The irony of the aging Baby Boomer

Trend Observation:  Two interesting (and very contrasting) stories caught my attention today, and both of them were focused on Baby Boomers.  First, USA Today published an article about Boomers that can finally afford the car of their dreams.  The observation is that once parents have emptied their nest of children and paid-down much of the consumer debt, they have more discretion over their income… and more money for toys (click to link).

But then I caught a second story, this one from the Minneapolis Star Tribune, talking about an overhaul of the traffic light system that will accommodate Boomers… who presumably don’t cross the street on foot as fast as they used to (click to link). 

Marketing Implications:  America’s biggest generation (and arguably still the most significant consumer base) is changing.  Does your company, product or service target these consumers?  Are you changing in response to their current life stage?  Boomers are changing in both their physical and financial stature, and those changes are sure to impact their purchasing priorities and preferences.

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

The changing dynamics of the American family

Trend Observation:  Not that long ago—perhaps 40 or 50 years—the stereotypical American family included a father, mother (the two were married), and two or three children.  The unit was celebrated in situation comedies like The Adventures of Ozzie and Harriet, or Leave it to Beaver.  But these days, the idea that all families look like June and Ward Cleaver, Wally and the Beav are far from accurate; things have changed, and not just in wardrobe, vocabulary and parenting styles, but in the composition of the family itself.

Evidence of this shift is difficult to overlook, especially after data started rolling out following the 2010 Census.  (As one example, see this post from the Elm Street Economics consumer trends blog in August, 2010, or the story that it referred to from USA Today.)   But it’s a good idea to check-in, consistently, when information is changing this fast.  So, with help from my respected friends at Scarborough Research, we did just that.   The data set we considered is from Scarborough USA+ 2011 Release 2, and here’s what we found:

Barely one in four U.S. adults describes themselves as “Married with Children.”  Specifically, just 26% of adults describe themselves as being married with one or more children aged 17 or under in the household. 

Just 56% of adults are married, according to the research (without regard to the presence of children in the home), while 85% of adults say they live in a home where two or more adults are present.

In other words, more American adults live in a non-traditional household than in what we used to think of as a traditional family unit.  Just subtract the percent of adults that are married from those who live in a two adult household:  85% - 56% = 29%.   So, more than 29% of adults live in a two-adult household, but are not married… while just 26% are married with children.

Just to be clear, that non-traditional household could be composed of many different relationships.  It could be a male-female couple that is living together but not wedded.  It could be two folks who live together so as to pool their financial resources during difficult economic times.  It could be couples described as gay, lesbian, bi-sexual or transgender.  It could be a single mom with an 18-year-old daughter (in the eyes of the research that is still two adults).  It could be a middle-aged man whose aging mother lives with him.  We don’t know precisely how to define these non-traditional households.   But these estimates make very clear:  Today’s traditional American family doesn’t always look very traditional.

Marketing Implications:  If you sell furniture that’s perfect for the family room… does your message reflect what today’s family really looks like?  If you sell “the perfect family automobile,” does your marketing consider—or even celebrate—the diversity of family styles that are out there today?  Once upon a time, Ozzie and Harriet were presented in black and white.

Today’s family is not.

[Editor’s note:  Our thanks to Deirdre McFarland, Haley Dercher, and Scarborough Research for providing the statistics that inform this perspective.  For more information, visit Scarborough.com, or contact them at info@Scarborough.com.]

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

Generational Economics: Pre-adulthood (Teens and Adolescents)

Trend Observation:  Do you know what the average teenager spends during the course of one week?  Before you settle on a specific number, let me confess that I do not know the answer to that question, at least not as a marketer.  But I do know the answer from the perspective of being a parent.  How much money does a teen spend in a week?  All of it!

In fact, it could be argued that they spend more than 100% of their money.  Because in addition to the income they might generate through a job or allowance, they often spend at least some of their parents’ money, too.  Teenagers are not a wise market to overlook, because the money they have access to could be described as almost entirely discretionary. 

