Are you a digital adult or digital novice – Wells Fargo has the answer

Wells Fargo has been doing some research about digital literacy. Apparently we all fall into one of three groups.

Digital Adults - people who use advanced online tools for daily tasks, interaction and entertainment

Digital Novices - people with a general understanding of online tools who use them to manage basic tasks, but don’t interact with others online or manage complex tasks on the web

Digital Teens - who fall in between novices and adults?

In the UK we have 10,000,000 people who are not connected to the Internet. I guess they are Digital Babies?

The “Adult Group,” digitally speaking, is not twenty-somethings but thirty-somethings. While twenty-somethings led in the use of advanced online tools for entertainment, with such activities as watching television online and social networking, thirty-somethings are more likely to use advanced online photo and video technologies, career networking services, and financial management services.

A similar pattern emerges with banking and managing finances online.

The survey apparently shows that Youth is loosely correlated with digital adulthood and that digital sophistication generally declined with age.

This is all interesting stuff but it totally ignores the main thing that determines the type of Internet use – education. This applies to all ages.

I suspect this PR research is more to do with getting people to the Wells Fargo site, to find out their digital age, than to extending our understanding about the segmentation of Web use. Dick Stroud

Italy tops the list of Creators

Recently I wrote about the tool that Forrester provides to enable you to find out how many of their social media types exist by age, gender and country – this link gives a definition of the different types.

I have just come upon a link, from earlier in the year, that provides a nice graphic showing a European overview.

True to form, the Italians are big at being ‘Creators’. Dick Stroud

Pressures on the Sandwich Generation

I just received an e-mail promoting a new book about the issues facing the Sandwich Generation, when needing to provide or access care for their parents (Sustenance and Hope for Caregivers of Elderly Parents).

This is becoming a major concern for large numbers of people in their 50s and 60s so I would expect this will not be the last book published on the subject.

Just before reading the e-mail I was looking at a report on the BBC web site about a small up-turn in house sales in the UK. The theme of the report was that “Bank Mum and Dad” is responsible for funding a large number of the first time buyer sales.

This is what the estate agent (Realator) said

It's quite amazing, the number of buyers we get coming in with mum and dad in tow.

The majority of the people we are registering on our books are coming with the big deposits from their parents.

Many have been putting down large sums of money to finance the 20% or 25% deposits their children

Finally, when looking for a suitable cartoon to add to this blog I found the above that was published in The Hindu – one of India’s largest circulation newspapers. So it looks like this issue is of global proportions.

Marketers should understand that the pressures can only increase on the 50s and 60s age group who have to provide time, money and emotional energy for both their kids and parents. Remember the adage: “wherever there is a problem there is a marketing opportunity.” Dick Stroud

Don't Rely on Age-Based Categories to Market to Women

This short “Today’s Tip” in BusinessWeek is spot on. Using my language the writer is saying that marketers should consider lifestage and lifestyle as the primary factors that define behaviour rather than age. I call it age neutral marketing. Dick Stroud

Segment, segment and then segment some more

As if we needed any more information to support the need for companies to thoroughly segment the older market is the research from Barings showing the impact of the fall in house prices on their pension prospects.

Let's restate my usual caveat that research showing people need to save more money, coming from a company that provides saving services, has to be viewed with caution. Barings reckons that £29bn has been wiped from pension pots this year of those approaching retirement. This broke down by age:

25% of older people are aged between 55 and 64, and a 7% are aged 65-plus.

11% of those in the East Midlands are more like to rely on homes to fund retirement while Londoners are the least likely (5%).

Forget the absolute numbers. What the research shows is that the UK's fragmention, into a country of the wealthy and poor old people, will accelerate. Just make sure your company is targeting the winners. Dick Stroud

Don't generalise about the behaviour of Millennials - or any other age group

David Wolfe has an excellent blog about an article in Fast Company about Gen Y, Millennials, or whatever you want to call them.

The writer of article is a tad put out by the way his generation is summed up by a few simple behaviours. You know the sort thing; they have a three-second attention span, were weaned on emails, texts, and instant messages etc etc.

