Changing of the Guard: Shifting Demographics Signal New Opportunities for Business

From the emergence of the Internet to the aging of the baby boomers, many of the trends and demographics associated with the American consumer have undergone dramatic changes in the last 10 years. Obtaining a clearer picture of just what today's customers look like could help merchants get a better idea of how they want to position their businesses.

Recent numbers from the U.S. Census Bureau indicate that the American landscape is a far different place from 1990. Looking at three categories—the demographic shifts, changing consumer trends and things that have stayed the same over the last decade—it's possible to see what the future will likely hold for today's merchant.

Aging Boomers, Redefined Families

With baby boomers reaching their fifties and sixties, America's older population is growing at a rapid rate. In 2000, the median age in America hit a new high of 35.3 years, a full 2.4 years older than in 1990. The fastest growing segment of the population is those aged 50 to 54, a 45 percent increase over 1990. A full 20 percent of the US population is now over the age of 65.

Not only are older Americans growing in number, they're also becoming wealthier. The median net worth is highest among those aged 65 to 69. Aging boomers are now reaching retirement age with more money set aside than any previous generation. This has allowed older Americans to assert themselves as a powerful consumer force. But it doesn't mean they control all the spending power.

Median income is up across the board. In 1990, the average worker brought home $29,943, versus $40,816 in 2000, with disposable income increasing from $17,176 to $25,379. This boost is reflected in the growing numbers of houses built over the last 10 years and higher rates of home ownership. However, this boost has not been accompanied by growth in family size.

While younger Americans have long led the way in total income and spending, they have tended to do so from a family base. But the new numbers show the family is being redefined, with single-mother households growing at three times the rate of married-couple families. Average household size is down slightly while two-income families are up. This translates into more affluent consumers than ever, but also more burdened and time-taxed consumers looking for new options for their spending dollars.

Competition on the Information Superhighway and on Main Street

Internet and eCommerce expansion are the most obvious consumer outgrowths of the 1990s. And while the low savings rate and high consumer expenditures of the decade have been part of the eCommerce revolution, the most noticeable impact of the Internet is proving to be the way it affects how people shop offline.

In 1997, one in five Americans used the Internet, and half of employed adults used a computer on the job. Those numbers are on the rise, and as eCommerce moves into its adolescence, the Internet is being used to comparison shop, breeding an increasingly sophisticated consumer. Shoppers today expect wide selection, easy access and low prices. And when they do go offline to make purchases, they face a widening variety of shopping options and opportunities.

Businesses must fight for customers on two fronts: they are forced to provide the information consumers want online while attracting their offline dollars in the face of heavy competition. Closing that loop and bringing today's sophisticated shopper into the fold is tricky, but the payoff can be significant for businesses that understand their customers.

Still Fickle, Frugal and Demanding

Is today's shopper and entirely different breed from the shopper of 10 years ago? Of course not. Today's shoppers are as trendy, finicky and cost-conscious as ever, with the same expectations for superior service and satisfaction.

This means that moving merchandise is as critical as ever, as is expert buying. It's still crucial to stay ahead of trends in consumer taste, but staying in touch with tastes only matters if those tastes fall into the target shopper's price range. Consumers are still willing to go a long way for a bargain, and when they find that bargain, they expect it to come with a high level of customer service backed by satisfaction guarantees.

Unreasonable? No more so than consumers have ever been. And as merchants face a transformed commercial landscape, that stable consumer expectation works in their favor. The key to this new landscape is to constantly map it, using established signposts as a guide and continuously carving new roads for new consumer vehicles.

For more information on the 2000 Census, visit the US Census Bureau online a www.census.gov. For questions regarding conducting your business on the Internet, contact Custom Credit Card Processing at 703-739-2224 or at info@customcreditcardprocessing.com.

< Back to Other Articles