(Caveats and counter-trends:  Many teens are responsible for maintaining their own smartphone contract and paying for their monthly gaming expenses.  Some buy their own clothes, and some even have a car payment.  And post-recession, more teens are helping out with general household expenses when a family has been impacted by job loss.)  

Marketing Implications:  If you’re not convinced just how big the potential is in marketing to pre-adults, just ask some people who sell X-Box or PlayStations, Droids or iPhones, or Abercrombie & Fitch.  In addition to being ravenous about their consumption of entertainment and fun (in-theater movies, theme parks, parties, etc.), they are playing an ever-growing role in procuring goods for the household; grocery and other shopping needs are often delegated to the youth of a household, especially when there is more than one head-of-household that is employed outside the home. 

And by the way, the older-end of this spectrum is also behind the wheel.

Which of your products and services fit into the pre-adult life stage?  Have you found the best ways to connect with these consumers?  (Beyond traditional media, they are fanatics about social networking and micro-blogging; but getting into their group is not always easy and requires both finesse and authenticity.)  And when you think about the life-value potential of gaining customers in their youth… the payoff can be remarkable.    

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

Number of merged households jumped 11.4% between 2007 and 2010

Trend Observation:  Census data published in a story from the Washington Post last night indicates that more than 1 in 6 households across the U.S. are home to more than one family.  22 million households hold combined families or returned family members, which is 18.7% of U.S. households.  The number could include any kind of merge, including return-to-nesters, left-left-the-nesters, multi-generational households, or simply people sharing a place as a means of coping with economic reality.  And adults 25-34 made up about two thirds of the increase.  Click here to see the whole story.

Marketing Implications:  Among those choosing to retreat from tough economic times by moving in with parents or other friends and family, the strategy seems to be working.  According to the story, fewer than 1 in 10 young adults who live with their parents are living below the poverty line (8.4%), when entire household incomes are taken into consideration.  Among this group (co-habitants), the poverty rate would be more than 45% if calculated by individual income. 

Parents, friends or other hosts have helped create a situation where many young adults who would be otherwise impoverished are creating a situation where the guest can re-group, stash some cash, or afford more discretionary spending like out-of-home dining, entertainment, or asset acquisition (whether that means a car, clothing, home furnishings for the day they move out, etc.)

“I live with my parents” might not be a comfortable statement for the proud young adult to make.  But it’s setting them up to live a little, while they become more financially comfortable to set off on their own.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Family first, formal commitment later

Observation:  Sunday’s Star Tribune features a story about many couples that are deferring their formal wedding and marriage, but starting a family now.  Click here to see the full story from the Minneapolis paper.

Implications:  I’ve been revisiting some research about how the family dynamic in America is changing, and plan to publish those thoughts very soon.  But this story us yet another anecdotal perspective on how traditional families might not be behaving all that traditional anymore.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Role reversal: Men pursuing jobs once thought of as belonging to women

Observation:  This morning, the New York Times published an interesting article on gender role-reversals in the workplace.  But also important, the story suggested a shift toward a more modest “American dream” since the 2007-2009 recession; one that is focused on simply staying ahead of financial commitments, and having enough left over to go out for some dinner and entertainment once-in-a-while, take a modest vacation once a year, or otherwise enjoy occasional “small indulgences.”    (Not necessarily a big house and fancy cars.)  Click here to see the story.

Implications:   “Inverted expectations” is how this Times story refers to what we’ve called, “Reconciliation.”  Worth noting, as we’re seeing more and more evidence of this shift that we called out several years ago.

If men are opting into more roles that were traditionally held by women, what does that mean to the family dynamic?  Are women more likely to bring home the “breadwinner” paycheck, and men more likely to provide the “additional income?”  If she carries a greater income burden, is he assuming a greater role in such household responsibilities as childcare, housekeeping, and laundry?  If these kinds of changes are happening in the workplace or household… what do they look like by the time those changes walk into your store, dealership, or lobby?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Record numbers of people working after age 65

Observation:  The great recession of 2007-2009 left many casualties in its wake, not least of which were battered investment accounts and many peoples’ retirement aspirations.  With that in mind—and with so much uncertainty about the future of Social Security and other programs—it was not so surprising to see an article in the New York Times this weekend that explained how many older folks remain in the workforce.  Click here to see the story.

