The Bankwatch

Tracking the consumer evolution of financial services

Signs we are in the midst of a demographic shift

Looking backwards we can readily see the impacts of large demographic cohorts on economy, fashion, trends, and yes – banking.

Past examples:

  • housing value growth
  • stock market growth
  • cruise ship growth
  • fast food growth
  • music and radio genre rise and fall

Lately I have been sensing we are in the midst of another big shift from the Baby Boomer cohort.  That cohort is age 51 – 69.  That would place them in the stock market/ cruise ship group.  Despite being the largest cohort, their income is flat, savings flat having already largely inherited from parents, and they are not going to significantly create new trends, rather will continue what they have been doing.

The cohorts that will move things and shape new trends are the Millenials (Age 18 – 34) and the Gen X (Age 35 – 50).  They are in their income growth years, bring their cohort beliefs, expectations and fears, and they will shape the next 20 years.

Some examples I have observed recently:

  • Q107 Classic Rock this week advertsiing that all rock is classic rock.  Signs that the Led Zeppelin generation is not listening anymore.
  • McDonalds in trouble:  Millenials have higher expectations, and are not attracted to Ronald McDonald.  This could come back as the large cohort Millenials get married and have kids but thats 10 years off.
  • Apple and Samsung growth:  the conversion to smart phones has been immense and relativley instant.  Its hard to imagine that smart phones only arrived in 2007, and didnt get past effectivley beta until 2010. It should not be a surprise that Apple iPhone growth is growing exponentially given the growth of the Millenial cohort, supported by the sceptical Gen X, but it won’t be forever as the Millenials appetite for smart phones flattens out.
  • Resurgent interest in guys fashion, from striped socks to the Bieber bob.  This is a stark contrast from Boomers with Levi’s and army jackets.

Relevance to Bankwatch:

The examples are incidental.  The point is that a large cohort has signifcant economic and beahvioural impact that reflects in everything from purchase patterns to banking.  Its essential we understand not just the design of a mobile website, but the thoughts, beliefs and needs, which may not be what we expect.

Written by Colin Henderson

January 30, 2015 at 01:01

Posted in Uncategorized

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