EDWARD S. SUCHERMAN & ASSOCIATES LTD.

DEAR READERS: MY BLOG IS NOW ON WWW.EXAMINER.COM, CHICAGO BUSINESS.  THE FIRST ARTICLE FOLLOWS:

 

  Our nation and the Chicago metro area are deep in what seems to be a jobless recovery from the Great Recession.  We are all intensely interested in U.S.  wars in the Middle East, the energy and climate crises, healthcare reform, and, locally, parking in Chicago, terrible schools, and gang violence, not to mention how well our very own local genius, Barack Obama, is performing as President.  Chicago is feeling the approach of winter – it’s raining a lot and getting colder, day by day.  But we each still need to make a living, and few of us will do this very well until our formerly great middle class returns.  (Right now, we are a have-and-have-not society.)  And that will not happen until jobs become plentiful again.

 

Here in Chicago, and nationally, our markets have changed – no matter what our products.  These are not just economic changes – they are also demographic and emotional.  Working women have gotten a lot of press lately.  Many are breadwinners now, but they are still paid less than men – bringing down the standard of living for all those families. These women are stressed, unhealthy, often alcoholic, in need of nurturing, neglecting their children and husbands, and being neglected.  Change is hard, and this appears to be a permanent change, just like our population quickly changing to a non-white majority.

But first and foremost, the Baby Boom is aging.  Chicago-area small businesses have been serving this huge market since 1946 (the Baby Boom includes the 73 million Americans born for 17 years following World War II – from 1946 to 1963).  Three years ago, the upper edge reached 60.  And soon after, the Great Recession began. 

As people retire (or are retired because they can no longer get jobs), they begin taking money OUT of the market (pension plans, 401Ks, and the banks), not putting it in.  Beyond all the terrible greed that caused the recent crash, Boomer demographics played its part.  You can always count on demographics – they never lie.

As Boomers passed middle age, they stopped buying art, large homes, and furniture.  They use coupons.  They spent disposable income on college for their children and toys for their new grandchildren.  They were/are sandwiched between their kids and their elderly parents.  Being a caregiver quickly takes over one’s life. (I know – my parents died about 10 years ago, and those last two years changed me forever.)

And Boomers cannot sell their homes, especially those McMansions along the north shore, northwest to Barrington Hills, west to Oakbrook and Hinsdale, and south to Burr Ridge.  So they are often cash strapped.

So…what are their needs…what are they buying?  They still insist on quality, especially in food.  But they may be buying it more at grocery stores than restaurants.  They buy green and energy saving products, especially in remodeling.  They buy multi-media technology for their home offices, but the cost of computers and LCD TVs  (going down) is more to their liking than the costs of tuners and speakers (very high). Apple computers, so service and consumer-oriented, will take a larger share of their pie than PCs, especially as Macintosh prices go down.   Since Boomers cannot sell their homes, they will be putting in elevators, larger hallways, different lighting, etc. as they cope with old age (and with their parents, who may be living at their homes).  Boomers are totally unwilling to retire quietly, so they are major buyers of healthcare.  Even their cars have changed: Hummers have gone “out” with greed – today, it is “cool” to own a hybrid. Even Cadillac is coming out with hybrids.

After the past two years, Boomers (like other demographic groups) are a jumble of emotions.  Three vital ones to understand are a complete lack of trust, frustration, and fear.  Of these, fear is the main driver…fear of keeping jobs, fear of unemployment, fear of a loss in their portfolios, fear of foreclosure, fear of losing health insurance, fear of change, and overall fear of tomorrow.  The frustration is out of a sense of betrayal, by employers everywhere.  Boomers are experienced, educated, healthy, yet too old to be considered for jobs they know they can do better than anyone else. 

Finally, after the despicable actions of the last administration, our own Illinois governors and politicians (many of whom are own making our license plates), employers without loyalty, guts, or common sense, and Wall Street’s unimaginably unethical  actions, almost all bonds of trust with companies and government are broken.  Along with market share, you need to gain share of trust.  This needs to be addressed in your marketing; it is also a great opportunity.  When people have no brand loyalty and are angry enough, they are willing to try new products, to change.  That’s how Barack Obama was elected.  Forward thinking managers can gain market share right now, if they are aggressive and smart in their marketing efforts.

I believe Boomers will soon find it “cool” to buy American and to join Unions.  There is a lot of empathy throughout the Chicago area for friends and relatives who have been treated poorly in their companies, and (unfairly) lost their jobs and their homes.  I have never thought of myself as xenophobic, but I recently found myself frustrated and resentful when dealing with Dell Computers, an American owned company operating mainly in India. (Call them and see what I mean.) Two key documentaries recently hit home with me: Michael Moore’s “Capitalism, A Love Story” and a new HBO documentary, “Schmatta: From Rags to Riches to Rags.”  The latter is the story of New York’s garment district. If you have Comcast cable TV and get HBO, it is currently available On Demand for free.  Nobel Prize winning economist Paul Krugman wrote today in his New York Times column that the Chinese government has not played fair with their currency.  I’m all for every working person in the world having a good job, but not at my neighbor’s expense.

I am a Boomer, and I am also starting to resent Wal-Mart and the other discounters, despite their low prices.  I would rather spend a bit more, get slightly better quality, and give an American a job — a good job. I have been anti-union my entire life, but I now feel differently.  Strong Unions mean good American jobs.

I love my country and my fellow countrymen (and women).  My Jewish grandparents left Kiev and Lithuania in 1904, walked across a very dangerous Europe, got on boats to America, and somehow legally entered the country through Ellis Island.  They were right out of Fiddler on the Roof.  I have never forgotten how lucky I am to be an American, and I kiss the ground each day.  I think most Americans feel the same way.

As Chicago goes, America goes, and Chicagoans need jobs.  Made in the USA will be an important way to build a bond of trust and sell to Chicago area Baby Boomers in 20.

Ed Sucherman

THE MARKETING MACHINE

www.edsucherman.com

edsucherman@gmail.com

 

 

Tags: Demographic change, Fear, Market Share //