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Big changes in shopper demographics on the horizon

Thursday, August 20th, 2009

The Nielsen Company projects that the face of the CPG marketplace will change considerably over the next 10+ years with massive shifts in demographics and economics redefining growth and decline.America in 2020 will have an aging population, an increase of lower-income consumers and fewer households with children overall. And, the majority of households with children are expected to be multicultural by 2025. Based on these demographic shifts, Nielsen projects top CPG growth categories in 2020 to be ethnic H&B, medications and remedies, health aids, vitamins and cooking essentials. Biggest category declines are expected in toys, sporting goods, breakfast foods, baby care products and pet products.

What does this mean for CPG manufacturers? Doug Anderson, SVP, Global Research and Development, The Nielsen Company says, “It will be absolutely critical for CPG companies to adapt in order to gain the attention and brand loyalty of the aging Baby Boomers, multicultural families and lower-income consumers of the future. Those who keep doing what they’re doing will be left behind.”

This all raises some serious questions for the ad industry. As the population ages, declines in real income and becomes more diverse, much of the way we tend to think about our profession seems irrelevant. Our focus on youth, conspicuous consumption and the obsession with “cool” – will these ideas be as relevant in a new American marketplace? It’s not that we don’t know how to sell to Boomers, low-income or multicultural families. It’s that we often see them as a secondary consideration, an audience that will come along for the ride.

In terms of the retail environment, these trends will probably have an even bigger impact. It could mean increased fragmentation as many smaller retailers emerge to capitalize on under-served groups. Perhaps smarter shopper marketing with an emphasis on flexibility will be key. What if brands were to provide retailers with the capability to quickly and easily customize their in-store efforts to specific targets? This would allow you to switch messaging on the fly, giving each retailer a nearly custom promotion. While unfeasible today, the coming demographic changes to our culture may make this kind of dynamic marketing a necessity.

Contributed by Amanda Parks

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