C1 Social Factors
Social factors refer to the ways in which people live or the values of people in a community in which a business operates.
Attitudes towards saving and debt.
Attitudes towards social responsibility
Consumer tastes, trends and fashions.
Consumer buying habits
Population demographic changes such as birth rates and migration.
Career attitudes
Work-life balance
Social Trends in Retail
Demographics
Demographics are the characteristics of the population in which a business operates. They include population size, age, gender, income level and race.
An example of a change in demographics is the fall in average incomes of up to 10% due to the 2022 cost of living crisis. This leads to a large drop in disposable incomes as people prioritise necessary items. Retailers need to consider the product range they offer as demand for aspirational goods will fall and inferior goods will rise.
Ageing Population
Ageing population refers to the phenomenon that the proportion of the population aged 60 and over is increasing. This is a result of longer life expectancy and lower birth rates. It is estimated that 1 in 6 members of the population will be over 60 by 2020 (WHO).
An example of the impact of an ageing population on retail is the layout of stores. Easier to read labelling, products aimed at older customers being easier to reach, places to sit and in-store coffee shops are some of the features that appeal to older demographics (The Consumer Goods Forum).
Household Occupancy
Household occupancy refers to the structures of people who share a home. Examples of household occupancy include single people, couples with no children, couples with children, single parents, multi-generational families and friendship groups.
An example of a change to household occupancy is more households with multiple generations. This has made it difficult for retailers to predict buying patterns for households.
Mobility
Mobility in retail is a measure of how freely consumers move between different retailers. Car ownership, good infrastructure and public transport can all increase the mobility of consumers.
An example of the impact of mobility on retail is the lockdowns that occurred to stop the spread of Covid-10. During this time, people gained confidence in online shopping which has changed shopping behaviours for many post-pandemic. This has led to the closure of many physical stores and pressure on retailers to improve their online presence.
Migration
Migration is the movement of people between different geographical areas. This may be desirable due to improvements to the quality of life such as improved income or lifestyle factors such as better climates. International migration can be made easier or more challenging through government legislation on immigration. Improvements to technology and transport have made mobility easier over time due to people being able to stay connected to friends and family.
Diverse Communities
Diverse communities are made up of groups of people who do not share all of the same backgrounds, characteristics and lifestyles. Examples of differences include race, sexual orientation, age and physical ability. Migration, interracial marriages and changing social attitudes such as allies for the LGBTQ communities are reasons communities are becoming more diverse. However, some communities do remain more homogenous due to local culture and resistance to change.
An example of how more diverse communities affect retailers is ‘the black pound’. This refers to the spending power of the mulit-ethnic consumer in the UK. Reports have found that retailers may be missing out on earning up to £4.5bn from multi-ethnic consumers by not providing products that meet their needs (Cook).
Culture
Culture refers to the patterns of shared beliefs and behaviours of people that are passed on from generation to generation. Groups may include those of the same race, ethnicity, nationality or social interests. Shared behaviours may include food choices, clothing, marriage traditions, music taste and art preferences. Cultural differences exist where groups of people from different cultures interact.
An example of how culture can affect retail is the different meanings colours have in different cultures. In western cultures, green can represent good luck but in Chinese culture, it symbolises infidelity (AGX). With colours used in store subconsciously affecting brand perceptions (Retail Next), retailers must consider the different messages colours communicate to different cultures.
Lifestyles
Lifestyles refer to the way in which people live their lives. This includes exercise, diet, entertainment, hobbies, alcohol consumption, fashion and travel. Common lifestyle behaviours are shared by large numbers of the population such as beer drinking in the UK. Niche lifestyle factors are only shared by small groups such as cosplay.
An example of how lifestyles affect retailers is the rise in popularity of plant-based diets leading to increased pressure on the retail sector to provide plant-based alternatives. According to a survey, 1 in 4 people labels themselves as flexitarian (Searby). This means more people are seeking plant-based alternatives in their grocery shopping with products tasting similar to meat being the most popular. The market for conventional plant-based food in the UK is expected to be worth $1,365.2m USD by 2026 (Wunsch).
Leisure Time
Leisure time is any time that a person has that is not spent at work or taking part in household duties such as chores or childcare. This is the time that people get to spend on activities they enjoy including sports, relaxation, holidays and socialising.
An example of the impact of leisure time on retail is the shift in leisure activities towards health and fitness (Deloitte). A study found that over half of consumers bought home gym equipment between March 2020 and April 2021 and intend on continuing with home workouts (GlobalData).
New Technologies
New Technologies create changes in consumer buying behaviour. The rise in smartphone use and social media marketing has led to increasing numbers of consumers buying online. In addition to purchasing, consumers have a wealth of information to inform their purchasing decisions. This includes access to information rival firms provide, which can help them make comparisons. Reviews are also easily accessible for many products online that previous customers provide and social media is often used by influencers to communicate their experiences with different brands and products.
An example of how new technologies have impacted retailers is the way in which they interact with the rising number of consumers who are shopping online. Artificial intelligence is being increasingly used in customer service through chatbots, algorithms are used to quickly and effectively target products to consumers that meet their individual needs and virtual reality is being developed to allow customers to visualise a product before purchasing (Boiko)
Reference List
AGX. Colour Psychology in Retail. https://www.agx.in/colour-psychology-in-retail-design/
Boiko, Oleg. https://wear-studio.com/virtual-reality-in-retail/
Danziger, Pamela N. https://www.forbes.com/sites/pamdanziger/2018/09/06/9-demographic-trends-shaping-retails-future/?sh=462933367b00
Deliotte. https://www2.deloitte.com/uk/en/pages/consumer-business/articles/the-leisure-consumer.html
Retail Next. Colour Psychology: 4 Ways Store Colours Can Influence Shoppers. https://retailnext.net/blog/color-psychology-4-ways-store-colors-can-influence-shoppers
Searby, Lynda. https://www.foodmanufacture.co.uk/Article/2022/07/06/Plant-based-food-trends-2022
The Consumer Goods Forum. https://www.theconsumergoodsforum.com/wp-content/uploads/2017/11/CGF-Understanding-the-Needs-of-ageing_consumer_report.pdf
Wunsch, Nils-Gerrit. https://www.statista.com/statistics/1284647/plant-based-food-market-in-the-united-kingdom-by-category/