Once upon a time, understanding consumer motivations seemed so simple.
He was John Q. Typical; she was Jane Doe Average. They held down full-time jobs with good benefits, loved to shop at the mall, used their computer mostly for e-mail and their VCR to tape ER once a week. They thought a good value was paying 6 percent below manufacturer's list for their sport utility vehicle.
That was 1998.
But some curious things are happening on the way to the millennium. John Q. and Jane D. lost their jobs and started their own businesses. Now they're working in a home office, getting gray around the temples and stiff in the knees. They're stocking up on herbal remedies, spending more time in the bathroom Jacuzzi, and less time at the mall. They use one of their computers to track their Individual Retirement Accounts and another to program the VCR. They think a good value is buying an SUV through an online shopping service.
Welcome to the world of consumerism in the early 21st century, when what once seemed a New-Age fairy tale is now an emerging reality. If you think you've figured out the consumer agenda for the year 2000 and beyond, you may need to reconsider. Experts say consumers in the new millennium will throw some surprising twists and turns into the business of target marketing, turning upside down some of the traditional thinking about what we'll buy, how we'll live, and where we'll work.
"The 21st century will be the century of the consumer," says Roger Blackwell, a professor of marketing at Ohio State University and the author of From Mind to Market: Reinventing the Retail Supply Chain (Harperbusiness). "Marketers will have to push their understanding beyond knowing what people buy to knowing why they buy."
An analysis of government spending data indicates that some startling changes are already underway. Calculated with 1992 dollars, Americans spent $2.1 billion on computers in 1986, just 0.32 percent of the $614 billion they spent on food and beverages that year. But look ahead to 2006: According to the latest projections from the Bureau of Labor Statistics, computer expenditures will soar to $666 billion-84 percent of the $794 billion Americans will shell out for food and drink.
So if the 1970s were the "Me Decade," the 2010s will be the "Linked Decade," defined by a busy, mature, ethnically heterogeneous group of consumers who are confident in their ability to read anything, buy anything, and experience anything.
Several fundamental demographic changes will serve as the underpinning for this new consumer mind-set: the aging of the baby boom generation, the increasing importance of children as consumers, a growing chasm between society's haves and have-nots, and the country's increasingly diverse population. According to projections by the U.S. Census Bureau, non-Hispanic whites will comprise 62.4 percent of the U.S. population by the year 2025, down from 72.5 percent in 1998. Says futurist Watts Wacker, founder of FirstMatter, a business think tank in Westport, Connecticut, the day of the "Aryan from Darien" is over.
Given that demographic backdrop, what will be the most powerful values shaping the consumer mind-set? Below, four of the key motivational forces that will drive consumerism in the Century of the Consumer:
The Shrinking American Day The cry of the needy in the new millennium may well be "Brother, can you spare some time?" Harried baby boomers will create a time famine for themselves by working more hours and committing to more family and community obligations. How will they cope with their time-crunched lifestyles? In general, says Blackwell, "people will decrease the amount of time they spend on things they find unpleasant." That means doing less housework and home maintenance, and doing more dining out. It also means paying more attention to brand names-not in search of status, but to make buying decisions quicker and easier. "In effect, brand loyalty helps reduce people's shopping time," says Blackwell.
To prosper in the new millennium, companies must study how consumers like Cleveland resident Donna Miller, 37, and her husband have come to view their most precious commodity. An Internet content manager with a multinational consulting firm, Miller is relentless in her pursuit of free time. With a two-hour commute to and from work, an eight- to ten-hour workday, a company laptop that keeps her connected to a never-ending stream of e-mail requests, and a seemingly endless to-do list of household chores and personal errands, Miller has finally cried "uncle!"
"I want to spend more time with my family and friends, and I want to find time to cultivate my interests," says this one-time comparison shopper. "I'm not looking for the best price anymore-I'm not looking for deals. All I'm looking for is the best service."
Miller is not alone in her "damn the torpedoes" approach to time hoarding. It seems the majority of time-challenged Americans are willing to pay "whatever" to scale down their lives. Thus, in the 21st century, value will no longer be a matter of price, but a matter of freedom, including the freedom to rest. A 1998 survey by the National Sleep Foundation found that nearly one-third of all Americans get by on six hours of sleep or less. Why? A clue comes from the 1997 Monitor survey of American social values by Yankelovich Partners: 81 percent of employed consumers feel the need to simplify their lives and create more time for home and family, and about 37 percent are making up lost time by getting less sleep; 38 percent just skip the housekeeping.
None of this is surprising to Marjorie Valin of the Washington, D.C.-based American Advertising Federation. Valin says advertisers of the future will need to capitalize on what she calls "the frenetic sense of lost time" and the life-out-of-control angst that permeates modern culture.
