Understanding consumers are essential for retailers; the better they understand them, the better services they can provide. Knowing what products and services they like can make retailers job a lot easier. Moreover, if the retailer knows why the consumer prefers specific products, then his job will be even more comfortable.

Utilizing Demographics

Retailers have to know as much as they can about their customers, and one of the ways they can make this easier is to use demographics. Demographics measure and organize individual “labels” and store them in groups. For instance, ethnicity, gender, education, etc.

These are the things you can be saved in one data catalog, and later be analyzed to get better understand the customer’s needs. Here three examples of how a retailer can utilize demographics:


Sociologists came up with a way of classifying a group of people with similar age and traits. Thus you hear about Generations X, Y, Z, Baby Boomers, and so forth. Since individuals in these groups have comparable ways of “looking at the world,” they also enjoy doing similar things and purchasing similar goods.

Millenials are changing the way retailers operate. For instance, they like shopping and ordering items online. So, today’s retailers should have a functional website or an app if they want to attract Millennial consumers.


If the population of the specific ethnic group is increasing will affect the economy. For instance, if the population of people who are of Asian descent is on the rise, the agricultural industry will probably focus on producing the food that people of Japanese or Chinese descent enjoy.

Retailers should also be aware of the holidays and celebration days their consumer’s celebrate, what kind of meals they prepare and what ingredients will they use to make those meals.


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Understanding income is also an essential factor. Many successful companies offer products at the right location with the correct price tag. If most of the consumers have limited income, then the goods and the price of those goods should be aligned with their needs and possibilities.

Similarly, if the consumers are more wealthy than the products should be of higher quality and presented in a high-quality manner. Listening and focusing on consumers needs can significantly affect the retailer’s success.

Utilizing Psychographics

Demographics are a good way of evaluating the consumers but aren’t the only way. Furthermore, demographics should not be understood literally. Just because of someone belongs to a specific demographic category, that does not mean they will have all the traits of that category.

Personal opinion, experience, individualistic views are the factors that should also be considered when determining the consumer’s needs. Psychographics are already playing a significant role in retail business and will play an even more prominent role in the future. Some of the critical issues with psychographics are:

  1. Retailers must realize their consumers are no longer customers, but clients who have specific needs and desires they want to fulfill
  2. Retailers should focus more on the experience they provide because positive shopping experience will remain in clients memory. Such client will also leave positive feedback, sharing his experience with friends, etc.
  3. Retailers should integrate every particular strategy (advertising, customer service, digital interface) into one ecosystem


Both demographics and psychographics require communication with the customer (client). This can be done directly or via Internet, putting the focus on the Internet. Social media is also the field every retailer should utilize since the younger generations use in on a daily basis.

It is needless to say that communication strategy should be evaluated in some way. Consumers response should be stored and analyzed, and this new data again used for future strategies.

There is an excellent potential for retailers, especially for those who already adopted or are ready to adapt to the new technologies. However, those who remain blind to the changes that are occurring around them will be swept away.