The New Normal: How Social Demographics Have Shifted

Social demographics have changed and shifted in recent years, but how does this affect your small business? From a marketing perspective, demographics refer to human populations concerning size, gender, race, occupation, and income – as well as many other complex factors that can change over time.

Demographics are of major interest to businesses because they involve people – and, in simplistic terms, people make up markets. Therefore, social and economic demographics are a key element in marketing your small business.

Changes in demographics have a significant impact on the way businesses market their products. As a result, marketers keep such a close eye on worldwide and local demographic trends, as well as changes and developments in their specific markets.

Social demographics will always change over time as a result of population growth, politics, gender roles, family structures, and economic climate. In the U.S., social demographics have changed dramatically over the past few decades, not least because the population has grown and diversified at unprecedented rates.

• Fewer Americans are living in middle-class households

According to social trend data, the number of U.S. adults living in middle-income households had fallen by 50% in 2015. This is a major shift for marketers to consider, as those households served as the nation’s economic majority for over 40 years.

What’s more, the gap between middle and upper-income households has widened, with upper-income households claiming seven times as much wealth as those in the middle bracket.

It’s not all bad news, however. Despite these changes, the number of families in the upper-income bracket has increased by 7% since 1971. This is good news for small businesses, as it means more people have disposable income to spend.

• The American family structure is changing

The last 2 decades have seen declining marriage rates. Now the share of American adults who have never been married is at a historic high. This change has seen a decline in the number of 2-parent households, while divorce, remarriage, and cohabitation are on the rise. Now, 1 in 6 U.S. children lives as part of a blended family.

As a result of growing gender equality, the once separate roles of mothers and fathers are now are converging, due in part to the rise of women in the workforce. 50% of U.S. households now have a mom and dad who both work full time, which is set to improve the economy and level out income disparity in years to come.

• Changes in income distribution have created a 2-tiered market

The number of middle-class households has shrunk, leading to a 2-tiered market for many businesses. As a result, companies are now tailoring their products to 2 very different markets: the upper and lower income brackets.

Changes in major economic variables, such as the cost of living, interest rates, and savings and borrowing patterns have also had a large impact on income distribution in the marketplace.

• Americans are becoming better educated

Despite that households in the lower income bracket have grown by 4% in the past five decades, positive change is on the horizon. Economic forces have driven more Americans to pursue higher education than ever before, and now a better-educated, more white-collar population is entering the workforce. 32% of Americans over the age of 25 now hold a bachelor’s degree, compared with 16% in 1988.

The economic environment has affected consumer spending

Changing economic factors have undoubtedly affected consumer spending and buying behavior, which is why marketers monitor them so closely. In 2018, many consumers in the lower and middle-income brackets have adopted a back-to-basics sensibility in their lifestyles, and their spending patterns will likely persist for years to come.

How economic changes affect buying patterns

The economic environment has undoubtedly changed over the past 50, 30 and even 20 years. Now, buyer behavior is characterized by more than just concern for the lowest prices. Customers now seek more valued in what they buy, defined by good quality, excellent customer service, and a fair price.

Tracking social demographics is essential for small business success

As you can see, social demographics have shifted over the past few decades, creating both positive and negative changes in the marketplace. Whether changes are political, sociological or environmental, there is almost always an economic impact that ripples through future generations and affects marketing decisions for years to come.

As a small business owner, you can watch these variables by using economic forecasting, or you can hire a marketing manager who will research changing demographic trends for you. Many businesses are also using contemporary technology via social media and online analytics programs to target their demographic closely. The demographic segments you should watch include:

  • Generational groups: which generation does your target market belong to? Baby Boomers will have very different buying and spending habits than Millennials, as well as alternative ways of buying, so make sure you understand the difference between these demographics.
  • Age range targets: rather than targeting specific generations, you might look to market to people in specific age brackets. Examples of this include married couples buying a house, or women about to have a baby.
  • Family structures: to market a product effectively, you need to know whether your target customer is married, single or divorced. Family structure affects both buying habits and the sales process. In any 2-parent family, there is usually one key decision maker, and that is the person you want to target.
  • Income changes: put simply, you need to know whether the group your targeting can afford your product, as well as whether they’re looking for a low-cost or premium option.
  • Ethnic backgrounds: people from different cultures will often have different buying habits from one another. There may also be holiday differences and cultural traditions to consider.


Small businesses do not have to be shut down by an economic downturn or caught off-guard in a boom. With social demographics tracking and planning, your business can take advantage of changes in the economic environment and scale your growth accordingly.

Timothy Kelly

Timothy Kelly

Tim has been a writer for over 20 years covering financial markets and small business. In addition to writing about the financial markets, Mr. Kelly writes extensively about digital marketing and SEO. Mr. Kelly attended Boston College where he studied English Literature and Economics, and also attended the University of Siena, Italy where he studied studio art. Mr. Kelly has been a decades-long community volunteer in his hometown of Long Island where he established the community assistance foundation, Kelly's Heroes. He has also been a coach of Youth Lacrosse for over 10 years. Prior to volunteering in youth sports, Mr. Kelly was involved in the Inner City Scholarship program administered by the Archdiocese of New York. Before creating ForexTV, Mr, Kelly was Sr. VP Global Marketing for Bridge Information Systems, the world’s second largest financial market data vendor. Prior to Bridge, Mr. Kelly was a team leader of Media at Bloomberg Financial Markets, where he created Bloomberg Personal Magazine. Contact Tim