The New Consumer: Older, Wiser, and Less Trusting by Ken Bernhardt Regents' Professor Robinson College of Business, Georgia State University Atlanta Business Chronicle Column March 25, 2005  Previous columns have made it very clear that today's consumers are far less trusting than those of the past. So what needs to be done differently now to regain the confidence and trust of consumers? The first thing necessary is the recognition of how the consumer has changed. For many marketers, the typical target audience definition is the age group 25 to 49 or 54. From 2000 to 2015, the 25 to 39 year old age group will actually decline by 3 percent and the 40 to 54 group will only grow by 2 percent. On the other hand, the 55 to 69 age group will grow by 64 percent, just slightly faster than the 85 plus group. Our stereotypes must change - - my mother is 89 years old, still driving, traveling, shopping and spending lots of money, as are her friends of the same age. The latest research by Yankelovich Partners shows that on average, baby boomers don't perceive "old age" as beginning until age 79.5. With more than 11,000 baby boomers hitting age 60 each day starting next year, it is important to understand that they think differently than aging consumers of the past. Between two-thirds and 80 percent of boomers say they will continue to work past retirement age - - 35 percent mainly for enjoyment and only 23 percent mainly for income. It is no longer appropriate to only focus on the young (if it ever was appropriate). Much of advertising today appears to be directed at "white America." Yet a recent University of Georgia's Selig Center for Economic Growth report indicated that the buying power of African Americans in Georgia is $49.5 billion (yes, billion and this is projected to increase to $71.7 billion by 2009). The growth in black buying power in Georgia from 1990 to 2004 was 206 percent. Georgia was the only state on both the Top Ten Largest Market list and the Top Ten Fastest Growing list. Hispanics in Georgia account for $10.9 billion of buying power, a number that grew 710 percent between 1990 and 2004 (no, that is not a typo and it is expected to almost double in the next 5 years to $20 billion). The Asian market in Georgia is about the same size as the Hispanic market and grew by 453 percent from 1990 to 2004. Atlanta has been gaining population at the rate of 366 people per day, and many of these are members of minority groups. Perhaps most telling are the following statistics: for people age 70 and older, the ratio of white people to people of color is 5 to 1. For people under 40, the ratio is 2 to 1, but for those kids age 10, the ratio is 1.5 to one. Do you think that has any impact on how consumers will see the world and view your advertising in the coming years? In the 1950's, 80 percent of households were some form of married households. The number today is just over half, and it will be less than half by 2010 (which sounds far away, but is only 5 years - - does the year 2000 seem like a long time ago to you? It doesn't to me and that is also 5 years from today). The percent of households with a husband, wife, and one or more kids under age 18 is now 24 percent and it will be 20 percent or less by 2010. The role of the female in the household has changed dramatically in recent years as the employment gender gap has narrowed significantly, and today one-quarter of married women in dual income families earn more than their spouses. In addition, women have majority ownership of nearly 30 percent of privately held American businesses. I have already talked about how much smarter consumers are today. According to American Demographics magazine, in recent years, Atlanta has led the nation in attracting college educated "net domestic in-migration." In one recent study, 61 percent of the people said their IQ was above average. Does your advertising treat people as if they had above average IQ's? Consumers today have far more information available to them than they had in the past. On top of that, the world has changed from consumers being passive recipients of information sent out by advertisers to proactive seekers of information whenever they want it, 24/7. Much of the information consumers seek today is generated by other consumers, not by advertisers. Consumers value experiences more than goods today. If you haven't read The Experience Economy by Joe Pine and Jim Gilmore, you should. They use the example of a kid's birthday party to describe what has happened to our economy. When many of us were kids, our moms made a birthday cake from scratch. A few years later, Duncan Hines and Betty Crocker sold moms on the idea of using a cake mix and just adding eggs and milk to a mix to prepare the cake. A few more years and we were buying the cake already prepared from a bakery or supermarket. Today what happens? We outsource the whole party to Chuckie Cheese and buy the party complete with cake. This change in values has significant impact on how we deal with consumers and how we advertise to them. So, given all the changes in the marketing environment, what changes are you making in your day-to-day activities? Do you understand today's consumer? Are you developing your communications to consumers taking into account the changing demographics, the changing values, the attitudes toward honesty and authenticity? As a friend of mine asks, are you selling the lifestyle, not the stuff? Are you treating consumers with respect? Are you contributing to the health and well being of your community? These are the things that will determine your success in the coming years. I wish all those reading this column much success in responding to the many challenges facing advertisers and marketers today. It truly is a new world out there, and those who recognize the changes described here will be those most able to successfully respond.