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.  

McKinsey: A progress report about the deleveraging process

Trend Observation:  Today’s newsletter from McKinsey takes a look at consumers’ progress in pairing-down their debt, a process widely known as deleveraging.  Click here to see the story.

Marketing Implications:  According to this analysis, consumers in the U.S. are getting a handle on their debt faster than some other parts of the world.  However, the study indicates that roughly 70% of mortgage debt and 80% of this deleveraging has come from default.  In other words, much of this “progress” has come from lenders writing-off the amount, rather than debtor’s paying-down the balance.  Further, up to 35% of defaults could be described as “strategic decisions,” where the debtor elected to walk away from a financial obligation.

The McKinsey paper seems to suggest that our deleveraging process will continue into the middle of 2013, but it might be over-simplifying the situation to suggest that means our storm of credit issues will be over.  Just because a consumer has little or no outstanding debt on their personal balance sheet does not necessarily make him or her a good risk; it could mean that someone else had to write-off an obligation that consumer once held.  If you sell big-ticket items where some form of credit often facilitates the purchase, this matters to you… and it makes qualifying your customers more important than ever.  (A process that can begin with the marketing message you create.)

Mike Anderson, for The Marketing Mind consumer trends blog, 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.  

Asians surpass Hispanics as fastest growing immigrant group

Trend Observation:  Recent research from Pew is getting a lot of coverage this week, as it announces a shift in the origin of Americas greatest immigrant group.  According to the report, that is because of an influx from Asia, but also a decline in Hispanic immigration… which is the result of efforts to slow the flow of illegal immigration along U.S.-Mexico border, as well as the number of immigrants heading back to Mexico in the face of a challenging U.S. economy and employment outlook, as well as more stringent immigration law enforcement.  Click here to see the text of coverage that was provided by CBS News last night, and click here to see a supporting video interview (video pre-roll required).

Marketing Implications:  Whether in terms of net worth, housing status, employment, family composition or ethnic diversity… the face of America is constantly shifting.

Is your neighborhood (customer base) shifting, too?  Are you shifting with it?

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

More ethnic products offered at the supermarket

Trend Observation:  An article from today’s Supermarket News indicates that more grocery store meat cases are filled with products that reflect a consumer base with greater ethnic and cultural diversity.  Click here to see the full story.

Marketing Implications:  Does your target customer look the same as they did ten or twenty years ago?  Does it claim the same national origin as it may have back in the 90s… or even earlier this decade?  The composition of the U.S. population is changing.  If that is also true in the community or neighborhood you serve, what are you doing to facilitate new tastes?  (That’s not just a question about groceries.)

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.

How to respond to trends and opportunities

Observation:  This week’s Springwise.com newsletter delivers on their reputation for reliable business ideas.  In this case, there are three examples of business ideas which respond well to emerging or important trends.  The first is a smartphone that detects radiation, which comes out of Japan in response to greater anxiety about that issue in the aftermath of the tsunami and resulting nuclear tragedy of last year.   Capitalizing on peoples need to know now, the Tim Horton chain in the United Arab Emerates prints the most recent headlines on the sleeve that insulates a customer’s coffee cup.   Respecting the more diligent behavior of today’s consumers, a hotel in London working with a furniture partner to facilitate a “try before you buy” campaign.  You can own the furniture in your hotel room.  Click on any headline to see that particular story, or click here to see the most recent Springwise.com newsletter for yourself.

Implications:  It’s not enough to be a trend watcher.  One must ask how emerging trends can be exploited for the happiness of your customers and the profit of your company.

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

Increasing focus on the obesity epidemic

Observation:  A story from Marketing Daily this week explains how the Disney companies plan to limit junk food marketing in media assets that serve youth audiences; the announcement was made in Washington with First Lady Michelle Obama on hand (click here to see that story).  And last week, a firestorm debate started with New York City’s mayor Michael Bloomberg suggested restricting the sale of super-sized softdrinks (click here to see one of the stories published by the New York Times on that issue).

Implications:  There seems to be growing momentum behind the idea of healthy living.  Does your company offer a product or service that fits into this strengthening trend?  Should you consider adding one, or altering your current menu in a way that the consumers you serve are given more healthful options?

