Back in the day identifying our consumers was an easy task. Every generation had its own transparent characteristics shaped by the social context that surrounded them at that time. Starting with the Baby Boomers moulded by their post-war optimism right through to the Millennials or as some know them as ‘Generation Y’ who grew up on the internet. After Y came Z which are only now defining their characteristics and at this moment, we see Generation Alpha born as the offspring of The Generation Z.
We have always relied on gender, work, social status and other characteristics to define groups and segregate them into consumer segmentation boxes. However, these days the forever progressing technological shift has proved this method of segmentation more and more irrelevant. Thanks to this shift, technology has enabled us to substantially improve our understanding of individual desires.
We are left with two options. One, to continue with our premediated expectation of individual consumer desires based on their generation or two, take a different view of generations and break away from the dinosaur method of segmentation.
A classic example of this ‘breaking away from the stereotypes’ comes from the very respected Danish politician, Mr. Bertel Haarder. Based on his generational status, a classic Baby Boomer who just so happens to be a huge fan of the Norwegian Teen T.V series, ‘SKAM.’ He even took to Facebook (not something we would expect from the characteristics of a Baby Boom Box) to express in delight of the beginning of the new series and claimed how the series ‘teaches young Danish people to understand Norwedgian in no time.’
Enter the Fluid Consumer. The reason we address this modern age as being made up with Fluid or liquid consumers is that it is clear that we can no longer rely on past methods of segmentation. Consumers are more adaptable, more open and more willing to construct their own identities based on innate desires rather than characteristics of what their consumers generation expects from them. Being more fluid and open minded will influence what and how people consume products. Fluid consumers lean towards a more temporary status based on the context of their products and their individual wants at certain points in time.
Thanks to the liquid consumers increase to access, permission, ability and desire, they are open to a whole new range of opportunities. The modern and liquid consumer has open access to global information thanks to the boost in technology. Customers across different generational and demographic boundaries are progressively familiar with the same brands. This joining of consumers is thanks to the breakdown of past expectations of consumer barriers thus creating more post-demographic consumption trends.
On the other hand, those societies that are not so moulded by consumer traditions are even more free to express personal consumer desires and therefore are more permitted to construct their own identity without the fear of being judged or ridiculed. This chosen identity allows the customer to experiment, breaking down the ‘one size fits all’ stigma hence allowing them the chance to buy products and services that are tailored to their individuality.
As we know, social status has previously been heavily linked to consumption. Who has the best car, the biggest house, the most designer clothes but recently we have seen a shift whereby, social status is more closely linked to ‘a better world and a better me;’ This development has also shifted the power balance between our generations. Nowadays, the competition for status is open for business dismissing the characteristics of age, income, gender or residence. We metaphorically relate the consumer market to a river whereby everything is constantly changing and everything becomes liquid.
Society today offers readily available ideas and such competent markets that the risk factor of trying something new is relatively low no matter of your age or residency so consequently, consumers are rebelling against the ‘norm’ of traditional demographic segmentation. In layman’s terms, this means that in the future it becomes less integral to aim to define the next generation’s characteristics. Getting to know consumers will soon only be based on their behavioural patterns and not just who they seem to be on paper. This method of defining consumer will be based on 3 fundamental aspects.
Consumer segmentation will soon be based on behaviour as opposed to demographics. When the consumer’s expectations exceed previous limitations, then companies will have to relate their highest denominator from each consumer’s experiences. According to research, the main reason why company’s segmentation processes don’t work is because they are still using traditional demographic segmentation. If companies want to thrive in this field, they need to take advantage of the advanced technological tools that are so accessible in this modern world.
By studying behavioural patterns, companies have the power to distinguish customers into categories based on their individual needs and desires and therefore proving it easier to predict behaviour and personalise needs and experiences. On top of this, companies can continue to monitor their consumer behaviour and be able to form a day to day real life image of their consumers evolving needs.
What we must bear in mind is in this forever evolving technological world, a retiree who is completely compatible with technology could have more similar consumer needs to a teenager who has grown up with smart phones and internet. This is just one example of how we can talk about consumer segment based on behaviour rather than demographic divisions. Companies are encouraged to steer away from traditional methods and jump on board with a more open-minded approach to consumer segmentation.
According to this approach, instead of basing analysis on what generation a person was born into, we instead focus on where a person is in his or her life. By doing this we focus on life phases that individuals naturally pass through. These phases are not merely as straight forward as they used to be when all was based on traditional and expectations of that particular generation. Today, life phases are instead related more to the choice of an individual over settlement. Consumers, as we have previously mentioned, have become more fluid and decisions are made by the individual and not by societal expectation.