How-To

Understanding Demographics

The recipe for success is simple: stores must be stocked with goods that appeal to customers. Manufacturers and Retailers must therefore anticipate how customers’ needs and desires may change over time. To understand the size and makeup of current or future markets they would be well advised to study demographic trends. To predict which goods consumers are most likely to buy they should follow patterns in consumer attitudes and priorities.

Consider the size and composition of a target market to determine potential sales. Market studies can indicate how many potential shoppers there are at any given time in a specific area and what expenditures they are likely to make. Other things being equal, a retailer serving an area with a growing population would be expected to show above average sales increases. Because Manufacturers and Retailers often target a specific age group, they must pay close attention to the age distribution and priorities of potential customers in their markets. Each generation generally has its own perspective and influences, and its own pattern of wants and needs.

There are several ways of finding demographic trends for any particular area.

FreeDemographics.com. is a good choice for free market information, with access to current and historic U.S. Census data. They provide market analyses in an easy-to-use web environment.

Of course, the actual Census Bureau would be a good choice to look up census data.