Marketers Embracing New Segmentation Methods to Encompass a Diverse Consumer Culture

Posted by: Jeff Fromm

I was recently invited to participate on a panel at the first annual Hallmark Diversity and Inclusion Summit. After spending the day listening to inspired presentations about the multicultural consumer and what our nation’s future looks like as we step into the first ever minority majority era, I was becoming more and more nervous about what contributions I would be able to make on the panel.

I was asked to participate in order to provide the millennial perspective about diversity in the consumer market. Before the panel began, I was planning on sharing that the IMG_6975millennial generation is the most diverse generation to date.  Only 57 percent of US millennials self identify as non-Hispanic whites, fifteen points lower than the baby boomer generation.  I was also going to explain that millennials are the most connected generation, spending a whopping 17.8 hours per day consuming digital media, a number far greater than those from older generations. But, as soon as I was asked what diversity meant to me on a personal level, my answer changed.

As a millennial, diversity to me is a collection of people from different backgrounds with different perspectives coming together to create a greater community.  The goal from a marketing perspective is to embrace this culture of diversity so that a brand can communicate in a way that encompasses all different types of people. Brands today are attempting to appeal to this multicultural audience by segmenting consumers in order to create the most direct and relatable messages.  To me, this is where the problem lies.  While segmentation can provide valuable insights into consumer trends and demographic compilation, it also creates divisive boundaries in the way brands are viewing their most valuable stakeholders.

When creating consumer segmentation, businesses go to tremendous lengths to try and better understand their customers (both internally and externally) and the nuances of each segment in order to determine how to better communicate with consumers on an individual or group level.  Sometimes businesses go as far as putting scores on each segment in an attempt to quantify the likelihood of a purchase.  In this regard, marketers have created an accepted form of stereotyping and justify that behavior as a way to improve target marketing.

Sure, the benefits to this type of consumer research are palpable and actionable. Businesses learn who their customers are and what they look like. However, the real opportunity lies within the behavioral and attitudinal variables that go beyond the hard lines drawn by superficial demographical and geographical segmentation.

Inspired brands will soon realize that the real business opportunity related to understanding a diverse consumer base will be a new way of communicating and segmenting the market based on a combination of not only demographics, lifestyles and media habits but things like behaviors, attitudes and values. While some companies have begun to look at these measurements, the key is to ask how they are really collecting this data.  Inspired brands will also understand that the segmentation process cannot happen 302001867_03731def87_zonce every 3-5 years, but exist in the marketing plan as something that is constantly evolving in real-time.

As we wrapped up the panel, I asked myself, “are the best brands really embracing the multicultural consumer?” Now, reflecting back on my experience at the summit my answer is two-fold.  First of all, is there really even such a thing as a multicultural consumer? If we are truly stepping into an age where the minority is the majority, isn’t the multicultural consumer just a consumer? Secondly, it all boils down to whether or not brands are story telling or Storyliving™.  Brands that that tell a story and say they are accepting of diverse community are much different than those who are actually living out that inclusive mentality and inviting their consumer partners in to share in an experience or a brand journey.

Greg Vodicka contributed to this post.

Photo Credit via Flickr: Cedric Fayemendy and Pierre Metivier

About Jeff Fromm

Although not a Millennial as defined by his age, Jeff Fromm is the Millennial Marketing Guy. Jeff is President of FutureCast, a marketing consultancy that specializes in Millennial trends, and is a contributing writer at...See Jeff's full bio.