David makes a couple of good points. I will quote his blog:

For sure there are stylistic differences between boomers in their earlier years and today's Millennial. However; to a remarkable degree the substantive elements of Millennial’ attitudes and behaviour mirror the attitudes and behaviour of boomers in their youthful years.

Eschewing sweeping generalizations made about the attitudes and behaviour of Millennial in his Fast Company article the author has put marketers on notice that they invite disappointing results in their campaigns if they take much of what self-styled experts say on Millennials at face value.

It is good to see that it is not only the older age groups that get fed up having their behaviours distilled down to a handful of motherhood statements. Dick Stroud

Wealthy elderly turn backs on seaside havens

Richard Webber wrote the section of my book that dealt with geodemographics. He was the man behind the development of Experian’s Mosaic segmentation database. Want to know anything about geodemographics then ask Richard.

This Sunday he is quoted in an article in the Observer about the development of new segmentation categories for the older age groups.

For decades, many of Britain's coastal towns have been synonymous with retirement. But according to an analysis of demographic data, many of today's wealthier pensioners are turning their backs on traditional retirement destinations and moving into upmarket towns and cities in some of the UK's most sought-after inland locations - such as in the Cotswolds, and parts of Hampshire and Kent.

As a result, Experian has identified five new types of retiree.

Beachcombers
This group reflects the growing trend for the middle-class retired to select smaller communities, many on the coast or a river, rather than larger resorts. Popular destinations: Barnstaple, Newport (Isle of Wight), Carmarthen, Inverness, Kendal, Newton Abbot.

Balcony downsizers
Higher-status retired people in their 70s and 80s, who live in privately owned or leasehold apartments in purpose-built blocks of flats suitable for those too fragile to cope with the upkeep of houses and gardens. Popular destinations: Worthing, Boscombe, Edinburgh, Southend-on-Sea, Barnet, Kingston upon Thames.

Golden retirement
People with accumulated assets, who pick prestigious retirement communities. They lead busy social lives, drive and garden. Popular destinations: Exeter, Southampton, Poole, Chichester, Norwich, Canterbury and Ipswich.

Bungalow quietude
Retirees with modest pensions, living in older-style bungalows, often in less well-off areas unattractive to younger families. Popular destinations: Blackpool, Rhyl, Scarborough, Plymouth, Nottingham, Peterborough, Newcastle upon Tyne, Lincoln, Leicester.

Country-loving elders
People on comfortable incomes living in former farms or older-style properties in quiet villages and market towns. Popular destinations: Truro, King's Lynn, Hereford, Carlisle, Shrewsbury.

Interesting stuff. Dick Stroud

New Mosaic classifications

Experian has rebuilt and updated its consumer classification Mosaic UK with a range of additional data sources.

This is what Experian says about its changes for the 50-plus.

The new version of Mosaic improves understanding of older people by making a distinction between the increasingly active nature of early retirement years (with the commercial opportunities this presents) and the latter years requiring more health and social care.

It identifies a move away from the traditional south coast retirement towns with many more affluent retirees (dubbed County Loving Elders) moving inland to historical and cultural towns and others (Beachcombers) seeking exclusive seaside villages and expensive holiday destinations.

I want to get more details about these changes but navigating the Experian web site is like playing Level 99 on some devious Nintendo mind trainer. Maybe Experian thinks that it is providing a public service by making its web site as difficult as possible to use. Dick Stroud

The Bookends Generations

Marketers instinctively look for the unique characteristics of individual consumer groups/segments to be able to tailor an offering and the communications to resonate with their special needs/requirements.

Many of the questions I get asked about the 50-plus focus on how they differ from other age groups. When I say: “in many ways they have similar attitudes to other age groups” I can see the look of disappointment and then the suspicion that guy doesn’t know what he is talking about.

A few marketing and Internet gurus have made it their life work to research and (dare I say) emphasise the difference between Generation Y and their parents and grandparents. A lot of the arguments are built upon Gen Y's supposed instinctive understanding of ‘technology’ that has somehow become part of their DNA. Like all of these arguments it is based on a grain of truth – the question is: “how significant of these differences.” More importantly, what is the magnitude of the differences compared to other factors like race, wealth and education.

