Retailers – during the past three or four years, have you noticed that traffic is down in your store? Your average ticket, and gross revenues, may be up, but that’s because your average customer is fairly wealthy and is buying the best you have. Still, a constantly declining traffic count is reason for concern.
You may have tried stemming that tide with more advertising, in more places. Perhaps you’ve even tried – forgive me! – a Sale over a few weekends, but it’s tough to move that needle.
The answer may be that it’s a bit out of your control.
In an article in this issue, titled “Demographics Is Destiny”, demographer Peter Francese and luxury market expert Pam Danziger, point out trends that are impacting retail sales.
One of those trends is the declining birth rate in this country. Birth rates in America have not just fallen, they are at an all-time low and below replacement levels. “There were more births during the Great Depression than there are today,” says Francese.
You’ve heard of the retail apocalypse, that vast number of retail stores closing at a fast pace. It’s easy to point at the Internet as the cause of such misery – and it certainly is having a negative impact on the brick-and-mortar landscape – but declining fertility rates, and shifting age and income distributions have impacted the American family in a major way.
Families with children spend more, and their children grow into adults who become customers as well. The retail apocalypse, those massive store closings, coincides with the drop in people having children.
In 1936, at the bottom of the Great Depression, there were 75.8 births per 1,000 women. In 2017 there were only 60.3. By comparison, in 1957, at the peak of the Baby Boom, there were 122.7, and birth rates have been on the decline every since. Today, 50% of women aged 15 to 44 are childless.
The Myth of the Millennial Boom
You’ve heard that the Millennial generation is bigger than the Baby Boomers, some 87 million strong as compared to 76 million Boomers. But the pure number of consumers in the generations is not as important as how they have been absorbed into the consumer market.
The Boomers entered the market with a bang. After the war, a huge pent-up demand was unleashed. By comparison, the Millennials got the very short end of the stick, says Francese. “The first thing that happened to them is they got saddled with $1.5 trillion in student debt. Mortgage lenders looked at them and said, “Sorry, you already have a mortgage, called a student loan, and I’m not going to give you another one. So they have mortgage-level debt but no house.”
If traffic is down, blame it on demographics.