FARTHER ALONG THE X-AXIS

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PHILADELPHIA DAILY NEWS REPORTER MYUNG Oak Kim knew the rules of engagement. Not once, but twice, she tested them. The first time was after the August 2000 birth of her first daughter. Apart from paid maternity leave, disability and accrued vacation, the Daily News allowed for unpaid time out of up to 12 months. She stayed home with the baby, and returned to work, pregnant again, after 13 months. Daughter number two came along. To bond with her second infant, Kim stayed home 15 months.

Today, Kim's byline still shows up on the paper's front page. There were risks, however calculated, to her career arc, and there were consequences. For all those months of unpaid leave of absence, husband and fellow journalist Sam Jaffe's salary became their sole source of income. So they cut back. No dinners out. No exotic holidays. No help cleaning house. Home furnishings became a Hobson's choice: mom's living room set, a yard-sale dining room table, toddlers' rooms compliments of Ikea.

My family at the time was more important, Kim says. Being a hotshot reporter is only part of the equation for me.

Kim's not an anomaly. The choice she made in view of what just a short time ago would have been a certain mommy track stigma among her colleagues probably indicates a norm for her age group. The code of comportment, of who wins, who loses and why, grooved deep into the economy over the past quarter century as 75-plus million Baby Boomers glaciered through their mid-20s into their late 30s, is finally up for grabs. Midnight, New Year's Eve this year, history's last Boomer turns 40.

Now, it is Kim's assertion that family comes first and career second, and her conviction that home and work success don't negate one another that will likely typify a Generation X value set that never bought the American Dream Baby Boomers offer for sale. What's more, Gen Xers, particularly women in their mid-20s through their late 30s, appear to be keen to explode Boomer myths about being grown-up and empowered. Gen X women married or not, mothers or not seem bent on creating a new, more mature, quintessence of adulthood, of career, of home. Equal parts traditionalism, irony and iconoclasm, thirtysomethings' universe including work and leisure gravitates around the home.

Which makes them different consumers. The mark they will leave on society, on culture, on business, over the next 10 to 15 years is what we're seeing early indicators of in behavior like Kim's. Like an outmanned army, Gen Xers use cunning, elusiveness and conviction to turn a massive numeric disadvantage into an edge, and to turn a lifetime of being misunderstood into an opportunity to redefine what should be understood as value.

The stakes involve trillions of dollars and entire industry sectors in the balance (see charts). Generation X's 49 million cohort is about to start passing through the pearly gates of peak earnings, and as they also become the economy's principal family-makers, the onus of catalyzing the most important component of the gross domestic product consumer expenditure falls on Xers' shoulders. The U.S. economy grew accustomed to, and perhaps complacent about, Baby Boomers contributing almost half of all consumer spending over the past 25 years. That's a lot to live up to, but just as Kim tested unwritten mommy track rules, her generation will be challenging a core assumption of society that to spend is good and to spend more is better.

What ramifications it suggests as consumer goods and services firms market to people who've made a high art of sneering at attempts to get them to buy stuff since they were latchkey kids learning to be self-sufficient, learning to buy, learning to say no. Already, industries in the home-formation sector home furnishings, financial services, consumer electronics, media, entertainment and others are grappling with the need to re-cast product lines, services and marketing messages for adults whose tastes, attitudes and values contrast dramatically with those of Boomers. Boomers, after all, said one had to make a choice family or career. Not so, say Xers.

THESE WERE SLACKERS

A bit of background. As Gen Xers hit their late teens and early 20s in the mid-'80s, older generations slapped them with the moniker slackers. Gen Xers were considered unmotivated, apathetic and cynical. That's because they were misunderstood, says Ann A. Fishman, president of Generational-Targeted Marketing Corp, in New Orleans. Gen Xers had different values from the Boomers, especially work values. Gen Xers wanted to enjoy their jobs and have time for their own lives. They were willing to trade off less money for more freedom. Boomers looked at them and said, They're not younger versions of me, so they must be wrong, she says.

As Gen Xers came of age and shrunk the new-entrant labor force starting in the late 1980s and 1990s, young women gained greater leverage with employers, observes Lynne Lancaster, a partner with Bridge Works, a generational-based consulting firm in Sonoma, Calif. Gen X women can put some pressure on the employers and say, I'll take this job, but since I'm a young mother, I'm only going to work to 5 p.m., and I'm going to work four days a week, says Lancaster, who is also coauthor, with David Stillman, of When Generations Collide: Who They Are. Why They Clash. How to Solve the Generational Puzzle at Work (HarperCollins, 2002). That's leverage Baby Boomer women didn't have.

