Demographics Are Out; Purchase Data Is In

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Jun 07, 2004
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Demographics Are Out; Purchase Data Is In

By John Hennessy

When building and fine-tuning loyalty marketing initiatives, consumer demographics should take a back seat to actual shopper purchase data.

That’s the conclusion that can be drawn from a shopper analysis recently conducted by BIGresearch. The analysis reviewed shopping and media usage habits of various ethnic groups. When comparing the shopping behaviors of over 12,000 White, Black and Hispanic respondents, the research found more similarities than differences.

“Marketers must first be aware of behavior, tastes and preferences of various consumer groups then how cultural differences show themselves. Marketers who automatically place consumers in silos run the risk of ‘minoritizing’ certain ethnic groups and may miss the continuous changes in tastes that are occurring,” says Joe Pillotta, Ph.D., CP of Research at BIGresearch.

Pillotta further states, “When marketers address Blacks or Hispanics strictly by demographics or socio-economic indicators, they automatically view them as being different from the norm. However, actual shopping behaviors are better indicators because they show that similarities and differences are two sides of the same coin, not opposites.”

Moderator’s Comment: What are some ways to expand use of purchase data to increase message relevance and impact?

Shoppers are exposed to lots of influences, regardless of ethnicity. These influences lead to tastes that are diverse and constantly changing. Targeted
Loyalty Marketing programs based on demographic data are less and less likely to result in messages that connect with shoppers or deliver the business benefits you seek.

Collecting shopper data on the web, surveys and partnering with retailers who collect shopper purchase data are ways to go beyond demographics and get closer
to individual shopper preferences. Individual shopper purchase data is the strongest indicator of ever-changing shopper preferences.

What barriers prevent more widespread use of shopper purchase data? Is the benefit of using shopper purchase data offset by the cost to employ it, or are
old habits just slow to die? If the barrier is the cost, what are the largest of those costs?

John Hennessy – Moderator

Moderator’s Note: How we doing?

I’m putting on my big elephant ears and asking you for feedback on how this Loyalty Marketing In-Depth section is serving you. What do you
like? What’s not so great? What do wish would be included here but isn’t? How can I make this a better Loyalty Marketing resource for you? Are the types of articles selected
helpful? Is the commentary helpful?

The online comments each week are both encouraging and spirited. I thank all the contributors for their time and thoughtful participation.
But I know there are more of you out there than those doing the posting.

If you have opinions but don’t want to see your name in print, you can contribute anonymously using the big blue button below, or just send
us an email with your comments to info@retailwire.com using the Subject line, “Loyalty Marketing.” You can also send in article
suggestions, topics to cover, research you believe will benefit members of the community, or people doing great work with whom I should speak.

Thanks for your support to date. Keep it coming! I will continue to work with you to make this a valuable resource for everyone interested
in Loyalty Marketing.
John Hennessy

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1 Comment on "Demographics Are Out; Purchase Data Is In"


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Michael Aarons
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Michael Aarons
16 years 5 months ago

Demographics, when used out of context, provide a narrow and limiting snapshot for any segment–especially ethnic groups. However, when utilized in tandem with qualitative research and cultural analytics, demographics provide a consistent a structured means of categorized and quantifying various sub-segments.

Purchase data metrics clearly have a value, but when used at the exclusion of the underlying behavioral criteria, it’s like basing the potential size of an iceberg strictly by viewing the tip that is visible above the water line. It’s one thing to profile user groups based on purchase habits. It’s quite another to profile those same groups on those more nebulous criteria, e.g.: multi-generational households; cultural value systems; primary language preferred at home; in-language and in-culture media consumption; country of origin and length of U.S. residence; acculturation levels by generation; etc.

Using only demographics, or purchase habit data, can be very helpful in unlocking directional trends, but a deeper understanding of true cultural distinctions and emotional motivators is a much more effective means of unlocking the path to the consumer’s heart.

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