How Demographics is Changing the Way We Do Business
For nearly two decades, David K. Foot intrigued us with his application of demographics to understand the past and predict the future, starting with his best selling book Boom, Bust & Echo.
Throughout this year, Statistics Canada has been releasing data from the 2011 Census. Have you leveraged this bounty of demographic insights to strengthen your strategic thinking?
Here are three implications from the 2011 Census to consider when creating your strategy for growth.
1.What drove growth in the past, won’t necessarily work in the future
Over the next few years, ROI from adding grocery square footage will experience a decline.
From 2012-2015, BMO Capital Markets reports that grocery square footage is projected to grow at a rate that is more than double the historical growth rate of the Canadian population from 2006-2011.
More intense competition resulting in higher inventory levels and price competition is neither a profitable or sustainable scenario for the value chain.
A distinct point-of-difference in a crowded marketplace has never been more critical to driving sustainable growth for your business.
2. Your priority customer target may be declining in importance
If you consider families with kids to be your priority customer target, you should reassess your sources of growth as the structure of Canadian households is undergoing a significant shift.
A few recent census trends to consider:
In the 2011 Census, for the first time one-person households outnumbered couple households with children (under the age of 24).
Distribution of households by size
Source: Statistics Canada. 2012. Visual Census. 2011 Census. Ottawa. Released September 19, 2012.
In the 2006 Census, for the first time couple households without children exceeded couple households with children.
Percentage of households containing a couple with children or without children
Source: Statistics Canada. 2012. Visual Census. 2011 Census. Ottawa. Released September 19, 2012.
A longer term trend that continued in the 2011 Census is the diminishing dominance of the traditional married couple.
This is a result of the increase in same sex couples and lone parent families.
Additionally, growth of male-led lone parent families outpaced female-led lone parent families by a factor of 2.5x, highlighting the emergence of men as the principal grocery shopper.
Distribution of census families
Source: Statistics Canada. 2012. Visual Census. 2011 Census. Ottawa. Released September 19, 2012.
With the changing mix of household sizes and family composition, there is a clear need to reassess your priority customer target for your future sources of growth.
3. Consumer needs are undergoing fundamental changes
Anticipated changes in human life-stages can sometimes lead to future changes in human needs.
This ultimately motivates consumers to reappraise their brand choices.
For example, more people (ages 55-64) than ever before are about to leave the workforce.
Will you be able to retain their loyalty as they enter a new life-stage, or attract new users when they are seeking new products and services to satisfy their changing needs?
Understand the evolving needs of your target customer, which will enable you to see “where the puck is going” and re-position your business for long-term growth.
By incorporating these three implications from the 2011 Census into your strategic planning process, and understanding the changing needs of your target customer, you can create a clear and sustainable strategy for success … at least until the next census in 2016.