Why Holiday Sales Are Disappointing

I just heard on NPR’s Morning Edition this morning that holiday retail sales are running 3.7% behind last year’s sales. Of course last year’s holiday sales were also a disappointment even though they ran a tad ahead of 2002 holiday sales – which also fell below original projections.

Would you say there’s a trend here? Indeed so. And it will show up in 2005 holiday sales. And in 2006 sales. This trend is an economic side effect of the aging consumer universe.

The Yankelovich Monitor as well as other consumer trend reports say that people seem less interested in getting more “stuff.” What they do want more of is simplicity in their lives. This marks the perennial midlife shift away from the quest for life satisfaction in “stuff” toward its pursuit in experiences.

This paradigm shift in values will become even more evident over the next decade as the last of the boomers reach 50. On average, consumer spending peaks around the age of 48, then begins a gradual tappering off until the middle 60s, after which the decline accelerates. ( More on this in the next posting.)

Because population growth among adults aged 18-44 is occurring at something akin to a snail’s pace, few consumer product lines will experience robust growth over the next 10 years. For the most part a company’s sales growth will depend on its ability to take customers away from its competitors. As Joe Pine and Jim Gilmore, authors of The Experience Economy argue, this is best accomplished by focusing more on the customer experience – the new arena in which the contest for consumers' attentions and affections is most intense.

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Thank you, Tom Peters:

MVP/Book. My top pick for 2004 is Crucial Confrontations, by Kerry Patterson, Joseph Grenny, Ron McMillan, and Al Switzler… My runner up choices are: James Suroweicki's thought-provoking The Wisdom of Crowds …and David Wolfe and Robert Snyder's Ageless Marketing, by far the most persuasive book yet about the stupendous Boomer-Geezer market opportunity.

Tom, some of my colleagues who are militantly anti-ageist will take exception to the term “geezer. But hey, at age 71 I guess I’m a “geezer”. Interestingly, the term probably derives from the Scottish guiser, meaning one in disguise. Also, at age 62, I guess you’re a geezer, too. In any event, I’m deeply honored by your pegging Ageless marketing as one of two runner-up books to your top pick for 2004.

P.S. Listen to what Tom said earlier this year about Ageless Marketing.

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[Fraser]

I’m a real estate “geezer”.