Implications:   Baby boomers have re-defined every life stage as they moved through it.  Why should retirement (or, re-hirement) be any different?

As you think of targeting “career workers,” does the image that comes to mind include people who have gray hare or hassles with arthritis?  As older Americans earn a share of available income that is larger than earlier generations, their needs and preferences could become more and more important to more and more companies.

Does opportunity knock for your business in serving an older workforce?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Millennials as the “unbanked” generation. (Could your category face the same fate?)

Observation:  A story from USA Today this morning builds on the body of opinion that banks are losing significant market share to check-cashing services, payday loan operations and other alternatives to traditional banking.  Click here to see the story.

Implications:   As one reviews the stories we’ve posted about banking at this site, this issue has become a frequent topic and an important focal point as the banking industry evolves.

What kinds of tools or services could banks offer to become more relevant to young adults?  While direct payroll deposit and online bill-pay services have become an important service to young adults… they’ve also reduced the face-time bankers used to get with these customers and prospects.  How could banks begin to re-build a personal relationship with their young customers?

By the way, the impact of this issue is not limited to banking.  More and more life tasks are either automated or performed online as time goes by (consider the way people research, shop and buy things like cars, plane tickets, music, personal electronics, etc.)  Is the product or service you sell subject to this same frustration within the next few years?  How will you respond?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Whites represent less than half of births in U.S.

Observation:  It’s official… non-Hispanic white births accounted for less than fifty percent of babies born during the twelve months that ended last July, according to the Census bureau.  The headline was published by the New York Times this morning, and you can click here to see the full story.

Implications:   Multiculturalism is here to stay, a demographic tipping point that has been long-expected in the melting pot known as US.   50.4% of babies born in the most recent recorded year were of Hispanic, Black, Asian, or mixed-race heritage.  Whites still represent a majority of the population as a whole (at 63.4%, according to the story), but an aging Caucasian population means it is only a matter of time until that is no longer the case.

Much coverage will focus on this moment in the coming years.   

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Are dads the new moms?

Observation:  An essay from the Wall Street Journal explores the evolution of fatherhood in American life, as the dynamics of family continue to change.  It was a fascinating read, and you can see it by clicking here.

Implications:   If you sell to parents, it’s important to understand how the roles of moms and dads have changed over time.  After you read this WSJ piece, you must ask yourself whether you’re seeing some of these changes in your own business.  Is mom necessarily the one buying (or using) traditional products like laundry detergent, housecleaning supplies, or children’s medicine?  Who’s sending the kids off to the bus stop… and who’s greeting them when they come home?

Household composition and family dynamics are important considerations when you’re thinking about your most important customers, regardless of the business you’re in. 

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Grocery business likely to be staffed by Boomers

Observation:  We’ve offered a variety of posts at this site that point to how Baby Boomers are likely to redefine retirement, just as they have reshaped virtually other life stage they’ve lived through.  Yesterday’s newsletter from Phil Lempert chimed-in on the topic by suggesting that Boomers will not only continue to be great customers at grocery, they could be an important part of operations behind the checkout and in customer service.  Click here to see his post.

Implications:   As Boomers do everything they can to stretch their nest egg, expect to see them take modified roles in the labor market for years to come. 

[Note: To see one of our earlier stories about Baby Boomer “Rehirement,” click here (it was offered in September, 2009.  For more on Generational Economics, click here.]

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Changes to health care spending

Observation:   Over the weekend, a story from the New York Times explained that health care spending is down… and more dramatically that the economic effects of the recession can be blamed for.  The article strives to explore a number of possible reasons for the decline; read the story by clicking here.

