"They are more open to new brand experiences than their younger cohorts," Ms. Farley said. "They are willing to try new products and services that are positioned in such a way would intrigue them … they also have the experience and the money to buy - and to continue to buy - through product cycles."
Ms. Farley said that, contrary to popular perception, the 50-and-older group is online.
"Sixty percent own PCs; 70 percent have access to the Internet in some fashion; 90 percent of those who own PCs have actually shopped online; and 75 percent have actually bought online," Ms. Farley said. "The fastest growing Internet segment is Americans 65 yeas and older. So this is a tremendous opportunity for us as marketers to direct our integrated marketing programs at this very high-profile group of consumers."
She also said that consumers 50 and older have only 10 percent of advertising targeted at them, but they have 50 percent of discretionary spending.
"The mature market is a fast growing market, with increased longevity and eight more years of baby boomers waiting in the wings to join this group, this market will continue to grow," she said. "There is huge purchasing power, anticipating to be $750 billion in [the next] three years. This is a significant trend for all of us as marketers and one that we really have to capitalize on."
As for emerging minorities, Ms. Farley said that by 2050 whites would represent less than 50 percent of the population. Hispanics will almost double and represent 24 to 25 percent of the population; Blacks will grow at a rate of 72 percent and represent 15 percent of the population; and the number of Asians will at least double and represent 8 percent of the population.
Ms. Farley said that, according to the U.S. Census Bureau, key household composition changes over the past seven years include a growth of unmarried partners, comprised of both same sex and different sex parents, as well as an increase in the number of children moving back in with their parents along with their spouses and children.
"Today's American lifestyles are tremendously complex," Ms. Farley said. " Yes, there are families that are traditional, but there are also single-parent households, DINKs [dual-income-no-kid families], people choosing a single lifestyle and a whole variety of new partnerships."
Ms. Farley said it was important that marketers use demographic data, at the core of marketing programs, when targeting these groups.
But she added that demographic data was not enough.
"Demographic data is not longer sufficient enough to create proper profiles," she said. "We need lifestyle data, vertical lists with strong behavioral connections, segmentation tools … and customer analyses and, of course, database marketing.
"Only by using these tools judiciously," she said, "will we be able to help marketers understand today's consumers."