There are a couple of studies that conclude that the Boomers and Gen Y have a lot more in common than is generally believed.

The Bookend Generations published this week by the US-based Center for Work-Life Policy and is about the US.

The Reflexive Generation is a report from the London Business School's Centre for Women in Business and is about the UK.

The LBS study is free. The Bookend Generations is $40.

Once I have read them both I will write again on this subject in detail.

An article that summaries and merges the two sets of findings appeared in Friday's FT.

It is nice to know that there are few other people who also question the extent of the generational differences. Dick Stroud

Winners and opportunities in the recession

I was recently asked to write a short article for the Royal Mail’s Mail Media Centre (MMC) that appears on the web site that Redwood manages for the company.

MMC is a really useful site that provides a source of intelligence and innovation for the direct mail industry.

I thought that there was a tad too much bad news about so I would lighten things up by looking at those who have been ‘winners’ from the recession. Hope you enjoy it.

A slightly longer version of the article can be downloaded from my Web site. Dick Stroud

New online seminar about 50-plus marketing

My thanks to John Rae (CACI Ltd), Sarah Robson (Millennium), Stephen Croncota (Haggar Clothing), Janet Kiddle (Steel Magnolia), Gill Walker (Evergreen), Chuck Nyren (Consultant) and Arjan in’t Veld (Inthefield) for contributing to Henry Stewart's online seminar about the: “Latest thinking in marketing to the older consumer”.

What seems like a lifetime ago, Henry Stewart asked me to contribute and edit this series. The gestation period may have been long but the result has been worthwhile.

Sorry folks but this is not free content. You can get a feel of what it is all about by looking at the above link. My thanks to everybody who helped with the content and production of the seminar. Dick Stroud

Segmentation fit for the recession

It was the best of days it was the worst of days for it to be National Stress Down Day. The day when the Samaritans try to raise money to continue its excellent work.

Yesterday the UK froze. There was traffic chaos and what started the week as beautiful landscapes and a cheap way of practising your skiing techniques ended in being a pain in the rump.

National Stress Down Day also marked the news of a massive jump in the insolvency rate of UK companies and new forecasts of record falls in economic growth.

How the hell is Jo Public reacting to the wrath of the financial and meteorological gods?

One of the good things about yesterday was an article in the FT by John Quelch and Katherine Jocz (Keeping a keen eye on consumer behaviour) about the importance of understanding how customers are reacting to the new reality and how their attitudes and behaviours are changing.

It is the first bit of thinking I have seen about the permanent effects of the recession on the consumer psyche. I am sure it will not be the last.

This is a statement worth remembering.

What is certain is that the market segmentation scheme you were using to plan your marketing budget and programmes this time last year is obsolete. You need to listen to your customers and possibly develop a new segmentation approach.

The writers propose six recession segments that are definitely worth considering. Of course they are stereotypes but they are a starting point for you to think about your own customers.

Naysayers are frightened consumers who have stopped buying any discretionary purchases and are trimming their daily purchases.

Short termers are younger, urban consumers with few savings who have, therefore, lost little in the financial meltdown

Long termers are consumers who see the reduction in their retirement accounts as an unfortunate bump in the road. They are worried but not panicked.

Simplifiers are baby boomers who have lost a significant percentage of their savings, and, as a result, have become more risk averse and are reassessing their values. Some will conclude that they must postpone retirement to recover their net worth. Others will decide that they can make do with less, reduce their consumption and simplify their lives.

Sympathisers are savvy consumers who switched into cash ahead of the crash but who know others who did not. They could afford to buy a new car but they do not want to appear ostentatious. They are continuing to spend at near-normal levels but more discreetly.

Permabulls are relentlessly optimistic. Their “here today, gone tomorrow” attitude has them looking for opportunities to make up for lost ground and find the next million dollar idea or stock pick

Which one of these are you? How do you reckon you customers map onto these groupings? If you are marketing to the 50-plus you will find lots of them in the Long termers and Simplifiers categories. Dick Stroud

Different ways of achieving "life's purpose"

Thanks to Chuck Nyren for telling me about research from MetLife Mature Market Institute (MMI) that investigates the role that ‘purpose’ has in determining the lives of older people. The research was based on interviews with more than 1,000 Americans between the ages of 45 and 74. When you read the next article you might think the main 'purpose' is trying to find a job.

