The stars are quietly aligning for the next big consumer consumption boom thanks to the inevitable suburban migration of millennial moms and dads, who will be headed to the same pleasant neighborhoods their boomer parents sought as their families expanded.
Boomers, generally now age 55-75, followed the paths of the generations before them, often embarking on the life milestones of marriage, starting a family and moving to the suburbs for great schools in their late 20s and early 30s. They sought safe communities, open land for their kids to play sports and lots of support businesses such as ballet lessons, orthodontists and grocery stores. By their early 30s, they were well in to their heaviest consumption years for cars, houses, apparel, sports equipment and musical instruments. This began around 1980 and lasted through about 2009, when it abruptly stalled due to the Great Recession. Unfortunately, retail never quite recovered from this hard economic hit and many of their children, now young adult millennials, haven’t forgotten the stressful time. Additionally, this time period marked the beginning of the consumer deal mentality, aided by search technology and becoming irreversibly mainstream, as a permanent behavioral end result that still persists today.
Concurrently, consumer adaptation to technology and the power of the phone, which became far more than a communication device, evolved at breakneck speed from 2007, essentially placing a palm-sized computer in everyone’s hands. As many have looked in the rear-view mirror over the past 10 years, much blame for declining traditional retailer sales has been placed on technology and the internet, but it also seems retail became boring and cookie cutter. Stores became stale and uninteresting, and there was no reason to drive to a mall. While it’s true that many retailers didn’t see the smoke signals being sent up by many of the digital disruptors, which were paying close attention to rapidly changing consumer behaviors, there was also a natural gap occurring as the baby boomers had less need to purchase while millennials weren’t ready to settle down quite so soon. Today, boomers have full closets and garages, have slowed their consumption rates dramatically, and are seeking to downsize and simplify.
Millennials are living their lives on very different timetables than their boomer parents. Some generally classify them as late bloomers, but really they’re simply not on the same trajectory. In fact, many truly don’t yet place a priority on the same major milestones such as home ownership, which invites a huge need for consumer goods. Many millennials have simply and transparently decided they’re just not ready to settle down as early as all the previous generations, with so many options for experiences such as travel now readily available. Just as consumer behavior continues to shift, so are accepted “normal” life timelines continuing to get older for all generations. In a recent Center for Disease Control and Pew Research report, for the first time, women in their early 30s are giving birth at higher rates than women in their 20s and teens. Birth rates for women over 40 also are seeing an uptick from recent years.
But the really great news is that just as millennials’ parents wanted to give their children the best schools and childhood experiences possible, this will naturally, although admittedly on a delayed timeline, send them to the suburbs to a lifestyle the inner city can’t provide. This will inevitably positively impact numerous industries. For instance, while we all are much more environmentally conscious than in the 80s and 90s, shying away from the gas-guzzling Range Rovers and Chevy Suburbans as the suburbia people-movers of choice, the new classifications of crossover vehicles and new breed of minivans boast seating for seven and are available from all major auto makers. This younger family will likely also not want the upkeep expense of their parent’s McMansions, which will present a challenge for some areas where bigger was better. What won’t likely change, however, will be the need and desire for adorable nursery bedding, local team soccer uniforms, home improvement materials, and comfy living room furniture — all good news for the retail industry trying to find solid footing in this new consumer shopping paradigm.
Linda Mihalick is the senior director, Global Digital Retailing Research Center at the University of North Texas.