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Demographic Trends for Retail

There are big picture views of demographics to consider when you are defining your target audience or where your next product launch will be targeted. Here are 8 demographic considerations every manufacturer that displays their products in a consumer retail setting.

  1. Tie the online presence to an in store experience: Retail must start with engaging with customers online in the research mode and culminate in an in store experience they can’t get online. Engage with people, demonstrations, sight, smell, touch, and hearing.

  2. Increase in the luxury class, with a shrinking middle class. Statistics bear out that middle class in shrinking and luxury class is growing. The middle classes share of the nation’s aggregate income has declined precipitously, from 62% in 1970 to 43% in 2014. The luxury class are taking the lion share amount of the nation’s income, rising from 29% in 1970 to 49% in 2014, and accumulating a greater share of wealth. This amounts to over seven times that of middle-class households in 2013, according to Pew.

  3. Family households are becoming more multigenerational: Twenty percent of Americans live in a home with at least two generations under the same roof – an all-time high of 60.6 million people, with about 40% of Millennials (ages 18 to 34) who live with their parents or other family members, the biggest percentage since 1940.

  4. Small population growth means smaller numbers of people buying: The U.S. population rose only 0.7% in recent years (2016 & 2017). Factors impacting the slowdown in the population growth rate are a lower birth rate, a lower death rate and a 4% reduction in immigration.

  5. People are staying put: People are just not moving around the country like they used to and this is impacting retail. In the 1960s roughly 20% of Americans were moving to other geographic locations, today only about 10% are expected to move in a year, a number not seen since 1948, as reported by the U.S. Census.

  6. More young adults, fewer young kids: Having kids has been put on the back burner by Millennials, delaying the age of their first child to 28, revealing the lowest birth rate in the U.S. since 1987.

  7. Solo homes: Never before in history have we seen this – there are more single adults than married Americans: some 124.6 million single adults. In contrast, in 1960 over 70% of people in the U.S. were married. You can draw direct conclusion from this for retailers, because the amount of money households have to spend will drop, since it often takes two incomes to propel a household into the high-income ranks.

  8. Declines in who is working: Women’s presence in the workplace actually peaked in 2000 and has been on the decline since. The Labor Department predicts, women’s labor force participation will be lower than in 1990.

These are some trends to consider when investigating where to target next, what product to launch and when. We need to adapt our approach to match our ever changing customers and these are some macro trends to consider and keep you ahead of the curve and your competition.