Adapted from a blog by Jon Goldman of Brand Launcher (with permission)
Using demographic comparison between Baby Boomer and Gen Yers as a starting point in search for trends, here are my 6 bold predictions:
1. Spending will decrease as Boomers age
Which segment of the population has the biggest impact on the economy? Baby Boomers. There are millions of Boomers, and they are now entering their retirement years. Logic says they will be more cautious with their money and spend a little less (remember, life expectancy is increasing and they may need that income for years to come). According to Gallup, last year Boomers aged 50 to 64 spent $93 a day on average, while those 65 and older spent only $78 per day. What can you do about this? If you are marketing to Boomers, adjust to offer them big value that will help them in their next chapter in life. Even though they will be attracted to lower prices they will continue to spend on those things that they "want" not just "need" during their time of decreased spending. And while plenty of Boomers are quite savvy when it comes to technology, many have stopped looking for the newest high-tech trends. So don’t bet on selling bleeding-edge tech toys to them.
2. Home prices will decline
Many Boomers are selling their homes and downsizing to smaller houses or moving into retirement communities. Many call it “The Great Senior Sell-Off.” There will be a housing shift from Boomers, who are turning 65 at a rate of 10,000 per day, to Gen Yers entering the workforce at a rate of 10,000 per day. Do you see the problem here? The rapidly growing younger generation cannot afford to move into the Boomer homes, and there isn’t a large enough population of Gen Xers to force prices higher. Add to that (1) the increase in new homes being built plus (2) predictions of higher interest rates and (3) the fact that income levels have not kept up with increasing housing costs in recent years, so I predict a decline in home prices.If you are in real estate, you can focus your attention on the myriad of downsizing Boomers or focus on the Gen Yers seeking starter houses. Plus be sensitive to the new needs of Gen Y as they enter into the home market. They have very different wants. They want a big wired entertainment center to hang out and play video games over large walk in closets. They will settle for smaller sizes with greater effeciency and more green compliance. Both groups are trending to "hassle free". That means smaller, more maintence free yards for Gen Y and neighborhoods that will take care of home upkeep for the aging boomers. Remember, every new trend is an opportunity for you.
3. Flex schedules will continue to rise
When Henry Ford created the 40 hour work week, little did he know that one day those 40 hours might include nights, weekends, two people sharing a job, or employees working from their own homes.
The old way of “be here” has shifted to “flexible schedules.” We’ve seen huge companies, including Kraft Foods and Texas Instruments, experimenting with flextime. They have realized, along with many other companies, that a happier, less stressed workforce equals increased productivity. Therefore, I predict flex schedules and job sharing will continue to increase.
As an entrepreneur, this has multiple repercussions. With this trend, you can enjoy increased productivity, but you can also use the newfound flexibility to minimize your costs. Flextime means less unplanned absenteeism. So a word to the wise - GET OVER IT. Don't expect the next generation to share the same work life values as the previous generation. The new day has arrived and the question is will you adapt?
4. Gaming will continue to grow in business
Once upon a time it was simply “buy one, get one free.” But in recent years, “gamification” has come to mean incorporating game mechanics into your marketing activities to drive customer engagement. People love games, and they’re fun! McDonald’s even incorporated an actual game (Monopoly) into their marketing… and people love playing it. We also love accumulating and using frequent flier miles and credit card points. Even your local haircutter is adding a scratch off element while giving you a punch card to get that tenth haircut free. So, I predict the continued growth of “gamification.”
How do you cash in? Plan a game that fits your demographics – what would they enjoy doing to interact with your business? It should be fun as well as measurable. Remember to keep it simple and reward customers with points or other rewards so you can boost the value per purchase, increase the frequency of purchases, and/or even drive your customers to new products or services. Check out how companies are incorporating visiting their store and using social media to increase sales and improve customer engagement
5. The sale of businesses will rise significantly
In the next five to ten years, nearly 7 out of 10 business owners will exit their companies. Over one to two million businesses will transfer hands a year. Wow! Talk about a fire sale. It's going to be the largest exodus of business that the planet has ever seen! Part of this is because the Baby Boomers are retiring, and some of it is because an unsteady economy makes it more inviting to take an opportunity to get out. The store owners who once said “I’ll never sell this place” are now more likely to sit down with a prospective buyer who has ready money. Now, they won't all sell. Many will give it to their kids or key employees. And finally, the recession of 2009 dropped business sales by 28%. Several years later, those business owners who wanted to sell have a slightly better economy and are readying themselves to make a deal. This is why I predict an increase in business sales.
This won't be a simple sell off. Many will want to keep some control. The idea is to build an asset you can sell or keep, but an asset you shall reap. They will try to build the business so that it is no longer dependent on them. If you are considering selling, now is the time to ready yourself. If, however, you are looking for a new direction, you might think counter-intuitively and train or coach these new business buying entrepreneurs. As a business owner, if you’re not selling, you can also market consistency and stability as a reason to shop at your company rather than the always-changing competition.
6. We will be wearing more technology
By the end of this year we will be wearing over $3 billion of technology. Be careful and don’t get mugged! Today, people are using their smartphones to go online more often than their laptops. But technology keeps moving one step ahead. While smart watches are gaining momentum very slowly, there will be an increase in wearable mobile health technology, including both health and exercise monitoring wristbands. And then there are smart glasses, like this version from Samsung. Some are even able to process data, run mobile apps and even serve as a GPS — all for about $500. Therefore, I predict we will be wearing more technology in the coming year(s). From your standpoint, you should be ready to market your products on anything and everything wearable to the Gen Y and even Gen X markets, who will be the ones to start wearing their technology anyplace they go. Are smart bellybutton rings next? Possibly.