Key Demographic Changes Seen Altering Market
Kitchen and bath retailers and manufacturers should ready themselves for a long, slow demographic shift that will eventually create new markets, alter the customer base for kitchens and baths, and impact consumer buying patterns for the home.
That's the word from demographers, who point to a number of key
population shifts which suggest that kitchen/bath professionals
will eventually have to change their perception of potential
clients, work harder for business, change their marketing message
and product mix and alter the way they conduct their
Among the key demographic trends promising to impact the kitchen and bath market over the next decade are the following:
- America is becoming an increasingly multi-lingual nation.
According to a recent issue of American Demographics magazine, almost one in five Americans now speak a language other than English at home. In six metropolitan areas, including Miami and Laredo, TX, residents who speak only English are now in the minority.
This is not confined just to a few cities, however. Among communities where at least 5,000 inhabitants speak a language other than English at home, the Charlotte, NC area saw a 338% increase in people speaking Spanish and a 182% increase in people speaking an Asian language between 1990 and 2000. The Fayetteville, AR area witnessed a 609% increase in Spanish speakers in the last decade. And, during that time span, the Green Bay, WI area saw a 354% increase in Spanish-speaking people and the Lincoln, NE area witnessed a 172% increase in Asian language speakers.
The implication for kitchen/bath retailers should be clear, demographers suggest: If your business is operating in English only, perhaps you ought to rethink that for the future.
"You will miss out on this growing market unless you prepare now," one market analyst recently noted. "Pay attention to population shifts in your area, and make an effort to have literature in those languages. You may also wish to recruit employees who are fluent in both English and the indigenous language."
- U.S. household growth in the future will be dominated by
Significant shifts in the customer base for kitchen and bath retailers are inevitable based on the latest statistics.
For example, demographic trends are expected to result in an increase of 11.7 million U.S. households between 2000 and 2010, with the total number of households rising from 105.5 million in 2000 to 117.2 million in 2010, according to figures compiled by the Joint Center for Housing Studies of Harvard University. However, unlike household growth in the past, the changes will be most heavily impacted by growth in minority (black, Hispanic, Asian and others) households, which made up only 25% of all U.S. households in 2002 but are expected to grow by 64% through 2010. By comparison, white households which made up 75% of all households in 2000 are expected to grow by only 36% over the same time span.
The implication for kitchen/bath retailers is clearly evident: "You've got to recognize these changes and understand the lifestyles, cultures, needs and purchasing preferences of these new types of customers," the market analyst said.
"The kitchen and bath is no longer a static, homogeneous market of easily categorized, predictable, mainstream buyers. It's splintering into smaller, more diverse groups.
"Kitchen and bath professionals will need to understand what makes these potential customers tick. They'll need to recognize that these people will not eventually just blend into the shrinking mainstream, but will only become more determined to retain their traditions and lifestyles, and will only become more and more influential over time."
- The average age of clients will be changing.
The youngest of the massive "Baby Boom" generation were born in 1964. These Baby Boomers will turn 40 and reach what is considered prime remodeling age next year.
After that, however . . .
By the year 2012, there will be a 12% decline in the number of people aged 35-44. That's the age bracket, statistically speaking, in which most consumers get a kitchen or bathroom remodeled. The number of people in that age group increased 2% a year every year during the past decade. However, starting in 2004, there will be just over 1% fewer people in that age group each year for the next 10 years.
That's a big change, and it will mean tighter competition and a shrinking market for traditional kitchen and bath remodeling to that age group, demographers note.
It will mean kitchen and bath dealers, designers and remodelers can expect quite a few other changes, as well, demographers suggest.
For one thing, the number of people in the 20-to-34 age range the so-called "Echo Boomer"generation is going to grow some 10% over the next decade. And, because 34% of women and 29% of men in this age group have at least a bachelors degree which is, incidentally, an all-time high these potential customers will have an average income that is likely to be significantly higher than current income levels.
Although a large number of these consumers have traditionally rented rather than purchased homes, that may not continue to be the case in the future, demographers said.
They do note, however, that business in general and kitchen and bath industry professionals specifically are going to have to change the way they market in order to capture the attention and dollars of this younger
"For one thing, kitchen and bath retailers will be competing for the disposable dollar with items such as childcare, toys, and infant wear," one market analyst observes.
However, while younger consumers may be a tougher sell, there's one promising aspect of all this, demographers believe.
"The Baby Boomers, who triggered the industry's greatest period of growth and prosperity, will still be out there, now looking for bathrooms and kitchens for people with limited mobility," he notes. This well may be the newest hot growth area, and savvy kitchen and bath professionals will gear their marketing accordingly.