I am a sucker for new segmentation models. MMI deduces that older people’s attitude towards their life ‘purpose’ divides into five segments as follows.

Balanced Givers are the largest segments (33% of the sample) who tend to focus more on those activities which emphasise helping others, as well as doing things that matter to them personally. Some activities include helping to make things better for others and using their abilities to accomplish meaningful goals and activities for themselves.

Meaning-Minded is another large segment that focuses more time on activities such as being with friends and family, enjoying their surroundings, and enjoying personal interests, the core activities defining the Good Life, but also emphasizing spiritual involvement for their minds and souls.

Balanced Individualists tend to allocate more importance to activities that focus on personal interests. For example, taking care of their physical selves and enjoying personal interests. They feel that Meaning-related activities are still important, but less so than the Meaning-Minded and somewhat more so than Balanced Givers.

Financially Focused spend considerable attention and energy on activities like building income, improving their salaries, and increasing their net worth, with much less attention to activities enhancing meaning and purpose in themselves or in their communities.

Hyper-Individualists concentrate primarily on their own needs and activities in comparison to activities with family, their spiritual lives, or their communities.

The report gives a lot of detail about each of these segments. The difference in the attitudes between the groups, especially the Hyper-individualists and the Meaning –Minded, demonstrates the futility of treating older people as a homogenous whole.

The report also provides research about how ‘purpose’ differs by age. Nothing surprising in this analysis although I wonder what effect the recession will have on the responses to questions related to assets and income. Well done MMI, a useful contribution to our understanding of the older consumer. Dick Stroud

The Unretired.

This is not a very cheerful article from Business Week that describes the tranche of older people who retired and now find themselves suffering from the results of property and stock market asset deflation.

The proof offered about the scale of the problem are things like RetirementJobs.com, the largest career site for people over 50, saw traffic more than double, from 250,000 visitors in July to 600,000 in November. In April, a survey conducted by AARP found that 17% of responding retirees over 50 were considering or already going back to work. I wonder what that figure is today!

As I have said before, the people who have assets (the 50-plus) have been hit the hardest during Phase 1 of the recession (The ‘credit crunch’). At least most of this group had some assets, unlike most of their kids.

Phase 2 (the real recession) is affecting all ages. It is said that London is 3 meals away from anarchy, meaning that the food logistics relies on a constant flow of refilling of the supermarket shelves. The same applies to the majority of households (at least in the UK) who are 3 pay cheques away from financial hell.

I am afraid the Business Week story is going to be replayed time and time again but with younger and younger people being the focus.

So what is the marketing message in all of this? Be very, very targeted in the groups where you spend your diminishing marketing dollars/pounds/Euros. As the recession broadens to hit all ages and social groups you really need to think if you have identified the “recession proof” consumers in your customer database. Well have you? Dick Stroud

During recessionary times do you aim young or old?

Government employment statistics, published yesterday, suggest the answer is that both old and young are being badly hit by the recession that is only just beginning.

The figures showed a 53,000 increase in the number of 18 to 24-year-olds out of work, to 579,000, in the three months to September. This means that unemployment among the younger age group is increasing faster than for the general population - up by 12.8% for those out of work for up to six months.

More than half a million people under the age of 25 are not in education, employment or training. Forget the human tragedy of this; just think of their empty wallets!

But, there had been a 29.7% increase in the number of people over 50 unemployed for between six and 12 months. So oldies are also getting pushed out of the workforce.

So as a hotshot marketer - what do you do with this information? Simple. Ignore the numbers.
There will be nuggets of demographic gold, with protected wealth, in both age groups. You are going to have to be smarter at finding it.

Another interesting statistic from the research was about average earnings for the three month period until September 2008.