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

For rent: The American Dream

Observation:  Once upon a time, the idea of an American dream revolved around owning a home, a yard, and a white picket fence.  But a story in today’s USA Today suggests that the American dream is not purchased, but rented, for more and more American consumers.  Click here to see the story.

Implications:  Beyond impacting the way builders might design and sell their neighborhoods (selling to investors rather than individual owners), this issue could impact a lot of different categories, from home improvement to home furnishings and everything in between. 

But beyond the obvious categories, this phenomenon might even impact things like general retail (groceries and discount stores) and services (banks and dry cleaners).  After all, renters are generally more transient (they move more frequently) than owners… so the long-term relationships that might exist when customers are anchored by ownership could be impacted.  The marketing objective of attracting new customers might become more important than ever in markets where rental housing is significantly higher.

What other consequences can you think of in a world where more people are renting their American dream?

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

Is bartering making a comeback?

Observation:  A story in today’s Dallas Morning News suggests that the age-old practice of bartering could be making a comeback.  The full story is available by clicking here.

Implications:  Speaking at a home furnishings conference a couple of weeks ago in New Orleans, I mentioned the concept of C2C marketing; where consumers try sell furnishings they already own before (or after) buying the set that will replace them.  There were a lot of heads nodding in agreement when I asked if people had noticed that behavior in their stores.

Craig’s List and e-Bay make it easy for folks to sell and recycle property.  But might there also be an increasing trend toward trading services, too?  We’ll have to watch.

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

Consumer experiences on the web are improving

Observation:  Consumers are having more favorable experiences when shopping on the web, according to this story from today’s Marketing Daily.  Click here to see it.

Implications:   What this means, of course, is that your company’s website is never finished.  About the time you think it is, other companies have raised the bar with regard to the services, shopping and experiences consumers should expect when they go online.

The best way to decide what features to offer on your website?  Talk with your consumer, and understand them better than any of your competitors.  Know what they hope to accomplish when they go online… and deliver on those needs better.

You’ll never know everything there is to know about digital marketing (and when you think you do, it’s changing under your feet).  But by focusing on your customers, your digital strategy can deliver what matters most… to your customers, and thus, to your company.

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

Survey research is not getting easier

Observation:  Today’s Research Brief provided a summary of findings from the Pew Research Center about the challenges involved with building truly unbiased public opinion research.  On the list of challenges:  Greater difficulty contacting prospective survey participants, and lower participation rates, overall.  Click here to see the Research Brief, or to see the Pew Research Center report, click here.

Implications:   Granted, this story focuses on public opinion research, but the findings here serve as a canary in the coal mine of consumer research.  One of the reasons survey respondent rates are going down, in my opinion:  Everyone seems to be doing a survey, and many consumers are suffering from research fatigue.  It seems that every time I buy anything or dine anywhere, the cashier circles a website on the receipt where I can take a survey for the chance to win a gift card or the like.

This is important, because it is critical for companies to acquire the input and feedback of the customers they serve.  But as the Research Brief story indicates, it might be more important than ever to have a back-up source (or several) for information, beyond the simple survey.  Shopper intercepts (both in-store and online)?  Simple observation?  Focus groups?  Interviews?  More refined analysis of your sales data?  Secondary (subscription) research?

In what ways might you gain—or retain—the accurate input of your customers, with regard to their preferences, priorities and purchasing motives?  Certainly, this much is true:  When the right chance to conduct research is available to you, do not ask one gratuitous, unimportant question.  Every response matters, so make every question count!

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

UPDATE: The implications of higher debt without completing higher education

Observation:  Two weeks ago, I posted a story about the higher debt load required of people who pursue higher education (click here to see “An Educated Risk.”)   Today’s Washington Post considers that issue from another perspective:  People who pursue but do not complete their higher education; ultimately, the problem of having huge debt is compounded by the fact that they do not have the degree that could lead to a higher-paying job.  Click here to see the Post story.

Implications:   One must wonder whether we are approaching a tipping point, of sorts; one that imposes adjustments to the way college educations are sought, delivered, and paid for. 

