What are demographics?

Demographic characteristics describe your target market on an individual level. You can use these attributes to characterise each individual without considering personality traits. Demographic factors such as age, income and level of education provide insights about the consumer behaviour of your target market. You can also use it within your marketing and inventory management functions.

Collected as statistical data, you can use demographic information to make strategic decisions. These traits describe the product preferences and purchasing patterns of your shoppers and are useful if your business lacks a large amount of market-related data. You can use this information to target these market segments through demographic clustering to maximise your return on investment and business profits.

As for how to access this information, you can do that through surveys, census data or through loyalty data. It is important to collect as much information as possible to understand your customers and develop a competitive advantage.

Customer segmentation

You can use demographic clustering to segment your customers into profiled groups. You can describe each cluster according to demographic variables as well as their purchasing patterns, basket composition, and overall consumer behaviour.

You can use this information to create a targeted range of products and shopping experience to increase the profits of your business.

Marketing strategies will also be more effective due to the in-depth understanding of the target market and their reaction to particular types of advertising media.

Improved understanding of customer needs

Demographic clustering will help you to understand the needs and wants of your customers. This will help you to identify gaps in the market and how to modify your product offering to better satisfy your shoppers.

This benefit links up with new product development as you can prioritise new development efforts based on the needs of your clusters and create products that have a higher market success rate.

https://www.dotactiv.com/blog/how-to-use-demographic-clustering