We often talk in the boating industry about reaching the “middle class” — that nebulously defined average American.
But the Demand Institute is suggesting a new way of looking at consumers — one that makes a lot of sense, especially in a category like boating that is not need-based.
In “Introducing the Connected Spender: The Digital Consumer of the Future,” the nonprofit think tank says the income-based approach ignores two key factors: consumer mindset and engagement, and access to goods and services.
And it’s not just about online purchases. These consumers are buying through a number of channels. As the report says: “They are digitally savvy consumers who have enough income for discretionary purchases, are avid shoppers who punch above their income class in discretionary spending, prefer premium products, and are on the cutting edge of consuming trends.”
According to the study, this group will account for 46 percent of the world’s consumer spending, or $260 trillion, over the next decade.
They outspend other consumers in a variety of categories. By 2025, only three mature economies — the United States, Japan, and Germany — will be among the 10 largest markets for Connected Spenders. However, by 2025, the average Connected Spender in those mature markets will spend nearly $40,000 annually, 10 times the amount of one in an emerging market.
“The Connected Spender is the ideal consumer for a variety of goods and services,” said Louise Keely, president of The Demand Institute. “Consumer-facing businesses should use Connected Spenders as a lens in making decisions about which markets to invest in, how to communicate with and reach consumers and what actions they can take to support growth across different markets.”
There are two key ways in which the Demand Institute defines the Connected Spender: they have access to the internet and participate in the digital economy, and they believe they have discretionary income. According to the report’s authors, even the lowest income Connected Spenders participate more frequently and allocate more income to discretionary products than the highest income non-Connected Spenders. On average, they are younger, more urban, and more affluent than other consumers, and they spend more than other consumers in a variety of categories.
So how do we reach these Connected Spenders? They expect a full multi-channel consumer experience. They use the internet for research, shopping, sharing reviews, checking out social media, watching videos and consuming other media. These are consumers that will, in many cases, have made the decision whether or not to do business with you before you ever see them in a showroom.
You can find the full report at demandinstitute.org/connectedspenders.