What is Demographic Segmentation?

In contrast, consumers aged 58 and older make up 35% of the population but only account for 28% of wellness spending. According to McKinsey & Company, Generation Z and millennials drive more than 41% of annual wellness spend despite making up only 36% of the adult population in the United States. Recent data highlights exactly how critical it is to track these changing generational behaviors.

For instance, hotels and travel companies can offer romantic getaways to couples. This demographic segment is based on marital status e.g. married, single, divorced, widowed, etc. For instance, if you’re an interior decorator — homeowners are your target audience, while real estate rental services are more relevant to those who don’t own a home.

Now that your segmentation criteria is outlined, it's time to find the people who fit within each segment. Competitive analysis shows women segmented by age are already well served by other brands, but there is no skin care brand that specifically targets women going through menopause. This can be demographic, psychographic, geographic, behavioral, or firmographic (if you're a B2B company).

How to collect demographic data

When companies only have an email address, they can use third-party enrichment tools to fill in the missing pieces. A clothing retailer might send a quick survey asking customers about their lifestyle and occupation to better understand how their garments are worn in the real world. Implementing post-purchase surveys or sending email questionnaires allows teams to gather detailed background information straight from the buyer. Software vendors might require a name and email address to download a whitepaper, but they can also add a drop-down menu asking for company size or job title. By adding optional fields to digital sign-up forms, companies capture first-party data directly from the source.

If people can’t afford your product or service, there is no point in showing them ads. Let’s look at the differences between skincare brands for men and women. They reference that they are “TikTok’s favorite cold brew,” feature user-generated content made by younger customers, and have messaging on the page made for younger females. For example, millennials may spend most of their time on Instagram and Facebook, while seniors prefer email inboxes. Skinny Confidential features UGC content from young users, and their copy uses vocabulary geared towards young females.

• Demographic data is acquired through censuses, market surveys, and analytical tools.
• By reviewing the reports, you learn which segment buys most from you, how many people entered or left each segment in a given period, and which campaign performed best per segment.
• When we split the word “demography,” we get demos, which is Greek for “people,” and “graphy,” which means “the study of people”.
• Studies suggest that men spend 75% more than women with in-store purchases.
• Research shows over 90% of US Gen Z and Millennial users watch short-form content frequently or sometimes across platforms like TikTok, YouTube and Instagram.

Gender-based segmentation helps brands tailor products, packaging, and messaging to resonate with different audiences. For B2B businesses, demographic segmentation works at the company level instead of the individual level. When B2C marketers divide their audience into demographic groups, they can more effectively tailor their What does demographic segmentation mean? messaging and products to their audience’s needs.

Step 2: Identify and combine data sources

The focus is on how spacious the car is and how many people and things can fit within it, demonstrating its versatility. Volkswagen understands that people within different family units need different types of vehicles. Next, let’s check out some real examples of brands using demographic segmentation. Now you understand what demographic segmentation is and why it’s important.