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| Demographics |

DEMOGRAPHICS IS DESTINY Here are four trends that will determine retailers’ future. By Pam Danziger

Pam Danziger, author and luxury market expert, interviews Peter Francese, founder of American Demographics magazine.

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verybody in retail knows that their success depends on understanding the customer, and understanding the customer starts with understanding their demographics. Demographics is defined as statistical data describing a population or groups within it. As a result, demographic trends shape the future of the consumer market. Because those trends are linear and predictable, retailers can see the future by simply tapping into them and adjusting their strategies accordingly. But with businesses enthralled by big data, demographics looks old fashioned and irrelevant. But guess what? Demographics is the biggest data of all. For retailers, demographics was, and still is, destiny. Over my 40 odd years in research, I have long held the value of demographic insights, and credit Peter Francese with schooling me on their importance. He founded American Demographics magazine in 1979; it was acquired by Crain Communications in 2004 and folded into Advertising Age. Francese and I sat down to have a farranging discussion about demographic trends, starting with how profoundly illiterate most retailers are about them.

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“Most people think demographics is just plain boring,” said Francese. “They want something sexy, but when I talk demographics to business people, you can almost hear them snoring.” One retailer that has been listening is Walmart. “Walmart has paid very close attention to demographics. I can tell you that from personal experience,” he said. But many other retailers have been caught unawares, which is the underlying cause of what has been called the retail apocalypse. The unexciting, yet fundamental demographic trends changing the retail market in America include declining fertility rates, shifting

age and income distributions, and how these (factors) have impacted the American family structure. For too many retailers these shifts have silently crept up on them. Francese traces the root of the problem to the age of most C-suite executives. “They are in their 60s and graduated from college 30 or more years ago. The culture was totally different then,” he says. “It is hard to pull that image out of their minds and replace it with something that is 2020.” But he adds that they are under tremendous pressures to get better results year after year. Clearly, demographic insights would help.

Birth Rates Per 1,000 Women 122.7

75.8 60.3

1936

1957

2017

Profile for Hearth & Home

Hearth & Home Magazine – 2019 July Issue  

The voice of the Hearth, Barbecue, and Patio industries. Hearth & Home is a trade journal serving the hearth, barbecue and patio furnishings...

Hearth & Home Magazine – 2019 July Issue  

The voice of the Hearth, Barbecue, and Patio industries. Hearth & Home is a trade journal serving the hearth, barbecue and patio furnishings...