As he began his keynote address during Azione Unlimited’s Spring Conference in Arizona last month, Tim Costello asked for a show of hands from “all of the GenXers in the room.” We GenXers then looked up, unbuttoned flannels partially obscuring our Nirvana T-shirts, and reluctantly raised our paws for what was sure to be some sort of unwelcome joke at our expense. Costello then said, “I’m going to tell you why all of these people raising their hands screwed up our country.”
At least that’s how I remember it…
Years ago, Costello, from the home building industry consortium BDX Inc., quite accurately predicted the housing market bubble collapse to a skeptical CEDIA Management Conference crowd. Now at Azione he was telling us how the varied spending habits of Boomers, GenXers, and Millennials were going to affect consumer spending for the next 10 to 15 years.
Costello knows our channel well, acknowledging correctly that the “AV business” was built to serve the Baby Boomer generation, currently aged 51 to 69, but that their needs and spending habits are changing as they age. While encouraging our channel to keep working with them over the next 15 years as they “downsize without compromise,” we need to plan for life without them.
Unfortunately, the next generation (GenXers, age 38 to 50) has 25 percent fewer people than Boomers. “Seventeen-million fewer people makes a huge difference!” Costello said, also noting that GenX also was hit hardest by the housing market collapse.
Instead, he said, the future of this industry (and the U.S. economy) will soon be in the hands of Millennials, aged 18 to 36. I was surprised at some of the data Costello revealed about this much-maligned group. For starters, it’s a bigger demo than the Boomers (83 million versus 75 million), and it’s the most highly educated generation in U.S. history. But, they’re getting married at half the rate of Boomers, which delays everything associated with “marriage commerce.” The myth is that they’re disenfranchised, but the reality is that they’re “overly optimistic,” according to Costello. Not all are broke, either. Their generation has 23 percent of millionaire households and 15 percent of $2-million households, but many are delaying home purchases because their careers are so volatile.
They’re also obsessed with technology. “It’s a digital-first generation, which should change the way you think about commerce,” Costello said. “They’re the first to make major purchases without requiring an in-person inspection.”
Many of you built your businesses to cater to the needs and desires of Boomers. We’re at a critical inflection point now, however, and you need to start thinking about who your customers are now but also who they will be in the next 10 to 15 years. Study the demographics in your market, but please don’t count on GenX. Apparently we’re a lost cause.