This may not seem like a consumer-trend issue, at first glance, but I think it definitely is one.  For decades (perhaps centuries), there has been a close correlation between education and future earning power.  If an economy is such that less educated people are likely to earn less money, a fundamental shift in consumption is likely to occur if large numbers of people decide college is either financially out-of-reach, or not worth the risk.   

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.

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.

An educated risk: Higher ed requires higher debt

Observation:  Last weekend, the New York Times published an in-depth story about the rising costs—and tremendous loans—many students are having to consider when pursuing a college degree.  Click here to see it.

Implications:   Deep in the story, these writers compare the current student loan crisis to the mortgage bubble… not because it holds the same potential to harm our greater economy, but because of the “education at any price” mentality that has prevailed in recent years, and because many students fail to realize the long-term consequences of tuition debt.

As I finished this story, I was left with several questions.  Is the U.S. at risk of a downgrade, in terms of its leadership position in education?  What kinds of jobs (indeed, what kind of an economy) await the less educated working population?  Will the academic world correct itself, creating more schools that focus on a specialty and fewer that offer deep programs in all subject categories?

This is a category that seems to be poised for a shake-up.

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.

Why automotive seems to be trending toward an even more robust recovery

Observation:  A story from Bloomberg explains the three fundamental reasons that automotive seems to be on very solid ground right now, and moving even stronger.  Stated simply, it’s an improving economy, pent-up demand, and loosening consumer credit.  But if you like, you can click here to see the full story.

Implications:   I’m not sure this list is any different than a company in any big-ticket category might share. 

When headed into a recession, it’s important to know when to pull back on expenses.  But it might be even more important, in terms of timing, to know when to get more aggressive when it comes to marketing.

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

The trend of “Power to the People” continues

Observation:  One mega-trend we’ve been talking about for years is something we refer to as “Consumer Control.”  Essentially, it is the acceptance that consumers dictate the terms of the relationship, whether you work in products, services, retail or wholesale.  Pervasive Technology has empowered the consumer to make decisions that they once left to a vendor or service provider.  This, combined with increased competition in the wake of the Great Recession, has contributed to a power shift, in which the consumer wields tremendous control.

This trend was reinforced by an article in this week’s Iconoculture newsletter.  Click here to see it. 

Implications:   Do you serve customers?  Or collaborate with them?  Do your customers want to be call the shots, or do they hope to receive full service... or both?

[Note: For more stories about Consumer Control dating back to April 2008, click here.  For stories from the Elm Street Economics consumer trends blog that are related to Pervasive Technology, a contributor to the trend of Consumer Control, click here.]

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

Financial: Banking on lower-income customers

Observation:  A recent story from the New York Times explains how some major banks are offering check cashing services, short-term loans and other services.  In addition to steep fees that allow the banks recapture revenue that was lost during post-recession banking reform, the services are often designed to help banks re-capture low-income consumers they had previously overlooked.   Click here to see the story.

Implications:   This blog has often referred to a cohort of consumers called, “the un-banked.”  Often, the people who fit into this group are simply younger consumers; those who might have an account or two with a bank, but who do not have a substantial relationship with their bank due to automatic deposit, automated or online bill paying services, etc.  (Perhaps it would be more accurate to say they have a bank, but not a bankER.) 

Another segment of the un-banked cohort was simply composed of lower-income consumers; those people who might not have the funds to invest in an IRA, money market or other investment account, those without the dollars to deposit in a significant savings instrument, and without the impressive credit history that stringent lending rules might require.  For years, banks were courting more affluent customers, and the un-banked were left to fend for their financial needs with check-cashing services and payday lenders.

It is worthwhile to note how times change.

Are there prospects and customers in your business that are being taken for granted as “secondary?”  Don’t get me wrong:  There is no rule against that, and I can make several arguments in favor of that.  But one might ask whether there is any scenario or shift that might alter the profile of your ideal target customer.  Are you continually talking with customers and monitoring industry trends so you can better anticipate such shifts?    

[Editor’s note:  For more on the un-banked, see these postings from July 2010, and April 2010.]

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