The group with highest increase in earnings was the public sector (Government workers) 3.9%. All other parts of the UK economy experienced average earnings remaining static or decreasing. Link this to the fact that public sector workers receive a pension that is unaffected by the financial maelstrom that is enveloping the rest of the population and you can see why they are a prime market segment to attack. Dick Stroud

New ways of segmenting the older market

I would like a pound/dollar for every new segment name I have heard for the 50-plus market. There are zillions of them. Most of them are dreamt up in the offices of a PR company to ensure their press release gains its 5 mins of fame in the media.

Let me introduce two new names. Public sector employee and private sector employee.

They are not very memorable but will increasingly become meaningful ways of segmenting older people, who live on a pension.

A bit like sub-prime lending, credit card debt, housing bubbles, energy depletion and the other litany of problems that are creating such havoc at the moment, the costs of public sector pensions is a known disaster waiting to happen. None of our current nightmares are new, the facts have been known for ages but they festered on until turning malignant.

The disparity of the pensions of a public sector employee and one from the private sector is huge. That is bad enough, but to add insult to injury it is the private sector employee who is the one picking up the tab and having to work longer to ensure their public sector brother and sisters receive their bloated pensions.

Read my lips, this is a UK problem that will be as big as the credit crunch, housing bubble and any other disaster you care to mention.

Around four out of five private sector final salary schemes are closed to new members as companies consider them too expensive in an era of rising life expectancies. But around 5 million public sector workers still enjoy final salary pensions, many of them funded from general taxation.

In 2007/08 the average public sector worker accrued approximately £5,800 worth of pension benefits. Meanwhile the average earner in a private sector "defined contribution" scheme had a total annual pension contribution of £2,650.

OK, enough of the doom and gloom stuff. There is a positive side to this. In the middle to lower income range of employees we will see the correlation between their employment (public or private) increasingly determining their post retirement spending power.

Any smart marketer should start looking for data sources of ex-public sector employees. Dick Stroud

The South African 40+ market

Research undertaken by the Unilever Institute of Strategic Marketing and Synovate into older South Africans comes to some interesting but not surprising results. They are the same conclusions as in other parts of the planet.

It is a market crying out for marketers to target them with quality, age appropriate (not fuddy-duddy) products and services.

The over-40s feel ignored by marketers and:
• Overlooked by packaging and store designers
• Misrepresented or ignored by advertisers and the media.
• Invisible in shops and banks
• Disregarded by fashion designers

South African Prime Timers (another daft name) hold 30% of all university degrees; represents 30% of people who invest on the stock exchange; and owns 30% of cars on the road. So if you are marketing in South Africa you have been warned. Do remember that South Africa is a 'young' country with a very different demographic profile to Europe.

More interesting than the research is an insight into the Living Standards Measure (LSM) that is used in the country to categorise households. It is worth reading a description . Dick Stroud

Grumpy old Baby Boomers - official

Today is a good day. Today I know I am not alone. Today I can have a good moan in the safe knowledge that it is all a result of my birth year not an abundance of the misery hormone.

Pew Social & Demographic Trends Project has just published a report that finds US baby boomers are a bunch of miserable old sods. To be honest it doesn’t say it that directly but that is the implication.

Why should this be?

One explanation is that it results from there being so many of them. I guess it is a bit like the way rats get aggressive when you crowd them together.

Have a read of the report and then look at this article from the Washington Post. Mary Furlong was the unlucky one who attempted to explain the results to the reporter. Mary thought it was all to do with the “sandwich generation” effect (i.e. simultaneously dealing with kids and parents). The reporter wasn’t buying that one and came with some research showing boomers have always been miseries, even in their youth.

We all know that any generation, defined by the age range 43 – 62, is next to useless. For part of the research Pew split the boomers into two groups (43 – 52 and 53 – 62) and found that the older group were the real pain in the butts. The younger group were much more like their kids.

So what is it about the 53-62 year olds that makes them miserable? Before jumping to conclusions have a look at the research and you will find the difference between the groups is relatively small. Also, the total sample size, for all the ages was only 2,400.
My bet is that you will find a massive difference in the results by socio-economic group. It would be more interesting (at least to me) to see the similarities/differences across the age groups by lifestyle segment.