NESTING INSTINCTS

Gen Xers' attitudes about family and home have already begun filtering into American society, culture and business. The media is often slow to pay attention to Gen X, because of their small number, but they're often trend and opinion leaders, Lancaster says. Now they have the disposable income.

Many agencies in the sector note that Americans in their 20s and 30s are buying homes, instead of renting, taking advantage of the lowest interest rates in three decades. Before, you'd see a person graduate from college, rent an apartment until they were married, and then start thinking about buying a house, says Don Bradley, the principal economist at the Federal Home Loan Mortgage Corp., a quasi-governmental agency that helps finance home mortgages. That is a pattern that is less and less true. Bradley also attributes at least a portion of Xers' wherewithal to Boomer parents who help Xer children with homeownership.

While homeownership rates among 30- to 40-year-olds may be less than they were in the 1980s and 1990s when Boomers were that age, younger Americans' attitudes about their homes eclipses their predecessors'. Gen Xers don't just want a place to crash, they want a comfortable home that reflects their tastes and their styles. Gen X, whether they're single women or single men or couples, want a home, says Fishman. They want it to feel like a home.

THE MARTHA EFFECT

Martha Stewart first aired her syndicated TV show, Martha Stewart Living, in the early 1990s, just as the first Xers hit their mid-20s. With her magazine, TV shows and line of home products for Kmart, Stewart brought home decorating to the masses. Flip through the TV channels today and you're likely to come across one of several programs on interior design, such as The Learning Channel's Trading Spaces, HGTV's Design on a Dime, Bravo's Queer Eye for the Straight Guy or a home renovation show, such as PBS's This Old House.

We have Martha to thank for raising the level for home design and creating an environment in your home, says Stephen St. Onge, a featured decorator on the television program While You Were Out and a columnist for a new Time Inc. shelter magazine that's set to debut in September, Cottage Living. (The magazine is targeting women 35 to 50 years old.) People don't need to hire an expensive decorator or a professional. She showed you the basics and how to do it.

GETTING HOME LATE

The trend of postponing marriage until later in life decreased homeownership rates among the young during the 1980s, but lower interest rates and changes in mortgage lending practices counterplayed the trend over the 90s. Source: Tabulations of the PUMS data of the Census Bureau by Joint Center for Housing Studies at Harvard University

St. Onge, 36, says he's noticed a lot of men and women in their 20s and 30s buying homes, even if they're single. He says younger homeowners are fixing up their lodgings to reflect their tastes as well as to increase the value of their homes. Unlike older generations, Gen Xers are more willing to mix styles. They'll have expensive items with less expensive ones.

Gen Xers have realistic or some may say lower expectations compared with Boomers. Gen X couples focus on decorating one room at a time, so that it meets their exact specifications, says Caroline Gibbons Barry, president and founder of PortiCo Research, a consumer market research company headquartered in New York. They may spend time using unusual techniques to paint the nursery or they may look for one piece of furniture that is meaningful for them. Maybe it's an heirloom or something they bought on a trip. They're picking out the details that make it personal, Gibbons Barry says.

GEN X-CLUDED

Although Gen Xers are buying homes and spending money to decorate and renovate them, companies still ignore them, focusing instead on the larger demographic groups Baby Boomers and Gen Y, says Bridge Works' Lancaster. However, some furniture retailers, such as Williams-Sonoma's Pottery Barn and Crate and Barrel, target Gen Xers who want to mix and match different styles. Lancaster says that Ethan Allen is now attracting Gen Xers with its new TV ads. Williams-Sonoma plans to target more Gen Xers, when it starts a more aggressive rollout of its newer furniture concepts, West Elm. The company's furniture designs are edgier and its prices are lower than those found in Pottery Barn, says Joan Storms, a retail analyst at Wedbush Morgan Securities in Los Angeles. They think this will be their biggest brand, period, she says.

