Changing demographics and powerful social trends are dramatically transforming the workplace and the marketplace. These changes are shifting behaviors and consumption patterns in profound ways. Only organizations that understand these underlying trends (and the opportunities inherent in them) will be able to retain and grow their market shares and bottom lines over the long term. We see three major themes shaping our economy and the commercial landscape: The female economy (the growing human and financial capital of women); the “agequake” (the aging population and the growing commercial power of mature customers); and the Millennials (a generation that wants to do “good work” and make a difference in the world).
The Female Economy – The female market represents a commercial opportunity equal in value to that of China and India combined. Women have become a commercial and financial force to be reckoned with, yet many companies do not have a winning strategy when it comes to this important market segment. Women are the primary shoppers and make majority of consumption decisions of households (Catalyst, 2013). The way products are developed and marketed will increasingly reflect this fact. We believe the female economy will contribute to leading the world out of the economic recession and that companies that effectively cater to this market segment will stand to benefit more than those that do not.
The “Agequake” of Mature Consumers – People are living longer, staying healthy longer, working longer and are wealthier in their senior years. Increasing longevity and lower birthrates means that the fastest-growing consumer group, with up to 30% of the spending power, will be over the age of 60 for the rest of this century. As people live longer, the implications for marketers, retailers and manufacturers will be dramatic. These dramatic changes, which some have called an “agequake”, require a paradigm shift in the design of products, stores and services as these older shoppers have very different needs. Businesses have largely ignored the requirements and desires of older people in the way they develop their products and services, and few companies make serious attempts to cater to this commercially attractive market segment. We believe that companies that manage to solve the many difficulties (read: opportunities) posed by this powerful market segment will win and retain the loyalty and the dollars of this market.
The Millennial Generation – The Millennial generation encompasses the youngest generation at work. It is comprised of individuals who are ambitious and not only have high expectations for themselves but also for those around them, including their friends, families, communities and brands. They are looking for more than employment: They want and are increasingly vocal about demanding jobs that are socially meaningful. They trust companies that strive to have a positive impact on society. Millennials are different from other market segments. They have been shaped by world events such as 9/11, Hurricane Katrina, Arab Spring and Occupy Wall Street and, as a group, have developed a strong social conscience, amplified by technology. They communicate differently, distrust marketing and prefer peer recommendations. They love brands that help them express their own uniqueness and their care for the world around them. They care just as much about what a brand stands for and how it lives its values as what it does to help them. We believe that companies whose values and products appeal to the Millennial generation can develop a sustainable advantage, both in terms of attracting the next generation of consumers and in terms of attracting the best workforce.
We believe that trends such as these are both inevitable and irreversible, and represent an enormous opportunity.