The second influence is more personal. Its impact is more predictable. And, unlike the uncertainty of where technology will lead us, long-term planning is the key to capitalizing on the opportunities it brings. What is it? Over 90 million North American Baby Boomers bearing down on every segment of our economy. The impact of this demographic shift will revolutionize every business endeavour. Understanding its character, and positioning (or re-positioning) a business in the path of profitability requires unconventional business planning.
Where we are going
Demographics are a key factor in shaping economic life. The growth and lifestyle of the population determines how dollars will be spent in the key sectors and services within a given environment. Obviously the more people consuming similar products has an impact on supply and demand.
Traditionally, marketing strategies targeted the 18-44 demographic but that is about to change. Instead of buff bodies and fast food, advertising will reveal deep wrinkles and grey hair as a mushrooming generation of consumers arrive at retirement age.
“’Age Power’ will rule the 21st century,” writes Ken Dychtwald in Age Power: How the 21st Century Will be Ruled by the New Old, “and we are woefully unprepared.” How big is the impact? Consider these statistics. Between 2002 and 2010:
• The number of people between 18 and 44 will decline by 1%.
• The number of people aged 55 and older will increase by 21%.
• And here is the ultimate marketing landslide the number of people between 55 and 64 will increase by 47%!
The over 60 crowd currently makes up 20% of the population, up from 12% in 1950. They are on the way to forming almost 1/3 of our population. This demographic shift carries with it lifestyle trends that shape consumer spending. A little more than half of this demographic are women, whose increasing power in shaping business has barely begun. Such a critical mass of older women, with a tradition of rebellion and self-determination, has not occurred before in history.
This demographic is reaching peak spending years with money in their pockets. But even their accumulated wealth pales compared to the pot of gold sitting in their parents’ hands, estimated to be over $1.2 trillion in Canada alone. Their sheer numbers and spending power will put unforeseen demands on consumer goods and services, housing, investments, education and health care.
Harry S. Dent, in his book, The Roaring 2000’s states, “How and where we work and live is about to change more drastically than at any time in our history due to the convergence of the mainstreaming of the Internet and other technologies and the peak spending years of the aging baby boomers. This will result in nothing less than the greatest boom in history and an unprecedented opportunity for investors and entrepreneurs, great buys in real estate, and a wealth of high-quality lifestyle choices for the savvy people who anticipate these changes.”
Businesses would be well served to prepare for this massive shift now by developing a mindset and action plan to position themselves for profitability rather than bankruptcy.
Trends to watch
Back in 1992, Faith Popcorn dropped a bomb in the middle of conventional marketing thinking with her best selling book, The Popcorn Report, that documented her extensive research on boomer demographics, their lifestyles and predictable trends. With the sequel, Clicking, co-edited by Lys Marigold, they presented compelling evidence and a track record of accurate trend watching, identifying lifestyle choices that Boomers will make, as they grow older. These range from the predictable – the trend to healthier food choices and exercise, to the more subtle like cocooning – the desire to stay at home and build cozy environments.
Trends attract multiple business opportunities. Cocooning, for example, has been a boom for businesses that deliver convenience to the home. Blockbusters, Pizza Delight, Merry Maids and Nutri-Lawn are just a few businesses catering to the opportunity. For a business startup, knowing which trends will influence the business and how to position the business for maximum exposure is critical information for successful planning. For existing businesses, rethinking and re-positioning the business for long-term staying power is essential.
David Foot, author of Boom, Bust and Echo writes, “We better learn to deal with the boomers, because they’re not going anywhere anytime soon. Anyone looking to take advantage of the situation right now must ask themselves, ‘What do people in their 50s like to do?’ Anyone can be a successful entrepreneur by looking at what someone in their 50s wants and needs in life, like financial planning services, travel, safety and above all, quality. They want quality and they’re willing to pay for it.”
In the same way that the business community was forced to re-think its positioning in response to the big box stores, businesses will need new marketing strategies to be on the leading edge of this demographic shift. Understanding future trends and capitalizing on their opportunities should be a key management activity.
Below are just a few of the major trends that are gathering momentum and each one attracts unlimited business opportunities:
- Wellness and Health – There is a growing awareness that a balanced lifestyle can add generous years of healthy living and increase the quality of our lives.
- Cashing Out – Tired of unfulfilling careers, Boomers are leaving the corporate scene and championing entrepreneurship. Home business, small business and the virtual office re-imagine the workplace.
- Pleasure Seekers – Tired of the mass produced, we seek small indulgences and pay dearly for them, i.e., gourmet coffees, handmade chocolates, estate wines, candles, pets and specialty foods to name a few.
- The Good Old Days – Nostalgia for anything old, from ice cream parlours to PT Cruisers to sporting events. The recent Classic Hockey Tournament in Edmonton is a prime example.
- Save our Environment – Rethinking resources and discovering a social conscience opens avenues of participation for businesses in areas such as recycling, restoring and renovating.
- Female Think – Women power is forcing a shift from the traditional goal-oriented hierarchical models to a more caring and sharing approach. Women consumers (and women in business!) carry clout.
- Cocooning – We like our nests and spend billions on feathering them. Home theatres, exercise rooms, hot tubs, renovations, security, landscaping, interior decorating… Home Depots’ profits soared 20% last year.
As the demographic moves upward, the trends gather more and more momentum – and consuming power. The trends are an essence of what boomers everywhere are thinking, wanting, buying and dreaming about and what they will be looking for in the future.
Impact on the print industry
The graphics arts industry, still in the midst of a technological revolution, will continue to see their traditional customer base erode. Savvy computer users will bypass high-end publishing packages – and their steep learning curve – in favour of inexpensive, off-the-shelf software. Easy to use templates, with click and drop design, will give publishing access to more and more consumers. Cost conscious businesses will seek ways to create print materials in-house or outsourced to professional service firms.
Smaller print shops should develop markets that cater to the specific needs of the home office and small business sectors – a trend that’s becoming more and more attractive. But shop owners will have to re-think their positioning strategy. Competing over price, rather than wowing them with service, will leave few players standing.
Remember when photocopying meant a trip to the local print shop? Short-run color printers, parked next to home and business computers, will become the new standard. Inkjet and laser technology will deliver full process printing to everybody. Internet-based print companies will convert digital files to printed paper and have them delivered overnight by FedEx. Getting online – and doing it right – will be an essential strategy for print shops that want to stay active in the local market. Providing ancillary products and services, such as design and publishing tutorials, supplies, fulfillment and specialty services, will be key business strategies.
The shift in demographics will provide opportunities to launch niche magazines, booklets and newsletters catering to new interests and markets. However, a consumer backlash to wasteful flyers, free distribution newspapers and other print materials will champion a growing concern for the environment. Today the emphasis is on recycling. Tomorrow will bring a new approach – driven by breakthrough technologies. Positioning your business as an advocate of change, rather than fighting for tradition, will require thoughtful planning.
Business planning is fraught with uncertainty when traditional marketplace assumptions are no longer valid. Businesses that read the trends accurately can reposition themselves for maximum profitability.