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Are you ready for the generational shift

Consumer demographics demand change In order to survive and thrive in today’s marketplace, small business owners must understand and adjust to dramatic changes in consumer demographics. The radically different size, psychology and spending habits of the last three generations has to be factored into new marketing strategies if you want your business to survive.

80 million Baby Boomer consumers are reducing their spending

The Baby Boomer Generation represents 80 million people in a population of 320 million. How they spend or don’t spend their money WILL have a major impact on our economy and the future of your business.

It is well established that modern economies are driven by consumer spending, and that consumers spend less money when their kids leave home and when they reach the age of retirement. That being the case, it’s easy to understand the economic challenge this county is facing when you consider the following:

  • Starting in 2011, the first Baby Boomers born in 1946 started to retire at age 65 at the rate of 10,000 per day. Baby Boomers will continue to retire at the rate of 10,000 EVERY DAY until the year 2029.
  • Also in 2011, the last baby boomers born in 1964 reached the age of 47. This is significant because the level of consumer spending typically declines starting at age 48, when kids graduate and leave college and parents become empty nesters.

With millions of Baby Boomers spending less and less money with each passing day, it’s pretty clear that this phenomenon will radically alter the marketplace. Small business owners must think about how, and with whom, they are going to replace this reduced spending.

50 million Gen-X consumers are emerging as a market force

Gen-Xers typically are well educated and have high incomes. They grew up with single-parent households, cable TV and the emergence of technology such as the Internet and cell phones. They have embraced the digital revolution as their own and use technology to personalize and humanize everything in their lives.

As a group, they view media much differently than previous generations. In every media category, Gen-Xers have pushed the line toward interactivity and away from mass communication. This makes communicating to them through “traditional” advertising and marketing channels extremely difficult and most often fruitless. Adding to this challenge, there are roughly 40% fewer Gen-X consumers than Baby Boomer consumers, so you not only have to find a new way to communicate, but you have to compete for a slice of a much smaller pie.

Any business owner interested in reaching Gen-X consumers has their work cut out for them. To be successful, your message must appeal to their self-motivated and practical nature. They resist sales tactics and want things clearly mapped out for them. So don’t try to “sell” them; instead provide them with in-depth information about your business and the opportunity to determine the accuracy and relevance of your message. You’ll most likely need to invest in technology in order to communicate this information in the most efficient and effective manner.

90 million Millennials are connected to the world by technology

The Millennials outnumber the Baby Boomers. This generation is the most highly educated and the most racially diverse in American history.

Millennials grew up surrounded by technology. They are very connected to their smart phones and will usually check your company out online before deciding whether to do business with you. Your website presence and the way you engage with your audience in social media is very important to this generation. If you don’t have on online presence, Millennials will likely never know you exist.

Millennials have been brought up with a heightened desire for social responsibility, and they want to do business with companies that make their communities and the world better place to live. When communicating with these consumers, don’t be shy about sharing the reasons why your company supports certain non-profits or how your employees “give back” to their communities.

Embrace the challenge

While this demographic challenge may seem daunting, we see it as a great opportunity for savvy small business owners to separate themselves from their competition by adopting and embracing new marketing strategies.

Local small businesses that successfully identify and adapt to the spending habits of Gen-Xers and Millennials will prosper, whereas businesses that don’t will fail! Make the right choice. Make the change!