How the Modern Consumer is Different
There is a prevailing wisdom that says the stereotypical American consumer can be defined by certain characteristics.
Based on what popular culture tells us, as well as years of experiences and data, we all have an idea of what the average consumer might look for in a house, car, restaurant, or shopping center.
But as circumstances change, so do consumer tastes – and according to a recent report by Deloitte, the modern consumer is becoming increasingly distinct from those of years past. For us to truly understand how these changes will affect the marketplace and our investments, we need to rethink and update our image of the modern consumer.
A Changing Consumer Base
In their analysis, Deloitte leans heavily on big picture demographic and economic factors to help in summarizing the three major ways in which consumers are changing.
Here are three ways the new consumer is different than in years past:
1. Increasingly Diverse
In terms of ethnicity, the Baby Boomers are 75% white, while the Millennial generation is 56% white. This diversity also transfers to other areas as well, such as sexual and gender identities.
Not surprisingly, future generations are expected to be even more heterogeneous – Gen Z, for example, identifies as being 49% non-white.
2. Under Greater Financial Pressure
Today’s consumers are more educated than ever before, but it’s come at a stiff price. In fact, the cost of education has increased by 65% between 2007 and 2017, and this has translated to a record-setting $1.5 trillion in student loans on the books.
Other costs have mounted as well, leaving the bottom 80% of consumers with effectively no increase in discretionary income over the last decade. To make matters worse, if you single out just the bottom 40% of earners, they actually have less discretionary income to spend than they did back in 2007.
3. Delaying Key Life Milestones
Getting married, having children, and buying a house all have one major thing in common: they can be expensive.
The average person under 35 years old has a 34% lower net worth than they would have had in the 1990s, making it harder to tackle typical adult milestones. In fact, the average couple today is marrying eight years later than they did in 1965, while the U.S. birthrate is at its lowest point in three decades. Meanwhile, homeownership for those aged 24-32 has dropped by 9% since 2005.
A New Landscape for Business?
The modern consumer base is more diverse, but also must deal with increased financial pressures and a delayed start in achieving traditional milestones of adulthood. These demographic and economic factors ultimately have a ripple effect down to businesses and investors.
How do these big picture changes impact your business or investments?
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The most educated? That’s an odd adjective. And if they are the most in debt, what does that say about the quality of that education?
I caught that too…
“Today’s consumers are more educated than ever before…”
…and far less intelligent.
2 Timothy 3:7 KJB… “Ever learning, and never able to come to the knowledge of the truth.”
I wonder if they have re-purposed the meaning of education to include mental conditioning and mimickry?
Exactly. It should read most “schooled”. Which equals indoctrinated.
I believe you would call it “Smart but not wise”.
1). Sell all your stuff now, second homes etc. There will be so few buyers in the future of such “wasteful and discouraged waste of second homes”.
2). There will be no national identity. Terrorism will multiply because in an over diverse culture you cannot spot the lone wolf.
3). Minimalism will be en vogue. You will have negative social scoring for being normal.
4). There will be a major division in the usa. Free states and statist states. Free travel will be a thing of the past.
5). Normal investments will not do well things that you deem crazy to invest in will do great. Things you will not understand nor partake in nor be a consumer of. It is a and will be a generational gap unseen in history
6). Consider moving where you may live out your final years in peace
No truer words ever spoken.
Carry on…..
@John Galt
#6 has been my only option. For one thing, my new community life
is affordable. The banks have made interest $ for savers obsolete and
there is the (2014) “law” that savers are vulnerable to bail-ins on a whim.
Minimalism is en vogue for me at present…peace in my final years…and
quiet. Traffic noise and sirens are history…but roosters crowing, that is
the new reality.
Buy physical gold/silver, guns/ammo and barterables (booze/tobaccco/chocolate) and store in safe location
There is nothing wrong with consumption. We need to consume food and water, or we die. We need clothes on our backs. We need shelter. We need transportation. All this consumption costs money. So be it.
Unfortunately, … when your whole fucken ECONOMY is based on consumption … and when consuming shit is basically the American defacto RELIGION ….. then, indeed, “the days of Noah” have come upon us. Here is your average American (whom I believe God will spew from his mouth);
Now, contrast that with what the Good Book has to say …..
How many here live like that? If you don’t like Bible-talk then, at least follow what the Prophet John Galt says above; simplify and embrace minimalism!! You’ll thank us later.
The pond… it beckons. Still full of lilypads, bullfrogs and algae, but it beckons.
Niiiiice!! I think I heard it calling me last night. 🙂