Analyzing American Consumers in 2020
Aging Boomers will make up one of the most important consumer segments in the 2020 economy
Five years from now, U.S. marketers and retailers will be dealing with a very different consumer. On average, household heads will be older, less likely to be non-Hispanic white and more likely to be women. The average consumer—except for those in multicultural population groups—will be living in a smaller household and will be much more likely to be living on his or her own. The kids and teens market will have an increasingly multicultural look because of a sustained decline in the birth rate among non-Hispanic white women, while the youth market will lose buying power because of a decline in the population of 18- to 24-year-olds.
Aging Boomers will make up one of the most important consumer segments in the 2020 economy. Historically, older consumers have spent less in absolute terms and have focused their spending on necessities such as housing and healthcare rather than discretionary items such as entertainment and home furnishings. Robust consumer spending in 2020 will depend partially on whether Boomers will be able to change the way consumers spend money as they get older. Their current spending patterns suggest they are likely to do so.
Another key factor shaping the marketing and retail landscape in 2020 is whether the mindset of Millennials will evolve as they mature. Over the next five years, as members of the leading edge of the Millennial cohort move into their late 30s, the question is whether Millennials will continue on the path of minimalism and sharing that marked their consumer culture in 2015, or whether they will switch into more traditional patterns of homeownership and consumption.
Consumer confidence is another wildcard in economic projections. Data compiled by Packaged Facts National Online Consumer Survey suggest that American consumers in 2015 are relatively optimistic about their personal prospects in the years leading up to 2020. Seven in 10 either strongly or somewhat agree that “I am optimistic about the future” and more than 60% think their job prospects look good over the next few years.
“Looking ahead to 2020, in some areas American consumers in 2015 have a less dystopian view of the future than might be expected,” says David Sprinkle, research director, Packaged Facts. “ Less than a quarter of consumers think that their food supply will be less safe and only a third believe that global warming will make life harder in five years.”
Still, consumer views of the economic future of the country raise some flags about how well the economy is likely to fare in 2020. Less than a third of consumers believe that the American economy will be better off in 2020 than in 2015. However, this gloomy vision of the broader economy is tempered by the fact that a significantly higher percentage (42%) believe that their personal financial situation will be better off in 2020.
These findings were published in American Consumers in 2020, the latest report by market research publisher Packaged Facts. Learn more.