"What we [will] value in terms of products and services is time and convenience," says Valin. Technology-everything from television to the microwave to the Internet-has already changed our expectations, Valin says. "We won't be a wait-in-line culture anymore. We're used to getting what we want [and getting it] now."
Consumers on a constrained time budget will likely favor small shops over large ones, spend less time comparing prices, use technology to reduce transaction time, and patronize businesses that make life easier.
No company has learned this better than Kinko's, the copy-shop empire. A few years ago, Kinko's noticed that busy customers in their stores didn't just want to do their photocopying and head home. They wanted to pop in a store, create a computer document, print it out, staple it, glue it, hole-punch it, and gussy it up in a three-ring binder. In response, Kinko's has added computer workstations to many of its stores, along with sophisticated technical support, and basic supplies that turn each of their copy centers into home offices away from home.
Thus, say marketers, businesses that cater to consumer motivations, rather than simply looking at consumption patterns, are the ones that will succeed in the next millennium. How to become a 21st century market leader? Says Edward B. Keller, president of Roper Starch Worldwide, the market research and consulting firm: "Simplify life for consumers and solve their problems. "
The Connectedness Craze In the 21st century, the phrase "we're all connected" won't just be part of a telephone company jingle. This urge to connect will pervade all aspects of consumers' lives. But it will be particularly evident in the way they embrace technology. Increasingly, customers will turn to the World Wide Web for a sense of community-between buyers and sellers, information suppliers and consumers, friends and family.
While they will use the Web to socialize and search, to shop and sell and invest, they will also become far choosier about the sites they visit and use, predicts Evan Schwartz, author of Webonomics (Broadway Books). "Once a site succeeds in hooking thousands, or even millions, of eyeballs, it has to deliver something special," Schwartz writes. "Otherwise, it's just the digital equivalent of an accident on the side of the road. Everyone wants to see it as they pass by, but the commitment ends there."
Contrary to what most people believe, Schwartz says, consumers will not make the Web a mass medium, but rather a niche medium. "There may be tens of millions of people surfing the Web, but unlike network television during prime time, you'll never find a significant portion of them in any given place. The name of the game for any content creator is to find a unique niche, then use the interactive features of the Web to cater to a very specific and loyal group of individuals."
The quest for connectedness will extend into other areas of consumers' lives as well. Even their household appliances will be accessible from remote locations, if consumers have anything to say about it. "What I really want is a computer that monitors your refrigerator, finds out you've just used up the last drop of orange juice, and calls the store and orders it for you," says Michael Miller, editor-in-chief of PC Magazine.
William Barr, executive director of information networking for Bellcore and president of the Smart Card Forum, a nonprofit consortium, predicts that by the 21st century, consumers will be able to consolidate all the information they need on just four smart cards in their wallets. Consumers will demand, however, that all the information those cards contain be useful for their everyday activities. One example: Several universities, including the University of Michigan in Ann Arbor, are already beginning to issue smart cards that contain information on students' identification, dorm meal plan, Internet access account, bus pass, and dorm-access codes, as well as cash for the bus or the laundry. In the 21st century, Barr says, "people won't want to carry 16 cards, like we do today." Forrester Research of Cambridge, Massachusetts, projects that financial firms will issue 4.7 million smart cards in the United States and Canada by 2002, up from 429,000 in 1997.
Consumers will also be looking for more efficient ways to connect with their money. Because greater numbers of Americans will be self-employed, rather than working for large corporations, more people will find themselves managing their own, increasingly complicated investment portfolios. Where to turn? For many, it will be to an online broker. Internet access to financial information and the ability to make Web-based stock purchases or trades is the fastest-growing segment of the financial services industry. Charles Schwab & Company reports that its number of online accounts increased from 300,000 in 1996 to more than two million by the end of October 1998. "Four years ago, the words 'online' and 'investing' were not used in the same sentence," says Tom Taggart, director of corporate communications for Schwab. Predicts Andrew Whinston, director of the Center for Research in Electronic Commerce at the University of Texas at Austin, "The days of people calling their broker are numbered."
The Body vs. Soul Conundrum The 21st century will be the era of the paradox. Americans will continue to stuff themselves with junk food while at the same time exercising to the point of obsession. They will eat no-fat cookies and enjoy their scoop of Haagen-Dazs at the same time. They will increasingly stay home to shop, meditate, and pamper their bodies, but they'll also expect more from the outside world in terms of entertainment.
