Understanding Demographic Changes That Affect Profitability Of Brands

Written by: Lilly Cobal

Brands always tend to face a number of challenges when it comes to the aspect of customer reach. The customer base of any brand is constantly changing, and this is something that can impact the overall profitability that brands can experience. The population growth, in particular, is something that heavily impacts changing demographics, and the fluctuations in the population can skewer the manner in which brands market their products. In light of this, it is important for brands to be constantly aware of the changing demographics in different regions and the different intricacies of changing customer bases. 

Studies have shown that the current demographic that brands adhere to will be completely different by the time the year 2040 comes around. While this may seem to be an incredibly drastic shift, there are a number of smaller-scale changes that take place on a day to day basis. Every month, brands have a whole new set of customers that they can target and a whole base of customers who might not have any additional need for a product. 

While there is no certain way to determine the exact numbers that relate to the customer base, there is always a way to discern the trends that are currently prevalent within the industry and consumer market.  

Decline Of Working Population

One key phenomenon that has been taking place all over the world is a decline in the working population. This is something that affects the purchasing power that people have and the buying patterns that they exhibit. While this is an important facet to pay attention to, brands need to also understand the different reasons for the decline in the working population. 

One of the reasons for the decline of the working population is simply because of the overall decline in population. This is a phenomenon that is being experienced throughout the world as people become more aware of the population crisis and also because of the change in perception regarding families. Millennials, in particular, are more inclined towards focusing on their own careers and don’t deem having a family to be a priority. This means that the number of children being born every year has significantly dropped as compared to ten years ago.  

Early retirement is also a factor that has caused the decline of the working population. While most jobs and fields tend to have a retirement age that ranges between 55 to 70, the age at which people choose to voluntarily retire is significantly lower. Many industries have developed into high-pressure environments, making the rate of burnout significantly higher. The new trend of retiring early has become incredibly prominent in a number of sectors, causing a decline in the working population. 

The third factor that has led to the decline of the working population all over the world is the increase in automation. Several jobs that were previously performed by individuals and skilled professionals are now being performed at twice the speed by machinery, thereby leading to a decline in jobs. This means that there are fewer positions to be filled out by people in certain fields as compared to what it once was. 

World Wide Population Statistics

It is important to note the changing population percentages that are predicted for the coming years. 

Research shows that between the years of 2013 to 2050, the North American population is set to increase by an incredible 26%. A significant portion of this population is predicted to be immigrants coming there from different countries across the world. 

South America is predicted to experience a 27% growth in population over the next ten years, many of who will also be immigrants coming to them from different countries across the globe.

Europe, on the other hand, is set to experience a decline with their population dropping down by around 4%.

Africa and Oceania are set to experience the same phenomenon as the United States and have been showcasing an incredible amount of growth in their population. The growth percentages stand at 115% and 48% respectively. 

Asia might have been one of the most populated continents for an extremely long period of time, but is set to actually experience a population decline. The growth percentage over the next few years is only predicted to stand at 20% 

Median Population

For brands who want to properly target the right kind of consumer base, understanding the median population is incredibly important. There are numerous shifts that take place when it comes to economic growth and these always affect the manner in which brands are able to operate. The median population is generally the most targeted consumer base because they generally comprise of the highest buying population and also come under the category of the working population. Researchers expect the median population to rise in the coming years, which can affect the manner in which brands target certain audiences. 

The median in North America is set to rise from 37 to 41. 

Europe, on the other hand, is set to experience a rise that goes from 40 to 46. 

Asia is estimated to have an incredible rise in the median, going from 29 to 40. 

Africa is set to experience a small growth in median population age going in 19 to 25. 

South America is predicted to experience a median rise that goes from 27 to 41

Oceania will be experiencing a growth rate that extends from 32 to 37 

Understanding Target Generations

As people grow older, the generations that are most prevalent at a given time will change. Currently, the Millenial population is what currently stands as the biggest section within the consumer base followed by Gen X. Within a few years, Gen Z will be in the same position as the current Millenial population. This makes it incredibly important for brands to be able to properly assess the population and the trends that are popular with these different generations. It is also important to understand this because of the cultural impact and changes that different generations experience. 

There is no doubt that understanding demographics and the changes that they experience is important, and something that can significantly help brands who want to improve their reach and their overall profitability.


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