Boomers Dance to a New Beat

by David K. Foot

Reprinted from the Globe & Mail, January 9, 1998.

Demographics: Now that the kids are moving out and debts are under control, the dominant generation is bursting from its cocoon.

Cocooning is dead, the trend-spotters have proclaimed.

In the eighties, North Americans hunkered down in their house-fortresses with remote control to avoid an increasingly unsafe world. Now, this cocooning trend, first labelled by guru Faith Popcorn, is in reverse.

Canadians and Americans are watching less TV and going out more to movies, museums, the performing arts and restaurants. Crime rates have stopped rising and, in many jurisdictions, they are falling.

All forms of home entertainment are either stagnant or declining in popularity. The Internet does not seem to be catching on as home entertainment or as a shopping vehicle. There has been a resurrection of city streets and a renewed concern for communities. According to a recent Globe and Mail article, we are rejecting the "bland fruits of wired isolation".

But is all this so surprising? A careful understanding of demographic trends provides a logical and easily understood explanation. For managers and marketers, it also serves as a foundation for anticipating new trends.

In a person's teens and 20s, "action" is important. The downtown core of major cities provides this action. Being "grounded" by a tough parent is real punishment; moving out, usually into a city apartment, is a common goal.

Growing up into the late 20s and early 30s often means partnering and family formation. For many parents, the city core doesn't seem like a great place to raise kids, so they buy houses in the suburbs. This means a mortgage and other loans to purchase furniture, appliances and the minivan.

So it was with the baby boomer generation, which has dominated, if not determined, postwar economic and social trends in North America. The 10 million boomers in Canada, born between 1947 and 1966, comprise the biggest generation in the history of this country. Watching them can provide an understanding of these trends.

The first boomer became a teen-ager in 1960. So the sixties and seventies were dominated by boomers moving through their teen-age years into their 20s. They rushed into cities, stimulating massive urbanization. They rented apartments, driving down vacancies and increasing rents. They went to movies and rock concerts and they ate lots of cheap food.

In 1977, a significant event went almost unnoticed - the first boomer reached the dreaded age of 30. The early boomers started buying homes in the suburbs. By the mid-eighties, the new trend became an avalanche. Suburbanization took off.

Debt levels soared and the "echo generation" was spawned. Minivan sales took off. Young children and lots of debt put a damper on going out. Technology and TV in particular, including video rentals, became the main entertainment media. Cocooning was established.

So Faith Popcorn was right, but it was not because of new societal values. The biggest generation in history was leaving its action years behind and moving into its family ones. Not surprisingly, family values emerged as a new social trend. Rental housing, movie theatres and take-out restaurants experienced much slower growth and, in some cases, decline.

Spending growth was focused on family and home. Pet-food sales were still brisk but convenience-store sales sagged. Boomers started paying off their loans and mortgages, leaving no cash for luxuries or savings.

With kids to raise and careers to manage, the boomers in their 30s and 40s were running "99 Lives" - another Popcorn trend. They were trying to be good parents to their kids and good children to their aging parents. They were working overtime and competing for promotion to ever-fewer mid-management positions. Woe betide any organization that wasted their time. The "Vigilante Consumer" had arrived in full force.

But last year, another watershed was reached - the first boomers turned 50. This is mid-life crisis time. The kids are beginning to leave home and those sprained ligaments are taking longer to heal.

Running shoes have become walking shoes, and the treadmill purchased to replace visits to the fitness centre now induces guilt. Resting has become a pleasurable activity, especially at the cottage. Anyone ignorant of the power of demographics might think values are changing again.

With lower interest rates and evaporating loans, there is more discretionary income, making it possible to afford a luxury or a sports-utility vehicle, a restaurant meal, and a show.

The teen-age or twentysomething kids don't need babysitting any more, so going out is possible again. But the show is less likely to be a movie or a rock concert unless, of course, the Rolling Stones are back in town. Increasingly, the lavish musical, the symphony and maybe the opera hold more attraction.

So boomers are emerging from their cocoons. Surprise! They are watching less TV - home entertainment is dropping in popularity - they are shopping in their neighbourhoods and they are not using the Internet. Their beloved pets are aging and the vet is becoming as familiar as the doctor.

Their parents are also getting old and mortality has come closer to home. Aging has entered a deeply psychological, almost spiritual phase. Boomers are snapping up books on the topic, provided the print is large.

But the seven million "echo" kids are also having an impact. Movie attendance is rising, mainly because of the increased numbers of teen-agers. Similarly, the growth in confectionery, pop and some fast-food sales has little to do with boomers trying to relive youth. Their echo kids born in the eighties are delivering these trends.

The marketing of the future is becoming more complex. While the leading boomers are killing cocooning, their kids are reigniting the trends of the sixties. Rock stars have a bright future, as does new technology. Of course, it should not be surprising to see a reversal of the downward trend in crime rates as the echo generation enters its prime crime-prone ages.

But will this drive the boomers back to cocoons? Hardly. They are finding time to volunteer, to give to charity and to support their communities. They are increasingly worried about pensions, investing in the market and thinking about moving out of the urban rat race. These are the trends of the future.

The boomer generation is predictably shifting into the next phase of life: they are beginning to move from parenthood to grandparenthood.

Managing this new trend is both a personal and a societal challenge, with all the associated opportunities and tribulations. Demographic analysis can provide us with a window to understand these changes, to disentangle them and to predict them. What more could the successful manager ask for?

David K. Foot is a professor emeritus of economics at the University of Toronto, and co-author of the Boom, Bust & Echo books.