It ;all began with the baby boomers. It was this generation that first acquired a tag, but not – as you might think – at the time they were being born. The term « baby boomer » to describe the generation born after the World War II was not used until 1978, when it appeared in the New Yorker, according to author Bill Bryson in Made in America.
Nothing more was said on the issue of generational nomenclature until the early 1990s when Douglas Coupland published his expose of the generation that followed the boomers, Generation X.
Suddenly two generations had been tagged and bagged. Others on the loose were swiftly rounded up and branded: Generation Y naturally followed on from Generation X.
Then the generational name game splintered as several tags vied for the right to permanent association with the generation that straddles the millennium: Net Generation, Dotcoms, Generation Z and, my preference, Millennium (see table).
But surely you cannot simplistically label an entire segment of the population based on years of birth? Isn’t this what astrologers do?
Baby boomers should fear the ascendancy of disaffected Xers in the second decade of the new millennium, for they are bent on your mortal destruction.
There are life stages that are clearly based on the ageing process. Childhood runs from birth to puberty. This is followed by the teenage years which blossom between childhood and adulthood; these transition teenage years are being stretched by Ys beyond the traditional nineteen and well into the 20s.
Household formation is the exclusive domain of happy young couples: this phase fits between mid 20s and late 30s.
There are three phases that extend beyond 50: the new teenage years (50-64) which now offer the pursuit of fashionable lifestyle concepts such as seachange and treechange; the active retired years (65-74) where household budgets are constrained by the scale of the supporting annuity; and the frail elderly years (75+) where both wellbeing and connectedness is all that matters.
There is a big gap in the middle of life which is completely devoid of any tag whatsoever: it’s the stage that fits between 35 and 50 when most households are fully engaged in developing families.
Before the age of enlightenment this was once known as « middle age » but this term was spurned by baby boomers during the 1990s. Apparently middle age no longer exists either as a word or as a concept; it has simply « ceased to be ». The reason why generations are important to business is because the number of people presenting to each stage of the life cycle varies from one year to the next and this in turn affects the level of consumer demand.
In 2003 the mid-point of the « pre-boomer » generation (born 1938) turned 65. The demand for products and services associated with this stage in the life cycle (such as retirement property, health and financial services) was constrained by the fact that there are now 2.4 million people in this generation.
In 2018, the mid-point of the baby boomer generation (born 1953), will turn 65. The demand for retirement property, health and financial services, which was constrained by a market of 2.4 million people 15 years earlier, will blossom by 50 per cent to 3.6 million by 2018.
The place to be in business over the next decade is in the delivery of products and services to the « new teenagers »‘ and the « active retired » because the number of people reaching this stage of the life cycle is rising every year.
But it’s not just the volume of people in one generation as compared with another that so affects consumer demand, it’s the way values shift between generations.
The Frugals, for example (the parents of baby boomers), had their values forged during the Great Depression and World War II.
To some extent this also applies to the Pre-boomers who were born during the war years.
These are the last surviving pre-consumerist generations. The consumer spending generated by a million 40-something Frugals would be far less than the spending of the same number of baby boomers at this time of life.
The boomers are unabashed consumers, as indeed have been all generations brought up in the television era. But this is not to say that later generations will not dramatically reshape consumer behaviour in the future.
The embrace of environmentalism by Generations X and Y is already shaping our cities: no premier who wants to remain premier will propose the building of a new dam to service the water needs of a capital city.
Expensive desalination plants and increasingly brutal water restrictions are sacrifices we now make in observance of the new generational values.
In a similar vein, the Millenniums could well rail against the big city-focus that is so favoured by young people today.
The widespread adoption of new technologies and work practises that de-link the home from the workplace could alter (or deflate) the baseline value of city property at some point during the 21st century.
After all « the city » has not always been viewed as positively in history as it is today. It is not inconceivable that within a generation our biggest cities are no longer regarded as sexy and alluring but as crime-ridden, drought-stricken and, due to the high cost of housing, elitist.
But the impact of even these substantial value shifts between generations always will be limited by the fact that no succeeding generation has the numerical leverage commanded by the boomers. There is nothing magical about the boomer’s birth years. Their consumer strength, even today, lies in the inescapable and demographically unique fact that their number is 58 per cent greater than the number in the immediately preceding generation.
Of the Xers, Ys and Millenniums who follow, the greatest inter-generational shift is a limp 12 per cent managed by the Xers. Boomers will always win these comparisons of who’s had the greatest impact. And this fact in itself might just render the astrologer’s prediction correct. In the second decade of the new millennium the Xers will, finally, hold positions of authority over the retired boomers.
Bernard Salt is a KPMG partner
source: http://www.theaustralian.news.com.au
Original text can be found at http://www.theaustralian.news.com.au/common/story_page/0,5744,17418289%255E28737,00.html