Profiting from the Profound Demographic Shifts Ahead
Early in his book Upside: Profiting from the Profound Demographic Shifts Ahead, demographer Kenneth Gronbach tells a story from his advertising days — he is now an independent consultant — in which his firm lost one of its biggest and most profitable accounts ever: America Honda Motorcycles.
In the 1970s and early 1980s, Japanese motorcycles had enjoyed booming U.S. sales, and there seemed no end in sight. Yet, suddenly and for no discernible reason, Gronbach writes, the bottom fell out of the Japanese motorcycle market. “We ran the television, radio, billboard and newspaper ads for about 180 dealers from the tip of Maine to Pittsburgh to Washington, D.C.,” he writes, “and then waited for the usual tidal wave of customers. It never arrived.” By 1992, the era of the Japanese motorcycle was over.
What happened? It was not until 1996 that Gronbach understood the reason for the Japanese motorcycle market’s mysterious disappearing act: It was all about generations.
During the 1970s and early 1980s, baby boomers — those born between 1945 and 1964 — were in the key 16- to 24-year-old motorcycle-buying age. By the mid-80s, boomers had aged out of the market and were replaced by 16- to 24-year-old Generation Xers. And here was the problem, Gronbach writes, a problem that strikes to the core of the theme of Upside: There were much fewer Gen Xers than boomers.
Gronbach explains: “The diminutive Generation X that followed the Boomers simply did not have the critical mass of 16- to 24-year-old men to satisfy the needs of the market left behind by the Boomers.”
Business is a question of supply and demand, and for Gronbach, many businesses are not paying attention to one of the fundamental components of supply: the number of people buying. In the first part of the book, Gronbach lays out the numbers, dedicating a chapter each to the six generations in the U.S. market today, from the G.I. Generation, born between 1905 and 1924, to Generation Z, born (or will be born) between 2005 and 2024.
Gronbach offers some interesting perspectives on the generations. For example…(click here to continue reading this review)