Implications:   If you sell any product or service that is related to health care, this issue impacts you.  We can anticipate that if the number of patients who are spending has declined—or the amounts they are spending have declined—the field of providers that are competing for those patients and dollars is going to be more heated.

So how can health care providers—and health care marketing—effectively capture their unfair share of patients?  Absolutely.  Start by looking at the product or service from the consumer’s (patient’s) point of view.  Follow the money trail, from consideration to admissions to pre-op to discharge.  As a story from NBC Nightly News suggested over the weekend, you might even look at the ceilings of a hospital room, to see what the patients see as they’re lying in bed!  (Click here to link to that video, or watch it in the viewer below.) 

The patient, above all, wants a successful outcome.  But on that journey, they’d also appreciate some empathy, responsiveness and authentic concern from the physician and support staff.  If you can deliver that experience, and explain your unique selling proposition in advertising (on-air, in-print, online), you’ll likely fare better than other providers who are competing for those same patient dollars.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

NBC News footage:

Visit msnbc.com for breaking news, world news, and news about the economy

Retirement planning, investing, likely to become higher profile issues for both young and old

Observation:  There was an interesting contrast in coverage on the topic of money management and planning for the future in this morning’s newspaper.  First, USA Today explained how Gen Y, generally speaking, is lagging a bit when it comes to financial literacy and personal money management.  Click here to see that story.

A few moments later, I came across a story from the Wall Street Journal that “does the math” and considers the implications of Social Security and Medicare funding that could run dry as soon as 2016, or 2033, depending on the benefits on is entitled to.  Click here to see that story.  

Implications:   The politics of this issue are sure to be given a higher profile in the coming months and years, but that’s not why I bring this issue up.  Consider the implications of an aging Boomer population that will soon be (if not already) drawing on Social Security and Medicare benefits… and a younger Millennial and Gen X population that is asked to pay more to fund these benefit programs at a time when they’re focusing on simply getting their own financial act together.  (In the end, I’m guessing that both an increase in funding and a reduction in benefits is in the cards, if and when Washington seriously addresses this issue.)

Ultimately, retirement planning is likely to be embraced as something each individual must worry about for him or herself, unable to anticipate that a government plan or program will be sufficient either for sustenance or healthcare needs.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Younger women place more emphasis on careers, incomes

Observation:  A study from Pew Research indicates that younger women are placing more importance than ever on having a high-paying job.  The report got wide coverage today; you can click here to see the Wall Street Journal version of the story, or click here to see it as offered by USA Today.

Implications:   The role of women in the workplace began to evolve, en masse, in the early- and mid-seventies.  These Pew Research findings make the case that that role continues to evolve.

My question is, if she is playing a greater role as breadwinner, is he sharing more of the role as household operator?  How do these changes in employment priorities alter the idea of “consumer” at the grocery store?  Doctor’s office?  Car dealership?  Your company?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Talking less but communicating more: How are your consumers using their smartphones?

Observation:  An interview with Ewan Duncan from McKinsey appeared in yesterday’s Marketing Daily, exploring the distinct ways that younger consumers are using their smartphone devices.  Duncan refers to the devices as “digital Swiss Army Knives,” and reminds us that talking on the phone is just a small part of the tool’s value.  Click here to see the story.

Implications:   Duncan’s remarks remind us that digital marketing is not a one-size-fits-all-demographics proposition.  The digital divide is alive and well, not just among those consumers who have or do not have access to computers, iPads or smartphones, but also in the way that different cohorts might use those devices.

Considering the way your most important customers (or prospects) are using their digital devices, is your web presence optimized to fit their technological comfort level?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Millennials: A segment filled with trends and counter-trends

Observation:   Many demographers and trend watchers—me included—have long-held that Baby Boomers are a group too large and diverse to be stereotyped into a single behavioral group.  Likewise, a story in today’s Marketing Daily suggests that there are up to six distinguishable cohorts with the generation we refer to as Millennials.  The article is based on a study by the Boston Consulting Group, and you can click here to see the story.