That's why the 21st century will see the continuation of the trend toward the "entertainmentization" of retailing, says Ira Mayer, president of EPM Communications in New York City. More than ever before, he says, stores will stage events, show videos on large screens, and use CDs as premiums in an attempt to add an entertainment overlay to the everyday shopping experience. Twenty-first century marketers may follow the lead of Wal-Mart, for example, which last November hosted a live Garth Brooks concert that was videocast on televisions in the retailer's electronics departments nationwide.
Another paradoxical force will be an effort by shoppers to transform the ordinary into the extraordinary. This might come in the form of "turning a bath or shower into luxury time [or] making the movie house a multientertainment destination," says Mayer. Marketers have already begun to capitalize on the trend. Example: Magic Johnson's ambitious plan to develop elaborate theater complexes in urban neighborhoods, complete with game areas and a cluster of youth-oriented retailers.
Consumers in the 21st century will likely continue their obsession with fitness, while at the same time consuming record amounts of take-out food. According to the National Restaurant Association, a little more than one fifth (21 percent) of consumers now order food to-go at least once a day, and another 26 percent do so every other day. No manufacturer seems better poised to reconcile the push-and-pull between holistic health concerns and the American appetite for an epicurean quick fix than the Campbell Soup Company, which claims its products can not only save us time, but renew our souls. The new motto: "M'm! M'm! Good for the Body. Good for the Soul." Explains Patrick Murphy, professor and chair of marketing at the University of Notre Dame, "As our lives are getting busier, we're starting to place a higher value on the spiritual. Advertisers have always been able to capitalize on what we consumers place value on."
The Triumph of Individualism Older, wiser, and plumper around the middle, fin-de-siecle baby boomers know what they want. They want to be treated and catered to as individuals. A woman is no longer simply a woman for marketing purposes. She is, for example, a single mom, an ethnic minority, a bicycling enthusiast, a buyer of petite-sized clothing, and a wine connoisseur.
But while baby boomers will continue to drive many trends, the importance of children as consumers in the new millennium has only begun to be recognized, says Ohio State professor Blackwell. Many of today's parents have only one child-as opposed to two or three-and can afford to indulge them in ways parents a decade or two ago could not. Even though those children don't sign checks or earn salaries, they have an enormous influence on spending. On average, Blackwell says, children now influence 17 percent of family spending in product categories ranging from cars to vacation packages, and they control as much as 80 percent of the decisions regarding some food purchases. "By age ten, a child visits stores 270 times per year. Their opinions on brands, types of products and retailers are formed early on, and these preferences stay with them throughout their lives," Blackwell explains.
The ethnic market, too, will benefit from the rush to market individualism. Marketers have recognized that members of ethnic groups don't respond to pitches targeted too broadly, says EPM Communications' Mayer, whose company publishes the "Minority Markets Alert" newsletter. "Ad agencies will have to know that Argentineans respond differently than people from the Dominican Republic, and that Asians who speak Mandarin have different preferences than those who speak Cantonese. There are no more homogenous groups."
Nowhere does the importance of the individual come into play more than in the fashion world. Aging baby boomers want comfortable, classic styles-not necessarily with a designer label. "It used to be that 25-year-old women drove the fashion industry; now it's 45-year-old women," says Blackwell. "Because when you're 45, you alreadyknow what you look good in. If a designer says, 'Crepe is in,' this group may confidently answer that 'crepe is crap'."
As society becomes less pluralistic, ethnic groups will contribute to drive fashion trends. The African-American clothing design company FUBU (For Us By Us), forexample, has taken its baggy pants and other designs popular in ethnic neighborhoods and created a crossover market for them in the society at large.
But in the 21st century, individualism will have its biggest impact on the world of work. If you work in a factory today, you will be much more likely to work in an office job tomorrow. And you will be far more likely to work as a free agent, rather than as a salaried employee. Often, that will mean working from home, without perquisites like health and life insurance or printer paper from the company supply cabinet.
Brock Hinzmann, a technology navigator with SRI Consulting, believes it's not unlikely that we'll see a work future that mimics Hollywood: independent contractors coming together in teams to work on a specific project. "It's amazing sometimes to see all those names at the end of a movie and realize that all those disparate people worked as a one-time team to create a production," Hinzmann says. "It wouldn't be surprising to see the same thing happen in business."
As employment becomes more individualistic, what you once called your office is likely to become far more portable, and ineluctably linked to your private life. Like the tortoise who carries his house on his back, workers in the new millennium will carry parts of their digital homes and offices wherever they go. "If you're taking a vacation in Montana, you'll probably be taking your children and your laptop, as well," says Wacker.
In the 21st century, the lines between consumers' work lives, their financial lives, and their home lives will become not just blurry, but almost invisible.