Much has been written about the Baby Boomers and the affect their retirement will have on society and the work force ~ and certainly marketing strategies for the brands and corporations. Will the Boomers, once the true believers in conspicuous consumption, continue their spending ways into retirement? Or has the economic downfall of the last few years curbed their spending habits for good? Are aging boomers the only concerns CEOs and CMOs face?
Yes, the Boomers were responsible for massive changes in American demographics, spending and marketing. But they are just part of what marketers need to consider in the upcoming years. In fact, there are other demographic shifts as important as the Boomers that are coming to the forefront. Welcome to the new United States and the five realities that will shape the country for years to come.
In fact, The Brooking Institution with support from the Rockefeller Foundation published a report entitled “State of Metropolitan America: On the Front Lines of Demographic Transformation,” which examines the new realities in demographics that will change the nature of the country’s social and economic fabric for years. In fact, these five realities will redefine who we are, where and with whom we live and how we will provide for our welfare, as well as the welfare of our families and communities.
These trends are too big to ignore – especially since they directly impact the large metropolitan areas where two-thirds of the population resides.
Here are the five new realities that will shape the future of the United States and push marketers to adjust their strategies.
1. Growth and Outward Expansion.
Over the next decade the country will add more than 28 million people, and they will largely settle in cities. Between 2000 and 2009, the metropolitan areas grew by 10.5 percent versus the rest of the country. Like a puddle’s rings in the water, the cities are not only getting a denser population but they are absorbing the outer rings of the metropolitan area. It is the outskirts of the metropolitan area, where housing and land are cheaper, that are seeing tremendous growth. Conventional wisdom would suggest that these exurbia communities are designed for, and would attract, first nesters and young families. But, what is more intriguing is that these areas are, in fact, attracting the 55-plus demographics. The outer edge of our cities are experiencing a 45 percent increase in their 55-to-64 population from 2000 to 2008. What is happening is that these suburban communities are starting to be occupied by a demographic group ~ seniors ~ for which they were not designed. How is that for a marketing twist?
2. Uneven Higher Education Attainment
Higher education is believed to be an economic stimulus. Past generations fervently believed that the more education, the better the financial reward. More than one-third of U.S. adults held a post-secondary degree in 2008, up from one-quarter in 1990. But younger adults, especially in large metropolitan areas, are not using a post-graduation degree as a means for increased financial and social success. In addition, African-Americans and Hispanics, who are projected to enter the workforce in dominant numbers, are behind whites and Asians in attaining a bachelor’s degree by more than 20 percent.
3. Income Polarization
Americans know that, even adjusted for inflation, their incomes declined between 1999 and 2008. And they are right. The average American’s income went down by more than $2,000 during that time, and probably more so in 2009. But not everyone suffered financially. The adage that the “rich get richer and the poor get poorer” seems to be true. Low-wage and middle-wage workers lost considerable ground as factories and offices closed and the real estate market tanked. The number of people living below the poverty line rose by 15 percent since 2000. But the rich saw their incomes rise.
But more alarming for some is that the gap between the haves and the have nots widened considerably as high-workers in metro areas out-earned their low-wage counterparts by more than five to one.
4. Population Diversification
Despite the current political conditions, immigration fuels the growth of the United States. Currently one-third of the U.S. population is nonwhite and accounts for 83 percent of the national population growth from 2000 to 2008. Almost 25 percent of U.S. children have a parent who is an immigrant. Like the Boomers, aging of this group will dramatically redefine America. In about 30 years, the majority of United States population will be nonwhite, especially in the metro areas. In fact, it’s already happening. In 2008, the under-18 population had already reached majority status.
5. Aging Population
Back to the Boomers. Yes, they are aging and will make up 100 million Americans, and many metro areas are aging faster than the rest of the nation.
Each of these five areas is facing dramatic changes in the next few years. Together it means that the United States, and in particular its major cities, will face major demographic changes that will affect how we view ourselves as a nation. Failure to understand who we are could lead to intergenerational, interracial, inter-ethnic and socio-economic conflicts. What are the implications for businesses? Lack of remaining relevant as a brand, and sustaining growth. Ask yourself, who are your customers, really? Do you know the new face of America?
Understanding and accepting the new reality of who America is, will not only enable people to take necessary steps to lead a unified nation collectively forward, but also help brands and companies succeed domestically and globally.