So what am I really saying? Any analysis, or press reporting, that tries to derive the “reason why conclusions”, about the mindset of 76 million people, is going to dish out some simplistic generalisations. The report is good fun to read and to speculate about but not much tactical use for marketers. Dick Stroud

Ethnic minority marketing

For a long time I have been interested in extending the theory of marketing to older people by adding new segmentation factors like race and sexuality.

Last evening the BBC had a radio programme about the issues of providing care services for older Asian people. This gives an insight into the need to understand the requirements of older people that transcends their chronological age.

The programme could do without so much emphasis on the issues of multiculturalism but it is still well worth a listen. I am not sure how long it will remain on the BBC web site so if you are going to listen I would do it soon rather than later. Dick Stroud

Making a living out of inventing a generation

Let me declare an interest in this blog post – I am jealous.

A couple of years back I gave birth to a new generation, metaphorically speaking, called the Charmed Generation. It has done OK, getting lots of mentions in the marketing press and been adopted by some UK companies, but it has exactly taken the world by storm.

On the other hand, Jonathan Pontell has launched his generation (Generation Jones) into a higher trajectory. I noticed he has emerged again, speaking at the LiveWire: The Summit in San Francisco in June. This is the event when the great and good of the baby boomer world get together.

Generation Jones, are Americans born between 1954 and 1965 (i.e. the tail end of the boomer generation).

As readers of this blog will know, I have big issues with all of this generational behavioural stuff and extracting a subdivision of boomers seems to me like trying to count the number of angels on a pin head.

Pricing the value of a generation's name raises some interesting questions. For instance, I wonder how much "baby boomer" would be worth? Of course the nice thing about valuing generational names is totally separate from their value in improving marketing efficiency. Dick Stroud

Consumer segmentation and social media?

This article in AdAge (US) gives a summary description of the social networking behaviour of some of the consumer groups used by Simmons Research (part of Experian). It is the first time that I have seen any attempt to overlay social networking behaviour onto lifestyle groups.

I particularly liked the definition of the “Smart Green” group.

They prefer to buy products in recycled packages and eschew products that pollute. They are average users of social networking, blogging and podcasting but slightly above average in message boards. They are older (50-plus) and are most likely to go online for health or financial information. And in the spirit of their eco-friendly attitude toward trees, they're 23% more likely to send electronic greeting cards.

Know anybody like that? Dick Stroud

Know your U-Boomers from your Uni-Bombers

A couple of consultants at McKinsey, as reported in Forbes, have come with the term U-Boomers.

The U's are the largest segment of the baby boomer generation, sandwiched between roughly 10 million well-to-do households with high hopes for a comfortable retirement and the financial resources to pay for it, and 11 million disadvantaged households that are deeply pessimistic about the future.

They are supposed to have share all the optimism and expectations of their wealthier counterparts but don’t have the bank accounts to live the high-life. As the US (and most of Europe’s) economies head south it is likely that a tranche of the U’s will be joining their disadvantaged and pessimistic compatriots.

McKinsey thinks the Us are a marketing opportunity. As Class 1 Boomers turn left at the door of the 747 their U-Boomer friends turn right. Answer – make the right of planes longer and shorten the left.

I am not sure how marketers will deal with these financially constrained Boomers but I am sure they will find a way. Dick Stroud

The Generation Y in us all

"The 21st-century consumer has all the characteristics of generation Y - these characteristics are evident in almost everyone". So saith Mark McCrindle in an article in today’s Sydney Morning Herald.

He believes that the prevailing mind-set in the future is that of generation Y. That’s a bold statement, especially since that means it applies to 60% of the Australia’s population.I reckon that he has a point. Dick Stroud

Paying back debt into retirement

We all instinctively know that it is daft talking about a ‘generation’, since any large group of people fragments into zillions of sub groups. If we want to justify an argument we can talk abut the 50-plus as a bunch of property rich people set on enjoying their retirement consuming their kid’s inheritance.

You then encounter the figures that were published this week by Scottish Widows in their 2007 UK Pensions Report.

