Demographic Data Losing Its Value as Consumers Become More Unpredictable

Global pressures have made consumers more uncertain and unpredictable, according to new research conducted by Twilio. As a result, 48% of marketers are now questioning the value of traditional customer segmentation based on demographic data. Instead, they are placing greater emphasis on real-time personalization (71%) and seeking more flexibility in their budgets on where and what to invest in (65%). The study, which surveyed 300 marketing decision-makers in the UK alongside 2,020 British consumers, shows that consumer behavior has undergone a significant shift. More than half (58%) of UK adults say their buying behaviors and choices are more complex than they were three years ago.

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Nearly one-third (31%) of UK adults report being more indecisive about what to purchase compared to three years ago, with a similar percentage (30%) agreeing that the pandemic has changed their behavior and the way they think. It appears that shoppers/consumers have also become smarter during this period, with two-thirds (66%) stating that they now seek better shopping deals. This complexity is echoed by the overwhelming majority of marketers in the survey (85%), who believe that consumer behavior is more volatile than ever. They cite the cost-of-living crisis (76%), social media, environmental awareness (51%), and the ongoing impact of the global pandemic (48%) as drivers of change over the last three years.

Given this shift, old methods of customer segmentation and targeting no longer meet their needs, with 48% of marketing professionals believing that demographic data is losing its value. Marketers are increasingly turning to real-time personalization and first-party data strategies to understand this new consumer behavior, with 71% stating that real-time personalization is more valuable and 58% believing it will be the most important technology to stay ahead. Real-time personalization is driven by previous customer searches, purchases, and shopping behaviors, providing relevant content and choices when needed. This typically happens using event-based triggers, but it can only be achieved with an up-to-date customer data foundation across various channels to feed it.

Sam Richardson, Customer Engagement Consultant at Twilio, stated: “Just like the current arguments around outdated economic models, this research highlights that it is really time to move away from old demographic methods and customer segmentation models. People are unpredictable, and their ‘journeys’ and shopping decisions are non-linear. Marketers and customer service agents need to have the kind of data that allows them to be more fluid in how they engage with their customers.” He continued, “The only way they can gain deeper insights into their customers and all their nuances is by focusing on the value inherent in first-party data. You don’t need to base your marketing strategy on outdated categories and assumptions if you can personalize based on how people interact with your brand both historically and in the moment. Consolidating all this data from every part of your business into a single source of truth will help organizations know exactly what their customers need, at the moment they need it.”