Table of Contents
Key takeaways
- Zip codes show the median age of residents, which affects buying behavior and preferences
- A tech company may prioritize gadgets in an area where lots of young professionals live
- GIS mapping tools can identify high-traffic locations near areas where customers live or work
- Promotions might feature social media influencers in regions with a younger population
Use age to tailor product distribution
Businesses can source data on age, income, occupation, family size, and lifestyle within specific regions from government census records, mapping software, and third-party data providers. Age, in particular, can yield very rich insight.
Millennials and Gen Z prioritize health and wellness. According to McKinsey’s Future of Wellness research in 2024, which surveyed over 5,000 US, UK, and Chinese consumers, 80.66% considered wellness a daily priority. The exact statistics are 82% of US, 73% of UK, and 87% of Chinese consumers. Gen Z and millennial consumers are buying more wellness products than older people across dimensions such as nutrition, health, sleep, appearance, fitness, and mindfulness.
Let’s say a food supplement company that correspondingly targets a younger demographic was looking to expand in Indianapolis. Information such as Indianapolis zip codes can indicate the median age of residents and the distribution of age groups.
Evaluate purchasing behavior
Gen Z accounts for only 5% of US spending in 2024, but that percentage is expected to reach 17% by 2030. This generation will enter its peak earning years shortly. What’s more, they are inclined to spend their money in key areas.
They buy items on social media more than any other generation and are likelier to research a product online before buying it if they do. The hashtag #tiktokmademebuyit illustrates this tendency with over 6.7 billion views.
According to a 2022 survey in the US, however, consumers across age groups prefer buying products directly in stores. Boomers hold the highest share at 81%, followed by Gen X at 73%, millennials at 65%, and Gen Z at 55%. The trend was reversed with social media apps: 23% of Gen Z were most inclined to buy a product via a social media app, followed by 21% of millennials, 13% of Gen X, and just 3% of boomers.
Assess product fit based on lifestyles and local preferences
Different products align with different lifestyles and preferences. In a community of a lot of young professionals, a tech company may prioritize gadgets and accessories, while in family-oriented areas, it may focus on household essentials or educational tools.
To take this insight a step further, you could analyze real-time sales data to identify shifts in demand or new opportunities, such as emerging customer preferences in certain regions.
Optimize distribution channels
Certain channels might be more effective depending on the region’s infrastructure and consumer preferences. For example, e-commerce is more popular with urban residents.
Brick-and-mortar businesses should choose store locations that are easily accessible to their target groups. GIS mapping tools can help identify high-traffic locations near areas where customers live or work.
Localized marketing and promotion strategies
Promotions in regions with a younger population might be more tech-savvy and feature social media influencers, whereas regions with older demographics may respond better to traditional advertising.
Consider location-based discounts or bundling products based on local buying patterns, like family-sized packages in suburban areas or single-serve options in urban centers.
FAQ
What is the most useful demographic insight for retailers?
Household income provides a direct measure of purchasing power, influencing what types of products, price points, and even marketing messages will be most effective in a particular area.
Can zip codes provide an indication of household income?
Yes, zip code data typically includes an area’s median household income. Some tools even list income ranges (the percentage of households earning under $50,000, $50,000-$100,000, etc.). High-income zip codes are prioritized for luxury brands or premium product lines, while value-oriented retailers focus on regions with lower median incomes.