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Sunday, January 29, 2012

Generational Economics: The Age of Acquisition

Marketing Observation:  Generally speaking, the Age of Acquisition refers to the collection of people are between the ages of 18 and 34.  (Therefore, at this writing, we could loosely refer to this group as The Millennials.)  Acquisition is a great moniker for this life stage, because their appetite for consumer spending seems insatiable.

I realize the term “Acquirers” can sound a little cliché, just like so many other terms the advertising industry has invented for itself.  So to fully appreciate the true significance of this group, think about this line of questioning: 

  • Did you own your first NEW car on the day you turned 18?  Did you by the time you turned 34? 
  • Did you have a place of your own by the time you were 18?  Did you by the time you were 34? 
  • Had you filled that place with furniture when you were 18?  34? 
  • Did you have a spouse or significant other by the time you were 18?  But by the time you turned 34? 
  • Did you have children when you were 18 years old?  Did you by the time you turned 34? 

This line of questioning helps illustrate just how little you had at age 18, and just how much you had acquired by the time you turned 34.  That’s why we call it the Age of Acquisition:  People in this life stage seem to be consuming everything in their path.

Not everyone will answer these questions precisely the same.  But generally speaking, at age 18 we’re often born into consumer adulthood with virtually nothing, except that which our parents let us take from home.  And by the time we’re 34, many of us owned at least one copy of almost anything it takes to run a typical household.  (And some stuff you don’t need to run a household!)

In addition to those young adults who will leave their parents home, go off to college and then venture off to start their own life, there is a large and growing segment of young adults that are having difficulty with this move, or are purposefully delaying it.  Often, this hesitation is in response to the post-recession labor market.  Often unable to find a full-time job in their chosen field after graduating from college, many twenty-something adults return to their parents’ home until their income can match the cost of striking out on their own.  Think of them as return-to-nesters.  By the way, this can still be a very attractive target group, as they often earn an income that is not going toward a rent or house payment (if they are living in a home that is paid for by someone else).  That leaves a lot of discretionary income for things like entertainment, clothes, electronics, etc.

Marketing Implications:  Serving people that are in the Age of Acquisition is no small challenge.  Yes, with all the spending they do, one might be tempted into believing “this’ll be easy.”  But adults 18-34 are busy building families (although later than ever), climbing their corporate ladders, and still drawn to engaging in a highly active social life. 

Millennials are doing things differently, right down to the homes they live in.  Where there may once have been a living room, there is now a game room (equipped with at least one game console and a plasma flat-screen).  Where there once was a formal dining room, there might now be more of a social center, which can be used for homework (career or college), entertaining, or board games with the family.  They’ve never known a world without very advance personal computing, and they’re driving the break-neck speed of innovation in smartphones, tablet computing, and more. 

The Age of Upgrades is ready… to spend with companies that have upped their game.

Mike Anderson, for The Marketing Mind consumer trends blog, service of The Center for Sales Strategy.  

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