The Changing Consumer Landscape
As we approach the mid-point of 2008, both the American and Global consumer landscape is changing at an unprecedented rate. One of largest demographic shifts affecting consumerism in the near future is the oft discussed but seldom acted upon aging global population. The numbers are staggering, yet many consumer product manufacturers refuse to see the affects that an aging population will have on their businesses.
Consider this from a report this year on population growth by the Department of Economic and Social Affairs of the United Nations: “Over the first half of the current century, the global population 60 or over is projected to expand by more than three times to reach nearly 2 billion in 2050. By then, 33 countries are expected to have more than 10 million people 60 or over, including 5 countries with more than 50 million older people: China (437 million), India (324 million), the United States of America (107 million), Indonesia (70 million) and Brazil (58 million). The older population is growing faster than the total population in practically all regions of the world, and the difference in growth rates is increasing.”
And continuing from the report: “During the last 50 years, the median age of the world’s population increased by only about 3 years, from nearly 24 years old in 1950 to nearly 27 years old in 2000. Over the next half century, the increase will be approximately 10 years. By 2050, half of the world’s population is projected to be more than 36 years old.”
Stop for a minute and think about what it’s going to mean to have that many older people living on the planet. Think about the kinds of products and services people 60 and older are likely to want – and more importantly, what they’re absolutely going need. Given the fact that the overall median age of the entire global population is also increasing dramatically, it’s easy to understand why tweens, teens and twenty-somethings will no longer rule the day for the electronics, cosmetics and clothing industries, and why those industries had better be thinking about the nature of the marketing messages they’ll be delivering in the future.
If these demographic shifts weren’t enough to get you thinking about the products and services your company should be developing or re-designing. Take a look at what’s happening with the gender shift in jobs. From last November through this April, American women aged 20 and up gained nearly 300,000 jobs, according to the household survey of the Bureau of Labor Statistics. At the same time, American men lost nearly 700,000 jobs. If that makes you think that the fortunes of American men are on the decline and those of American women are on the upswing, who’s to say you’re wrong?
What's going on? Simply put, men have the misfortune of being concentrated in the two employments sectors that are doing the worst — manufacturing and construction. Women, on the other hand, are concentrated in sectors that are still growing, such as education and health care.
Unfortunately, even the situation is actually less good for women than you might think. While they're getting more jobs, their pay is stagnant. In addition, most share households—and bills—with the men who are losing their jobs. It’s sad but true: the "female" economy can't stay strong for long if the "male" economy weakens too much.
The troubles for the American male worker, while exacerbated by the current slump, are hardly new. The manufacturing sector is in long-term decline, and construction has a history of going through repeated cycles of boom and bust. Meanwhile, women are graduating from college at higher rates than men. According to Peter Coy, writing in the may 8, 2008 issue of BusinessWeek, some analysts even argue that men are less suited than women to the knowledge economy, which rewards supposedly female traits such as sensitivity, intuition, and a willingness to collaborate.
Whether you’re in the durables, non-durables or consumables industries, if you haven’t started yet, it’s time to begin asking yourself and your team some critically important questions. Are your products’ features and benefits gender specific in terms of what they offer men versus what they offer women? Have the been designed in ways that make them age specific in what they offer a 15-year old, a 30-year old or a 65-year old? Are your marketing messages crafted in such a way that makes them appealing to women or to middle aged 40 somethings or to the larger than ever elderly population? Do you understand the female consumer and the far-reaching effect she has on your business and the world around you?
