What do Future Consumers look like.

According to a summary report by Doug Anderson, SVP, Research & Development, The Nielsen Company, growth will be hard to come by in the coming decades. The recent recession has wiped out a decade of growth in the U.S., says the report. Jobs, the S&P 500 index, home ownership, incomes, and American stock and bond investors all look like 1999 or worse, and successful marketers must factor the U.S. shifting demographic profile into the forthcoming marketing mix.

U.S. fertility rates have fallen by 44% since the peaks of the Baby Boom and are projected to continue to fall by another 12% over the next several decades. Falling fertility, combined with rising life expectancy and the large Baby Boom generation just nearing retirement age, equates to an aging population. By 2037, nearly one in three households in the U.S. will be headed by someone over the age of 65.

Aging, however, is only the most obvious impact, says Anderson. There are five other key trends fostered by aging that will completely alter the marketplace for consumer products:
Marketers in the developed world will be locked into share wars while those able to compete in the less-developed world could see substantial growth.

– Worldwide there is still substantial, though slowing, population growth. By 2030, world population will have grown by around 20%. Only 3.2% of this growth will come from the more developed world. The less-developed regions will grow 31 times faster than the more developed ones. Some of the older countries in Europe as well as Japan will lose population.

In Western Europe and Japan, the share of households with children under 18 will be much lower, making large families with children a niche market.

– The consequence of an aging population is that the share of households that have children will continue to decline, as it has since the peaks of the Baby Boom in the late 1950s. Because fertility rates continue to fall, average family size will also fall, further impacting sales volume. By the middle 2020s, the share of U.S. households with children under 18 will fall below 30%.
Multi-cultural marketing will be essential when selling to families with children.

– The majority of population growth in the U.S. will come from new immigrants and the children they have in this country. Since most immigrants are young, families with children will become more ethnic, more quickly, than the total population. By 2025, the majority of families with children in the U.S. will be multi-cultural (Hispanic, Black, Asian, etc.). Less than half of families with children will be native born non-Hispanic White.

The Baby Boom will seek to rewrite what it means to be old, just as they have rewritten what it meant to be children and adults.

– Persons over the age of 65 will be the first generation to grow up in a full blown consumer marketplace. Marketers who assume that the Baby Boom will start to behave like current older Americans, just because they reach the age of 65, do so at their peril. Baby Boomers will not spend on the same categories as their parents did. For example, consumption of alcoholic beverages is much higher for Baby Boomers than for the current cohort of 65+ persons.

As population growth slows in the U.S., so will spending on consumer products.

– Household size will decline across the board, the largest families will be smaller and a large share of the population will live in one or two person households. Nielsen projections demonstrate that households closest to the poverty line will gain in share at the expense of all other households, but especially those in the middle and upper middle classes, who will shrink the share the most.
Anderson concludes that growth will be very hard to come by both now and in the coming decades. Nielsen projections show per household spending on packaged goods will begin to fall after 2020, while the current recession is already impacting spending in the short-term.

by Jack Loechner,
Courtesy of http://www.mediapost.com