Retail & Consumer

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What Bradsworth Digital Solutions has Learned

THE consumer is changing. They are more capricious and less loyal. They have less time but are more conscientious. They shy away from stores and prefer experiences over products. Today’s consumer is an entirely different animal—and unrecognizable from their peer from the good old days. This brand of conventional wisdom has been proliferating in the marketplace for a few years now. It appears as if there has been a seismic shift in the consumer’s mindset—and choices—a shift that has left the market asking: “Who is this brand-new consumer?”

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There are even more clichés surrounding the millennial consumer. They are often branded as being more narcissistic, more idealistic, more socially-conscious, and more experience-oriented than any of their preceding generations. They have even been blamed for ruining everything from movies to marriage! They seem to have broken the mold of their similar-aged cohorts of past eras.

Amid this confusing and fast-changing narrative about the changing consumer, we paused to ask ourselves some hard-hitting questions to cut through the noise and arrive at the truth. Has the consumer fundamentally changed? If yes, in what ways have they changed? Is there a seismic difference in the changes that we are witnessing? More importantly, is the hysteria in the marketplace obscuring a much deeper and more fundamental change in consumer behavior?

It is with these questions in mind that we conducted a year-long study to go beyond the headlines and unearth more profound observations about the consumer that might have been either missed or misunderstood in the midst of the hype.

Our findings debunked many conventional pearls of wisdom about the new-age consumer. What we learned is that the consumer hasn't fundamentally changed, but to the extent, they are changing is because the environment around them is evolving, characterized by economic constraints and new competitive options. They’re changing because of the financial constraints they find themselves in. This, in turn, has been triggered by a rise in nondiscretionary expenses such as health care and education and the growing bifurcation between income groups. They’re also changing in reaction to the abundance of competitive options available to them, made possible by technology.

It’s this swirl of financial and marketplace dynamics that is heavily influencing the behavior of today’s consumer as opposed to a fundamental rewiring.


Understanding the consumer: Our approach

We undertook a yearlong journey to study the consumer. We scoured government data; talked to clients, industry leaders, and analysts; conducted primary interviews; and surveyed a representative sample of more than 4,000 consumers from the United States. Working with Deloitte’s Center for Consumer Insights, we conducted primary research, leveraging 450 billion unique points of location data and more than 200 billion points of credit card transactions. Our goal was to examine the current state of the consumer as well as to study their behavior and underlying attributes to see if there were nuances and intricacies that were being missed.


We adopted a two-pronged approach to our research.

First, we zoomed out to study the macro demographic, cultural, and economic trends related to the US consumer. Our focus here was not on behavior but on broad trends that impact behavior. It’s similar to the approach we took in an earlier study, The great retail bifurcation.2 In that, we looked at the income and expenditure data to examine whether and how the economic situation of consumers had changed and the implications of that change. But this time, we wanted to go deeper: We wanted to dig into other broad categories of demographics and regional changes to see where they live, their ethnicity and race, and how factors such as economic situation and health status are driving changes in consumer behavior.

Second, we examined primary data on the consumer’s changing demographics and economics to understand consumer behavior—not just their overall behavior but their micro-behaviors, which differ, sometimes substantially, within emerging segments. We looked deeply at how they spend their money and time, where they go, and what’s most important to them.

In this report, we have highlighted the most intriguing insights from our study to put together the construct of a consumer who in some ways is changing and in other ways isn’t really changing at all.


The changing consumer: Deconstructing demographic dynamics

A grasp of demographics is critical to understand what makes the world—and the consumer—tick. We are our demographics. This doesn’t mean that the consumer can be reduced to the sum of their individual demographic categories. It means that they’re a creation of the complex interplay of ever-shifting demographic forces that create unique needs, cultural biases, and define consumer behaviors.

To understand how, where, and why the consumer is changing, one must understand their underlying demographics, which include much more than just life span, fertility rate, race, and ethnicity. Health, culture, economics, and education are all critical dimensions of demographics—as are geography, regionalism, and the urban-suburban-rural divide. Understanding these changing demographics helps shine the light on any emerging pockets of opportunity.