These changes in the female demographic are far-reaching in terms of the future of consumer products and services. For what experts say is probably the first time, more American women are living without a husband than with one, according to a New York Times analysis of census results. In 2005, 51 percent of women said they were living without a spouse, up from 35 percent in 1950 and 49 percent in 2000. Coupled with the fact that in 2005 married couples became a minority of all American households for the first time, the trend could ultimately shape social and workplace policies, including the ways government and employers distribute benefits. Several factors are driving the statistical shift. At one end of the age spectrum, women are marrying later or living with unmarried partners more often and for longer periods. At the other end, women are living longer as widows and, after a divorce, are more likely than men to delay remarriage, “sometimes delighting in their newfound freedom”. (New York Times, Sam Rberts, January 2007)
While the current population here in the United States undergoes these changes, what about other shifts new immigrants will bring to this country? Our families are getting smaller – with one vital exception. “Compared with those of Europe and Japan, the U.S. population is at the same time younger and more colorful because of the continued arrival of immigrants and their higher-than-average birthrates. Of the 100 million Americans who will join us in the next 37 years, half will be immigrants or their children. In the next few decades, 97% of the world's population growth will occur in the developing world; the U.S. is the largest developed country in the world that is still growing at a healthy clip. That matters, strategically, economically and politically, as developed countries try to maintain their services, their militaries, their economic strength. If there is already a gap in energy and optimism between the U.S. and Europe, it looks likely only to widen in the next generation.
With all these factors in play, what does this mean for consumer product branding, marketing and development?
There is no one simple answer. Keep in mind that no two companies, no two brands, no two markets, and no two consumers are exactly alike. Here are four major areas you can concentrate your efforts on to insure that you are addressing the changing consumer landscape.
You and your team can:
1) Revaluate your current product lines, marketing messages, packaging and merchandising as they relate to the consumers you target.a. Just one example: consider the biology of aging eyes. If you’re not paying attention to issues of print size and style and to older people’s slower reactionary time for light adjustment, you’re missing the point.) In short, pay attention and respond to the various needs of the changing consumer landscape. Otherwise, your solutions will seem dated and un-caring, and there’s nothing less satisfying to the needs of aging consumers than that.
2) Re-address the traditional marketing mix as it specifically relates to your target audience
a. Product: How do your products relate to consumer needs and wants by age, gender, and geography?
b. Pricing: Do you have varying levels of product quality and pricing to address affluent seniors as well as new college grads?
c. Promotion: Evaluate your advertising, sales promotion, publicity, personal selling, and branding and refers to the various methods of promoting the product, brand, or company. Keep in mind that today’s seniors do not want to be portrayed as old and today’s youth are far more sophisticated than ever before.
d. Placement (or distribution): Evaluate the channel in which your product or services is sold (e.g. online vs. retail), which geographic region or industry, and to which segment (young adults, families, business people) you want to sell. To reach these diverse and changing consumers you may need to reconsider your channels.
3) Re-examine your current brand position and ask the hard questions
a. What makes your brand unique in today’s marketplace?
b. What does your brand stand for to a wide demographic (20 year olds, 40 year olds, 60 year olds, men, women, immigrants, married, singles)?
i. Are you having a conversation with all of them?
ii. What type of conversation are you having with them?
1. Genuine dialogue (having a conversation)
2. Technical dialogue (explanations of things)
3. Monologue disguised as dialogue (talking at them)
c. Who do you want to have a conversation with?
d. Who do you want your consumers to be?
e. What does the brand want to be in the future?
f. When stakeholders think of your brand, what first comes to mind?
g. What emotional benefits does your brand offer to the target audience?
i. How does the product make them feel?
ii. What positive feelings do the your consumers get from your brand?
h. What rational benefits does your brand offer to the target audience?
i. What does the product provide for the stakeholder?
ii. What key things does your brand help a consumer do?
i. What functional benefits does your brand offer to the target audience?
i. What is the service the brand offers?
ii. What are the Key Product Features?
Through a thorough and objective analysis of your consumers, products, marketing mix and brand you can gain new insight into your core consumers and develop the roadmap for the future of your business.
Tom Feeheley is the Vice President of Consumer & Market Insights and Strategy here at Proteus. Tom is a senior consultant to a wide variety of major consumer products companies. A senior executive for many years with the Stanley Works, Tom was also an executive with Fitch Worldwide and Design Continuum.
Tom manages and consults on both major project initiatives and new product launches for Fortune 500 corporations, start-ups and venture capital turnarounds. He works with consumer product companies like Coca-Cola, Timberland, Sprint, Johnson & Johnson, Dewalt, Hallmark, Rubbermaid, Smith Kline Beecham and others.
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