Magazine publishers, too, are reaching out to younger readers who are interested in home design, but who may not have the money to buy top-end products featured in Architectural Digest or Elle Dcor. Martha Stewart Living Omnimedia prior to Stewart's legal woes reportedly began exploring a home-decorating magazine for younger women. Cond Nast Publications plans to launch a magazine for home furnishings shoppers next year similar to its fashion shopping magazines, Lucky for women and Cargo for men.

American Media Inc., the publisher of Star, National Enquirer and Men's Fitness, plans to introduce a shelter magazine in September for people in their 20s and 30s who don't have as much money to spend on furniture, appliances and home decorations, but want their home to be stylish. This generation is buying homes, says Sara Ruffin, editor of the as yet unnamed magazine. They're getting into the real estate market and they know they can make money if they fix up their houses and have them appreciate in value. Gen Xers think of home dcor more as fashion. They may buy an expensive antique dresser or a Sub Zero refrigerator, but they'll also buy a funky red sofa at Ikea that they won't mind getting rid of when they're tired of it. It's like buying a pair of high heels that you don't like, Ruffin says.

CUSTOMER OF TOMORROW

Most shelter magazines are geared toward women, even though Gen X men are more involved in home decisions than Boomer men. They are apt to get involved in picking out the china pattern or buying a sofa. When you walk into a Boomer home, everything is an expression of her tastes, says PortiCo's Gibbons Barry. You don't get the feeling that a Gen Xer's home is a reflection of the woman, but of the couple. And it's even a reflection of the kids, if they have any.

A House Beautiful survey conducted in 2003 with WSL Strategic Retail in New York City found that younger women were much more likely to say that their spouse was involved in home decorating. Forty-seven percent of the respondents age 24 to 34 said their spouse was involved, compared with 41 percent for those 35 to 44 and 40 percent for those 45 to 54.

However, women are still the primary decision makers when it comes to purchases for the home. Eighty percent of the purchasing decisions are made by women and marketers should pay attention to that demographic, says Lee Sucharda Jr., chairman of Design North, a strategic design firm in Racine, Wis. So, companies should be aware that Gen X women are impatient shoppers. Time is so critical for them with running a house and having a job, Sucharda says. They don't want to get bombarded with choice after choice.

Devine Color, in Lake Oswego, Ore., is addressing that concern. Gretchen Schauffler, an artist, came up with a palette of 128 colors that work with the wood tones found in most homes. In 2000, she approached Miller Paint Co, a 110-year-old paint manufacturer, and a year later Devine Color paints were being manufactured and sold in stores. The product is now in 350 stores across the country.

Gen Xers aren't as brand loyal as Baby Boomers, according to Jennifer Ganshirt, a consultant with Frank on Women, a market research firm in Winston-Salem, N.C. They shop at high-end stores as well as discount shops. So retailers have to provide quality products and effective customer service, she says. Gen Xers are more likely to research items online before they go to a store. Gen Xers come into a retail environment well informed, Ganshirt says. They do research on the Internet, especially on bigger ticket items. They'll come in with price-comparison charts that they've printed out. But they still need guidance from a trusted retailer. Customer service can make or break a retailer.

Flooring America, with 450 stores that sell carpet, tiles and vinyl flooring, revamped its Web site, so that visitors can see the company's array of products. Flooring America also input its products' true colors, so customers can get an accurate match with their furniture or interior paint. We say that Gen Xers are our customers of tomorrow, says Sally Kelly, spokesperson for the Manchester, N.H., based company.

LIVING IN THE SHADOW

Following the largest population group in U.S. history is no easy task for Generation X.

Generation Comparison

Baby Boomers 2004

POPULATION: 76 million

# OF HOUSEHOLDS: 46 million

CONSUMER EXPENDITURE: $2.1 trillion

% OF TOTAL CONSUMER EXPENDITURE: 50%

Generation X 2004

POPULATION: 49 million

# OF HOUSEHOLDS: 19 million

CONSUMER EXPENDITURE: $735 billion

% OF TOTAL CONSUMER EXPENDITURE: 18%

GETTING THE IDEA & DOING THE PROJECT

Before Gen X women start tearing down the walls, they consult some magazines and TV shows to get ideas for their projects. They also lead in the home remodeling category, especially when it comes to adding rooms to their houses. *Represents the likelihood of a respondent to buy/use product when compared to the average respondent. 100 is the average, therefore if the index is 150, the respondent is 50 times more likely to use the product.

Source: Simmons Market Research Bureau
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