Implications:   When talking about advertising, some companies will identify their target as Women, Adults 25-54, or some other such over-generalization.  Even narrowing the concept to Boomers, Millennials or another life stage might be too broad.  Often, consumers are defined by a passion, a values system or other criteria.  Putting everyone into a single target group because of the year they were born, exclusively, might not be the best approach.  Age might be coincidental to a group, but it may not always be incidental to a purchase.

What else can you know about the heavy users of the products and services you sell?  Beyond gender, age, or life stage… what matters to them?  What are they worried about?  What gratification would they like to enjoy or what problem would they like to solve through the purchase of what you sell?  Answer those questions, and age will soon become less important. 

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Teen birthrate lowest in history

Observation:   A story in today’s USA Today explains that the birthrate for U.S. teens is the lowest it has ever been.  Click here to see the story.

Implications:   I’ve been doing some intense study, lately, on the changing look of the American family, so this story naturally caught my eye.  In past writings (see below) and soon-to-be-published material, I’m doing my best to understand how the family as we know it is evolving.

One important aspect of this evolution is that more babies are being born to un-married moms.  But this USA Today story suggests that’s not because of unplanned pregnancies among teens; on the contrary.

Any company that sells to families should be abreast of how families are changing.  Stay tuned.

[To see more on the changing family dynamic, see “Welcome to the (non-traditional) family” from August, 2011, and “More on the changing composition of the American Family” from February, 2012.]

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Ally Bank gets behind financial literacy campaign

Observation:   I was struck by an article in today’s Marketing Daily explaining the elements of a financial literacy effort that’s been launched by Ally Bank.  Click here to see the story.

Implications:   Having had the chance to interview several banking executives over the past few years as part of our Industry Insights initiative, I know that one topic that is forefront to the banking industry is relatively sparse presence of young customers.  Here’s what I mean:

Younger customers, at worst, have learned to live and manage their finances without the (consistent) use of a traditional bank.  Banks are now competing with car dealerships for car loans, home improvement stores for home improvement loans, insurance companies and employers for long-term investment options, and check-cashing services and for those times when folks just want a little cash.  Competition is coming from everywhere.

Many younger customers, at best, have automated their banking relationship to the point where no real “relationship” actually exists.  They use direct deposit to manage their paychecks, automatic or online bill paying instead of writing checks, and ATMs as a place to grab a little cash.   The good news:  Banks have created a very cost-efficient operating model that requires little or no human intervention and overhead.  The bad news:  Banking service has become a commodity, rather than a relationship to be built on.

The reason I bring this up?  The Ally Bank effort must almost certainly be aimed at this millennial- and middle-aged consumer segment.  (At least for now, you’re not targeting seniors if you’re using Twitter.) 

Will the next generation of consumers use your company, products or services in the same way the last generation did?  What adjustments could you start making now, for consumers that have adjusted their habits when buying in your category?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

UPDATE: GM re-thinking their approach to millennials

Back in March, we offered a post about how millennial consumers think differently toward automobile ownership than earlier generations.  It was based on a story in the New York Times (See ESE “Letting younger consumers drive,” March 26.)

Additional coverage on the topic was given by today’s Marketing Daily; click here to see the story.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Letting younger consumers drive: GM prepares for a generational shift

Observation:   A recent story in the New York Times explains how General Motors is adjusting to the needs and preferences of Millennials (people who were born between 1981 and 2000).  The lives of people in this group are not as culturally tied to the automobile as previous generations, the story explains, and GM is trying hard to regain relevance.  Click here to see the story.

Implications:   We’ve posted dozens of stories at this blog under the label of Generational Economics; the term we use for how consumer priorities changes as they move through different life stages.  But clearly, this decade’s “18-34 year-old” is not buying the same way that an 18-34 may have in during the 1960s, 70s or 80s.  And that’s not just true for automotive; it is a reality check for restaurants, supermarkets and furniture stores, too.

Is your company, product or service seeing a change in the way young adults buy?  Indeed, is your category changing in a way that response to shifting consumer preferences?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.