Millennials are the most diverse generational cohort in US history.


A diversifying consumer base with diverse needs

There is a seismic shift that has taken place in the United States over the past 50 years. The population has become increasingly heterogeneous: Millennials, now representing 30 percent of the population, are the most diverse generational cohort in US history, with roughly 44 percent consisting of ethnic and racial minorities. In comparison, only 25 percent of baby boomers belong to ethnic and racial minorities.

This increased diversity, while most pronounced in the millennial generation, is not a uniquely millennial attribute. The shift in the ethnic and racial makeup of the United States has been underway for some time now, with the consumer base becoming increasingly diverse. The current racial makeup of the United States (and the consumer) is barely 50 percent white and the number is likely to continue shrinking.4 The non-Hispanic white population is projected to drop from 199 million in 2020 to 179 million in 2060—a decline of 10 percent—even as the US population continues to grow.

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Is Time Money?

Time is money. So where are consumers spending it?

It seems to be a commonly accepted truism that we are living in the age of the “time-starved consumer” who has less time than ever before. But a day is still 24 hours. That hasn’t changed. So, what has?

In our survey, 76 percent of the respondents reported having less or the same amount of free time than just a year before. Our results, therefore, corroborate the broadly held view that consumers have less free time than before, at least in perception.

But here, once again, a deeper cut of the data tells a different story. While it is a fact that the total hours worked in the United States has risen by 43 percent since 1980, the increase has been driven by the growth of the workforce. When we factor in the increased working-age population and labor force participation over the years, the average hours worked per person has fallen by 9 percent since 1960, which means people are spending less time working.35

According to the Deloitte Consumer Change Study 2018, the time not spent at work is only being partially redirected toward other nondiscretionary activities, such as personal care and household-related events, which rose 13 percent and 8 percent, respectively. In fact, the amount of time spent on leisure by the average consumer has risen. Available discretionary time is up overall, with time spent on leisure and sports increasing 5 percent between 2007–2017, or an additional 14 minutes daily, despite what consumers may be feeling.

The New Consumer Species

To conclude, today’s consumer—both millennial and nonmillennial—is not an entirely different species. However, they’re operating in a new demographic, economic, and cultural landscape as described below:

The consumer base is increasingly diverse. The current consumer base has evolved in the cross-currents of a set of broader demographic trends that have turned what was a homogeneous mass market into a heterogeneous marketplace, consisting of multiple competitive options to choose from.

Economically, the modern consumer is under greater financial pressures compared to the consumer of 30 years ago. This is particularly evident among low-income, middle-income, and millennial consumers.

Consumers are delaying key life cycle milestones. From marriage and homeownership to having children, these delayed milestones (especially among millennials) have implications on consumer behavior.

These demographic, economic, and cultural forces have created a marketplace that is fragmented. And the average consumer base is representative of increasingly diverse subsets of consumers with distinct needs who have increasingly distinct competitive options to address those needs.

Beyond demographics: A deep dive into consumer behavior

Demographics by themselves do not tell the entire story. So, we looked deeply at consumer behaviors. Specifically, we looked for changes or insights across four broad behavioral aspects of the consumer: How they spend money, how they occupy their time, where they go, and what matters to them.

In our analysis, we applied demographic and geographical lenses to see if there are, in fact, changes in modern consumer behavior as compared to the past, and how these changes measure up to marketplace axioms.

How are consumers spending their money?

Since 2005, total retail spending in the United States has risen by about 13 percent to around US$3 trillion annually. The retail market has been growing and continues to expand. In fact, in 2017, retail grew a healthy 2.3 percent. However, per capita retail spending remained flat for the most part of the period, meaning that population growth, rather than greater spending per person, was the primary driver of the increase in spending.

Also, surprisingly, the share of wallet data over a 20-year period reveals relatively consistent spending across most consumer categories. Food, alcohol, furniture, food away from home, and housing all constitute roughly the same percentage of the consumer’s wallet today as they did in 1997. Even entertainment, a category where one might expect to see an increase in experience-driven spending, was basically flat. In fact, for consumers under 30, spend on entertainment declined from 5 percent to 4 percent of the total wallet.

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