It’s important to keep an eye on how your customer base evolves. This is because changes in the people who buy your products can affect how much they spend and what they choose to buy.
In this article, we unpack some of the main demographic trends currently happening in Australia. Understanding these changes can help you better understand your customers' motivations and behaviours. This in turn can help you boost the customer experience.
Before we get into the demographic trends, it’s useful to understand the names commonly used for different generations, and the ages of people in these groups. Generations we cover in this article are Baby Boomers, Gen X, Millennials and Gen Z. Below are the generations by year of birth, and the age range of people in 2024.
Learn more about marketing to Gen Y
Learn more about marketing to Gen Z
Here are 5 key demographic trends in Australia that are reshaping the landscape for small businesses.
Millennials have overtaken Baby Boomers as the largest generational group in Australia. That's according to the 2021 Census. The Australian Bureau of Statistics (ABS) defines Millennials as those born between 1981 and 1996. Millennials are currently in their late twenties to early thirties. This is often the age when people go through major life transitions. For example, completing study, establishing relationships, getting married, having children or buying a home.
Australia’s population is growing older. The Australian Institute of Health and Welfare's Profile of Australia's population shows the median age increased from 33.0 years to 38.3 years in the last 20 years. The percentage of the population aged 65 and over has also increased. It has gone from 12% to 17% in the same period.
Australians have always been a diverse mix of cultures and languages. The 2021 Census found that almost half (48.2%) of Australians have a parent born overseas. Over a quarter (27.6%) reported a birthplace overseas.
The 2021 census also revealed the largest increase in country of birth, outside Australia, was India. India has passed China and New Zealand to become the third largest country of birth behind Australia and England. The number of people who use a language other than English at home has increased by nearly 800,000. Mandarin continues to be the most common language other than English used at home. Nearly 700,000 people use Mandarin at home.
The Australian Institute of Family Studies (AIFS) says young people are increasingly living with their parents. The proportion of young adults living with their parents has steadily increased over the past decade. The AIFS says reasons include housing affordability, student debt and changing social norms.
ABS analysis shows a narrow distribution of household wealth. The wealthiest 20% of the population owned 63% of total household wealth in 2019–20.
The ABS also revealed household debt has also increased. Three in four (75%) households had debt in 2019–20. Of these households, 30% were servicing a total debt three or more times their annualised disposable income. This is a statistically significant increase from 2009-10 (24%) and 2017-18 (28%).
Customer demographics are big picture trends that highlight changes in our society. Yet they can also be important for businesses seeking to appeal to customers and engage with customers in new ways.
In a competitive market, businesses need to stand out by providing personalised customer experience. This includes understanding individual customer needs and preferences. Businesses should also understand their customers' buying behaviour and spending potential.
Each generation has its own buying and spending habits. While it’s important not to make assumptions or stereotypes, these ‘typical’ habits can give you valuable insights.
For example, Gen Z consumers are typically not impulsive spenders. Instead, they’re deliberate with who they shop with and when. These younger consumers have grown up with the internet. They’re used to having easy access to information and choices. They research and select products extensively, so it’s important to ensure your website has helpful FAQ pages and effective customer service options. Gen Zs are also willing to delay purchases until they need them. They may also hold out until they can find a better deal.
It's not only the age of your customers you can consider. Different cultural groups may have unique preferences, values and beliefs. These can influence their purchasing decisions. Tailoring your products, services or marketing strategy can help you connect with these groups and help deliver a better customer experience.
Discover 4 simple ways to improve your customer experience here.
Millennials may now be the largest generation, but older Australians remain a valuable customer segment. As a generation, they’re financially stable, and many are still active in the workforce.
If you’re looking to connect with these customers, consider if your online presence and digital marketing is up to scratch. This is because, contrary to stereotypes, many in the 55-70 age group are digitally savvy. According to the Telstra Tech State of Play research, 54% of over 65s (and 73% of 55-64) use online information to help them decide what to buy, even when they’re shopping at a physical store. This group also has high expectations of a business’ online presence. Over half (55%) of over 65s are less likely to buy from a business if their website appears out of date. To effectively engage this customer group, it’s important to regularly maintain your businesses website and include essential web design elements.
With the rise of eCommerce, small businesses must invest in technology to stay competitive. Online platforms and digital marketing can help them reach a wider audience.
The Great Generational Shopping Divide by Azira found 80.1% of respondents shop online. That’s across all generations. Gen Z (62.7%) and Millennials (64.6%) are twice as likely as Boomers to use omnichannel approaches (32.9%). Omnichannel is where shoppers use more than one channel in their buying journey. It is becoming increasingly important as consumers engage with businesses on their terms. Read more about what omnichannel customer experience is, and why it matters.
Social media may be important to you as a way to connect to younger customers. The Telstra Tech State of Play research found half of consumers aged 18-24 are more likely to use social media accounts and advertising to find and choose a business. Learn how to create a social media strategy so you can boost sales with social selling. This customer group is also more likely to buy from a small business because of online reviews.
The more we buy and transact online, the more we share personal data with organisations. Many consumers see value in businesses using their data. The Telstra research found almost 4-in-10 consumers are comfortable with businesses using their data if it's to provide better services, products and experiences.
Yet there’s a trade off. While it’s more convenient, we’re also trusting businesses to keep our data secure. Over 80% of respondents in Telstra’s Tech State of Play research would avoid dealing with businesses if they thought their data would not be kept secure. If you’re wondering where to start, discover 3 simple steps to help you better protect customer data.
Demographic changes are changing what a typical consumer ‘looks like’. And that means buying behaviours are changing too.
Understanding the changing face of your average customer, and how to meet their expectations can help you gain a competitive advantage.
Learn more about how to evolve with your customers [PDF, 480KB] in the Telstra Tech State of Play series.
This article does not necessarily reflect the views of Telstra or its staff.
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