Grandparents in debt to tune of £57 billion
1 in 5 retired homeowners (1.1 million) still have a mortgage
Average outstanding mortgage debt is £38,000
1 in 3 have carried over credit card or personal loan debt for the last 3 months
Average outstanding non mortgage debt is £5,900
1 in 12 retirees have financially dependent children

The study also shows that many of those aged 50 to 59 are a long way from owning their own home. 42% still have a mortgage with an average debt of £54,300.

So there you are. Not a very rosy picture for a large sway of the UK’s 50/60-plus.

So are your customers in the this group of the Charmed Generation, with lots of dosh? I hope you know.

A word about Scottish Widows. How encouraging to encounter a company that ensures it has a press release on its Web site when the news is breaking. This report was featured on the BBC news. Secondly, to encounter a PR department that responds to e-mails within 30 minutes (even at 8.00 in the morning). Well done. Dick Stroud

Not enough babies

This is the cover from this month’s Economist. Nice creative.

Here are few snippets from the main article. Sorry it is a subscription only magazine (well worth purchasing this copy or buying the audio download from The Economist web site.

Four out of nine people already live in countries in which the fertility rate has dipped below the replacement rate. Last year the United Nations said it thought the world's average fertility would fall below replacement by 2025.

Adjusting to population decline poses problems, which three areas of the world—central and Eastern Europe, from Germany to Russia; the northern Mediterranean; and parts of East Asia, including Japan and South Korea—are already facing.

State pensions systems face difficulties now, when there are four people of working age to each retired person. By 2030, Japan and Italy will have only two per retiree; by 2050, the ratio will be three to two.

An ageing, shrinking population poses problems in other, surprising ways. The Russian army has had to tighten up conscription because there are not enough young men around. In Japan, rural areas have borne the brunt of population decline, which is so bad that one village wants to give up and turn itself into an industrial-waste dump.

And so the article goes on with more and more jaw dropping facts and figures.

Most marketers think that demographics is boring (and they might have a point) but the implications of population change are absolutely fundamental to understanding how markets work. Dick Stroud

The link between market segmentation and Web analytics

This post is not limited to the 50-plus market but it sure will have a lot of applications to this age group.

comScore’s Segment Metrix is tool that links web analytics to consumer segmentation.

It provides marketers with the ability to track, analyze and report Internet activity by their most important consumer groups. In the fullness of time it will (so comScore claims) integrate behaviourally defined segments, geo-demographic segments, and proprietary, client defined segments with the comScore online panel.

The first segmentation model that has been released (and which is probably the easiest to do) allows marketers to analyze online activity by heavy, medium and light users of the Internet and of any category of sites reported by comScore.

The full details of the model are explained in this press release.

comScore uses the Travel Industry to make the point about the importance of understanding the segmentation of online traffic. It is a great example.

One might assume that ‘heavy’ travel category visitors are so-called “road warriors,” or frequent business travellers. However, when the behaviour of this group on non-travel sites is studied it reveals they are also heavy users of shipping (FedEx, UPS and USPS), office supplies (Staples and Office Depot), and entertainment planning (Ticketmaster and Citysearch) sites. This implies this group is most likely administrative assistants to the “road warriors” than the “road warriors” themselves.

You might say that this is common sense but it I doubt if many companies have thought through the implications of this fact. It will be interesting to know when comScore launch a segmentation model that helps understand the 50-plus’s online behaviour. Dick Stroud

Beware stereotyping

There is an article in the Telegraph about market segmentation from the viewpoint of a professor of psychology. It makes some good points and also illustrates a mega danger - stereotyping.

The author asks: why not segment by political values or religion or sexual orientation or any other variable that comes to mind. Good questions.

The answer is that you should BUT make sure these factors really influence consumer behaviour AND influence it in a way that is established by research not hunch.
I suspect (hope) that he was joking when he differentiated Old vs New Labour on the basis of their culinary tastes: “Remember, Old Labour like mushy peas, while New Labour eat guacamole”.

Unfortunately, too many marketers really think this way and allow their personal prejudices and opinions to drive their vision of consumers. Dick Stroud

Marketing Week article about the Charmed Generation

My latest article about the Charmed Generation is published in this week’s Marketing Week magazine. You can read a more detailed explanation of this generation in this article. Dick Stroud