20/20 Vision

American Demographics, Dec, 1999 by Joan Raymond

Four futurists offer up scenarios that could define consumer behavior and consumer markets in the next two decades. We throw in some data to back up their claims. Then the real-world practitioners chime in.

Staying ahead of the future isn't for the faint of heart. Despite the minute-by-minute information glut, businesses can have a hard time keeping up with "what's now," let alone with "what's next." Even for the most intrepid of the demographic sleuths known as scenario planners and futurists, sizing up the long view can be like an extreme sport.

"The future is a convergence of forces and discontinuities - or wild cards - that drive change," says futurist Ryan Mathews of FirstMatter, a consulting firm based in Westport, Connecticut. "No one was smart enough or creative enough to predict that in the 1960s, when we were preaching `free love' in Golden Gate Park, that only 30 years later we would have the `new celibacy.' That's the result of a wild card."

But in today's fluid, fast-changing business environment, understanding the trajectory of consumer trends - and identifying the potential wild cards that can skew that course - can mean the difference between riding the wave and getting buried by it. American Demographics asked Mathews and three other futurists to offer a scenario for how current patterns may evolve by the year 2020, and discuss what that will mean for marketers as they plot their business plans for the next century.

E-POWER SHIFT

Teresa Duke of Medina, Ohio, calls herself a "21st-century techno-wannabe." First thing every morning, the 35-year-old heart-transplant coordinator and single mother goes online to check her e-mail and stock quotes, read some news, and tune into streaming radio as she sits down with her first cup of coffee. Like most professionals, Duke is strapped for time. She does the majority of her shopping via the Internet: clothes, contact lenses, books, even skateboarding shoes for her 17-year-old son, T.J. She's purchased plane tickets and made hotel reservations on the Net, and never plans on calling a travel agent again.

"I live in the dot-coms," Duke says. When it came time to buy a new car, she turned to her trusty computer. She accessed 80 research sites, queued up the online loan calculator, and ultimately decided on a 1999 Honda Civic. Then she e-mailed four Internet car-buying services with her choice, and wound up going with Autobytel.com for two simple reasons: speed of download and online photos of the car she wanted. "No way will I ever again listen to a car dealer's spiel," says Duke.

Techno-wannabe? Duke is actually on the forefront of what Greg Schmid of The Institute for the Future calls the "sophisticated consumer": an educated, wired professional with some significant disposable income. She is also pressing the need for what Steve Barnett, a senior partner with OgilvyOne and an e-commerce professor at the Wharton School, calls "business transparencies" - the breaking down of barriers between consumers and the products and services they desire. Personalized, individualized, customized, these transparencies will give the consumer substantial leverage by the year 2020.

"This is about power being shifted to the consumer," Schmid says. "People have access to information from a variety of channels, and they are going to use those channels." Duke and her cohorts currently account for about 20 percent of the American public, according to an analysis by the Institute for the Future that seeks to quantify the impact of educational attainment, technological sophistication, and discretionary spending power. By 2020, Schmid says, when Duke is 55-years-old, these sophisticates will make up about 60 percent of the American buying public.

While e-commerce and the e-consumer are still evolving, the foundation for the future is already cemented, says Barnett. Today, there are almost 200 million people on the Internet worldwide; in the United States alone, 80 million. "I think it's going to be extremely important for companies in the future to personalize and target their products to individuals, rather than demographic stats," says Rosi Ware, president and CEO of marketing giant Millward Brown's Americas division. Because nearly every company and every consumer is going to have every available technology, "companies are going to have the opportunity to know their markets better and consumers are going to know those companies better."

CONFLICT OF INTEREST

But availability is not the same as access. America is becoming a nation of "new immigrants," says Mathews of FirstMatter. More than 13 million people arrived between 1900 and 1914, but as the century ends, the country is in the midst of another immigration boom.

According to the U.S. Census Bureau, more than 25 million current U.S. residents - nearly 10 percent of America's population - were born elsewhere and 43 percent are of Hispanic origin. Nationwide, there are approximately 30 million native and non-native Hispanic residents, and the number is expected to grow to 53 million by 2020. And they will be younger than average. By 2020, the median age of Hispanics will be 28.8, versus 37.6 for the total population.