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|Author||John Towler, Ph.D.|
|Original Publication||Exchange Magazine|
Keep pace with the times if you want to keep your business alive and prospering.
Everyone is familiar with the old story about the turn of the century company that made buggy whips. The firm went out of business because it refused to adapt to new developments. We may shake our heads at this kind of stupidity, but there are firms today that are just as out of touch with the future as were the buggy whip makers. Any firm that continues blindly doing the same old things in the same old way is already in trouble.
This applies to processes, materials, management techniques and products and services. Two major changes that have been occurring in our society will affect every business in Canada over the next few years. These changes are the aging of baby boomers and the increase in the number of elderly. These groups are already changing the marketing and manufacturing directions of today's progressive companies.
The elderly are rapidly forming an important market area that too few firms are aware of and prepared to serve. However the baby boomer segment of our population is here now and cannot be ignored. The baby boomers have a great deal of disposable income now and will acquire even more of it in the future. There are several million boomers and any company that caters to their desires will have found a rich and largely utapped market.
The boomers currently earn about one half of all the personal income in both countries. One half of the women are college graduates and the figure is higher for men. More than 70 percent of all homes purchased these days are purchased by baby boomers. Most have one, or at the most two children, if any. Boomers are more than twice as likely to belong to fitness clubs. By the end of the eighties, they will account forever one half of all consumer expenditures. Most married boomers have dual careers and hence dual income families. More than 75 percent of the women hold jobs outside the home.
Canadian businesses cannot afford to ignore these facts and the current trends concerning the rising affluence of the boomers. Analysts predict that households earning more than $35,000 will grow faster than any other income bracket in the next decade. There will be a dramatic increase in the earning power of the 35to 55yearolds in the next few years. A graph of national income distribution used to look like a pyramid with a few rich at the top and great numbers of low income earners at the bottom.
The shape of the graph is already changing into a rectangle and all of the growth is taking place at the higher income levels. In other words, while the luxury income bracket was the smallest segment in 1980, it will be one of the largest by 1995. The increased numbers of people with much more money will give rise to a boom in luxury products and services. In the next few years, every age group will become more affluent and smart businesses will capitalize on the market opportunities this new wealth will create. What will people want? How will they spend their money? How will market opportunities change? Already there are some clear indications of trends and patterns.
The moneyed consumer will be prepared to live "the good life" with all the care and attention that goes along with high-class living. These consumers are well educated and demanding. They will insist on high quality goods and services. They will want a greater variety of them and they will be willing to pay handsomely. Convenience and service will be hallmarks of these consumers while at the same time, they will be less and less interested in do-it-yourself projects and products. Futurists and analysts in a myriad of areas are currently working to identify the kinds of goods and services that the new consumers will want. In general, they suggest that there is a vast market opening up for companies that can provide high quality, high prices and pertinent marketing strategies.
Here are some of the areas that are waiting to be developed.
• There will be a demand for services and products designed to ease and improve the dual career couple's household duties. This will mean new maintenance items and services, timesaving and automated devices.
• Housing demands will change. New types, models and designs will be required by affluent, pre-retirement and retired couples. The "standard" look will be out while custom designed models will be actively sought after.
• The new consumer will be very aware of his or her physical well-being and will be willing to spend surprisingly large amounts on products and services that will maintain one’s body, looks, and youthful appearance.
• These people want to make personal statements about themselves. This will be reflected in unusual items, clothing and a host of personalized products and services, monograms, custom made items and demands for special orders.
• As our cities become more crowded as crime rates increase, there will be a corresponding demand for safety and security items and services to protect homes, personal property and individuals. Opportunities will abound to provide security systems, guards, home protection systems, protected residential areas, air and water purifiers, financial security and a whole range of new sanitation products.
• Luxury items and services that demonstrate "good taste" will proliferate. The use of fine china, crystal, silver, expensive wines luxury cars, furs, jewelry, gourmet foods, decorator and designer services will all increase. And for those who have never learned it before, there will be courses in etiquette, good manners and the appreciation of classical music, art, drama and the performing arts. Like all potential crises, there is both danger and opportunity in these trends. The outcome will depend on the intelligence and inventiveness of the reaction by Canadian businesses.
Re-printable with permission.
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