Demographic Assumptions Can Lead to Missed Sales Opportunities

Sometimes we need to reassess our perspective, and thus our assumptions. Over time, retail teams start to make assumptions about demographic groups — who prefers what scent, which consumer is brand loyal, what age group will hunt for a discount. Chances are you’re in a demographic rut and don’t even know it.

A National Public Radio piece about the changing Hispanic television market made me wonder — what opportunities are retail teams missing because they’ve become comfortable with demographic consumer profiles?  According to the NPR story, over 50 million Hispanics now comprise 16 percent of the TV market. That market is growing — not via immigration, but because of the increasing U.S. birth rate. And that market is changing. While Hispanic television used to be primarily in Spanish, today 80 percent of the Hispanic market is bilingual or prefers English. Broadcasters are paying attention — creating new English program offerings that appeal to this evolving audience. The point is: they’re paying attention to changes in a demographic profile. The question is: are you?

Let’s stick with the Hispanic market as an example — after all, it is a market that is rapidly growing and changing within the U.S. How can you capitalize on the emerging and changing Hispanic market? POS data can help you analyze what Hispanic customers are currently buying and adjust your promotions, shelf space and price points accordingly. You start by working with your retailer to identify Hispanic store groups and then creating custom store groups using your business intelligence solution. You can also supplement this data with syndicateddata. You can also focus on single stores targeted as Hispanic.  

Then you can begin to challenge your assumptions to see how the Hispanic market’s purchasing behavior is changing. By completing a deeper POS data dive you can also draw out more variant and precise demographic profiles within the Hispanic profile perhaps by gender, region or age. Are there SKUs typically marketed to the Hispanic consumer that appear to be losing ground? Are there other SKUs that deserve more shelf space in your Hispanic store group? Can you identify opportunities for new SKUs or cross-category promotions?

How can you utilize POS data to gain greater insights into this consumer market? Following are a few examples.

Once you’ve created a Hispanic database based on collaborative input from your retailer, start with what we call a Basic Report. This report illustrates how each Hispanic Store Group compares for the category or brand listed and allows you to easily compare the groups to see how categories/brands are performing in each group. With a report such as this, any metric or combination of data can be pulled, so the analysis possibilities are almost endless. 

(Click on image to enlarge)

A SKU Ranking report allows you to see how single items in a group compare to each other. In this example we’re comparing how well Body Spray items sell in each of the different Hispanic store groups. This will show if the top Body Spray item in high-volume Hispanic stores is the same as those in low-volume stores, or whether there are differences between the groups. A report such as this will help you make assortment decisions. Should you increase facings for the highest-ranking items? Or remove the lowest-ranking items from 

(Click on image to enlarge.)

A Cross-Table Comparison report can be used to analyze how groups of items perform across the Hispanic store groupings, and determine which item/store combinations skew higher or lower. With a POS report such as this you can run examples by Brand/Store Group to see which brands perform better in each group. In this example, the Brand #1 items skew much higher in the Medium Hispanic store group than in the Mega-High or High Hispanic groups. By contrast, the Brand #8 items currently have only a very small presence in any of the Hispanic groups. 

(Click on image to enlarge.)


Get out of the rut. Challenge your consumer profile assumptions.