From Melting Pot to Salad Bowl: Selling to a Changing Consumer Base

Kelly McDonaldKelly McDonald, who currently has a book titled “Crafting the Consumer Experience for People Not Like You”, listed as number two on the business best-seller list, wowed Glass Expo Northeast™ 2013 attendees yesterday with her keynote presentation “Understanding the Consumer of the Future.” McDonald noted five major trends the 2010 U.S Census revealed about the changing consumer demographics of which businesses need to know.

“You can’t serve your community if you don’t know who your community is or what it looks like,” said McDonald. “We’re not a melting pot and we’re never going to be a melting pot again. We’re now a salad bowl.

“The U.S. Census is a gift. There’s a lot of information there to help you understand your business and your community, as well as give you a snapshot of where we’re going,” she added.

Diversity, she said, is one of the most important trends businesses need to recognize.

The probability that two people chose at random would be of a different race and ethnicity on a 0-100 scale. In 1980 that probability was 34 percent; in 2009 it was 52 percent. “Today it is statistically more likely that two people selected at random are going to be of two different races and that’s huge,” said McDonald.

“Across every single major market in the U.S. the majority of the child population is non-white,” she continued, further noting that by 2041, white would be the minority race.

More of these minorities, in addition to youths, are making the shift from rural to urban regions.

“Three out of four people in the U.S. live in urban counties,” said McDonald. “In 2000, 17.3 percent lived in rural counties. By 2010, that dropped to 16.4 percent.”

The rural Midwest lost the most as agricultural jobs become more mechanized. Overall, though, the rural white population is declining everywhere; the rural black and Hispanic populations are increasing.

“Historically, most of us when we’ve thought about diversity, we’ve thought about that being in urban areas. Even our rural areas are more diverse than we ever realized,” she said.

This migration to urban areas is a major movement affecting rural areas as youths flock to cities and leave their rural hometowns with an aging population. McDonald referred to the trend as “bright flight,” or the relocation of the educated youths to metro areas.

“In these small communities, they’re losing their talent for the future … At some point it gets hard to sustain a town,” she said.

Another major trend is the movement of minorities and non-traditional families to suburban areas.

“The suburbs across the country still happen to be majority white, however, what has happened for the first time is a majority of racial and ethnic groups in large metro areas live outside the city,” McDonald said.

She also noted that people living alone are the fastest-growing group in the suburbs with the second fastest-growing group being non-married couples and families.

Non-traditional families also reflect the fifth most important cultural movement, which is a shift to marrying later in life for many members of Generation Y.

“Married 25-34 year olds has dropped from 55 percent to 45 percent in 2010,” McDonald said. “That is the lowest level of that age group that is married since 1862.”

Factors for this trend include a youth population which prefers to focus on personal goals such as college and career, as well as dealing with a much higher age of maturation and a sense of not being “economically ready.”

Just what does this mean for businesses? For starters, companies can expect to see more minorities and women as customers, which shifts the basic sales models. For instance, according to McDonald, women feel more in control when they can see and weigh all potential buying options, which is why a woman will try on every shirt she thinks she may want before buying. Men, on the other hand, become overwhelmed by a mass of choices and prefer to have a narrow selection; three tends to be the magic number to aid in decision making.

When selling to women, companies should lay out all options. It may appear time-consuming but will ultimately please the female consumer who is far more likely to express her satisfaction, or much more audibly her dissatisfaction, with customer service. Men, however, would be better served viewing the top three most popular packages or three personalized options, fitting the  good, better, best model.

As minorities enter the market, having an employee who is bilingual, in addition to possessing the excellent customer service and trade experience necessary, is invaluable. People want to interact with people like themselves; offer a sales rep who seems like them and word of mouth will bring a diverse body of consumers over time.

Other changes business owners need to note are a shift toward Generation Y members desiring a more progressive workplace including flexible schedules and telecommuting options, as well as consumers seeking eco-conscious, minority-friendly businesses. This generation is driven by the fear of missing out, or the FOMO phenomenon, which is so strong Amtrak credits the youth need for frequent connectivity to saving the nearly extinct rail line; youths preferred to take the train because they didn’t have to turn off their phones and were also offered Wi-Fi.

McDonald closed by noting that consumers are changing and, therefore, business and selling strategies need to change. Companies must keep up with the ever-changing cultural movements in the no-longer-homogenized American society.

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