Saturday, June 04, 2005

Retail Trends and the Boomer Convergence

An interesting report on trends in retailing appeared recently in the Christian Science Monitor. In Anatomy of a Shopper, Clayton Collins wrote ...

A push from two demographic dynamos - boomers buying younger (and with more attention to environmental sustainability), tweens and teens buying older and savvier - that will hold purveyors of goods and services to a new level of performance and accountability, experts say.

And that amounts to a big opening for smaller, niche stores that have the flexibility to tweak product offerings in ways that megastores - tied to big-volume suppliers - cannot, experts say.

In both apparel and food, "the most significant growth is happening in the second- or third-tier players," says Paco Underhill, marketing consultant and author of "Why We Buy: The Science of Shopping."

"Some of them are local grocery-store chains, whether it's Publix or HEB in Texas, people who somehow have some sense of local pulse.... Local players can play local, particularly if it's for produce or [other] food products," he says. "They also can provide something that's different."

Consumers appear to be willing to pay for that difference. Price still matters - healthcare, college, and other costs have taken big bites out of many wallets - but it's not as important as it has been.

"There is this other side of a shopper that says it's hard work getting the lowest price every day," says Ms. Corlett. "A surprisingly large minority," 46 percent, of consumers polled by WSL for its recent How America Shops report said that finding the lowest price on goods and groceries was not always a top concern.

And this ...

For many, holistic living also means buying with an awareness of how their purchases affect others. Some cite the rise of the so-called LOHAS movement - lifestyles of health and sustainability - as a sign that mainstream consumers are exhibiting more of that awareness, choosing to do business with firms that demonstrate an awareness of environmental and fair-labor practices.

Here, too, they are willing to pay more, even when doing so is not easy. The core of this values-driven group is comprised of 35- to 64-year-olds, according to the Natural Marketing Institute. Some 60 percent of them are baby boomers.

"They cannot be characterized as wealthy boomers," says Brent Green, who runs Brent Green and Associates in Denver. "When they say they are willing to pay 20 percent or more because of environmental sustainability, that's not necessarily financially convenient."

Nor do they represent a counterculture fringe. "Not when you're looking at 32 percent of all US adults," says Mr. Green, who adds that adding the consumer subset he calls "nomadics" - inclined toward sustainable purchasing but not fully committed - brings the total to some 100 million Americans.

"You wouldn't describe them as necessarily activist in the sense of 'save the whales,' " says Green, "but rather in their purchasing decisions and in their propensity to influence other people."

It appears to me that the Baby Boomers and the Echo Boomers are moving in surprisingly similar directions when it comes to retail trends.

The aging Baby Boomers are (predictably) spending more on health and comfort as they resist the detrimental effects of getting older. They also are reliving their youth by regaining some of the social sensibilities that they held so famously in the 1960s and 70s.

The Echo Boomers are a demographic group that's just as large as the original Baby Boom. What's interesting is that they seem to already be where the Baby Boomers are heading. They're already healthy -- many of them reject the couch-spud lifestyle (this is why television ratings and spectator sports attendance are faltering) and have driven growth in mountain biking, surfing, snowboarding and other active sports. They also eat healthy -- look at all the interest in whole foods and veganism. That's why McDonalds is stagnating. The social sensibilities are there too -- American Apparel's success is evidence.

This is important, change-the-world stuff. Big demographic trends like these move the economy for years and propel businesses that are in tune with the trend.

Organic, reusable, low-impact, sustainable, efficient, sweat-shop free, American-made, locally-grown, and in line with local expectations. That's where the market is headed, and that's how you can do "good" for the world as a retailer. Doing well by doing good ... what a concept.

1 Comments:

Blogger Guy said...

Interesting article. Did you see our interview with American Apparel CEO Charney and his views on Echo Boomers?

here on PSFK

4:31 PM  

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