Study of demographics by US analysts says that businesses should prepare for 'generation Y' - the largest in history
It has long been the case that the US has paved the way for UK trends. BikeBiz calls on respected industry consultant Elliot Gluskin to shed some light on when the next major bike boom is due and how to prepare your business…
Words by Elliot Gluskin, Gluskin Townley group.
Having spent most of 2012 reviewing and analyzing both public and private data sources, we are projecting the next ‘Bike Boom’ in the US to arrive sometime between 2020 and 2022, and this one will make the last one we experienced back in 1970-1973 seem like a speed bump.
What is driving our projection? Simple, it’s all about demographics!
Mr. Jeb Bush, the former Governor of Florida, was recently quoted as saying “demographics are destiny and if you just ignore it, you do it at your peril.” While spoken in the broader context of issues facing the US from a political standpoint, his comments are just as poignant when it comes to the biggest issue facing the American bicycle industry – generational change.Article continues below
Having been the driving force behind the growth of the U.S. bicycle industry over the past three or more decades, the Baby Boomer generation – those born 1946-1964 – are now between 48 and 67 years of age today and they are no longer driving the industry’s performance. Rather, Generation X is now firmly in control of the U.S. bicycle market.
As the above chart shows, Baby Boomers are falling further back into history, similar to what the Silent Generation (those who are 68-87 years old) has already done. The American Bicyclist Study, which was conducted in February of this year, confirmed that adult consumers making up Generation X are now the core consumer base for the US specialty bicycle retail channel; that they are spending significantly more than Boomers and are more active in bicycle riding. They now occupy the sweet spot for the American bicycle industry which is now consumers in the 30-36 age range. However, those who believe they will be garnering higher sales have not taken into account the 11 per cent Factor.
Another look at the graph shows that the numbers of births during the Generation X timeframe – particularly the 1972-1976 periods – are the lowest of the three generations, resulting in nine million fewer consumers coming from this generation than there were Boomers. This 11 per cent difference is what has caused the US bicycle industry to experience stagnant unit growth over the past ten years.
The chart above shows this stagnation in both total unit sales (staying within the 12-13 million range over the past 12 years) and particularly within the specialty bicycle retail channel (the bike shops) which have flatlined at 2.5 million units.
While the American Bicyclist Study’s report, The Generations, shows that Generation X represents nearly half of all adult bicycle owners compared to Boomer’s one in four; and they are currently spending 29 per cent more on new bicycle purchases, expecting nine million fewer consumers to spend as much as, or more than the Baby Boomers before them is not realistic, or even possible. It’s the 11 per cent Factor at play.
So, what will bring about the next Bike Boom?
The next Bike Boom will be caused by Generation Y who, born 1985-2004 and currently 8-27 years old, will be at 100 million, the largest generation in history. Among this generation there are approximately 43 million now above 18 years of age with another 57 million adding to the ranks of adult consumers every year for the next eight to ten years.
Looking at the above three generations table, you can see the potential impact on bicycle purchases and spending that the 20 per cent of Generation Y has already made. Compared to Baby Boomers, a higher percentage of adult Gen Y consumers planned to buy a bicycle this year and are also planning to spend 134 per cent more on that next bicycle. Imagine what will occur when all 100 million hit the market as adult consumers.
Referring again to the US Birth graph you’ll see that Generation Y has been consistently above four million births per year over the past decade, a level of consistency not seen since the Baby Boomers. But it’s not the sheer numbers alone that will cause the Bike Boom, but the mindset and focus of these consumers. Those Gen Y consumers already above the age of majority have been driving the growth of urban bicycling activity in many of the major metropolitan areas of the US Gen Y consumers are shying away from driving cars and using public transportation and the bicycle to commute to work, school, and errands. One can also opine that this is influencing the growth of bike sharing systems in cities and towns of all sizes around the US
The younger Gen Y consumer, 8 to 17 years of age, is growing up with an awareness of the importance of the environment and the negative impact on health caused by obesity and sedentary lifestyles. So the bicycle will be seen as an easy fix for improving both issues. Of course, their world is connected by technology and social media, so it’s become natural to discuss the good and bad of retail shopping experiences. Let the specialty bicycle retail channel be warned now to prepare for what’s coming.
By 2020, Baby Boomers will have taken the place of today’s Silent Generation on the sidelines to watch and wonder at the world being quickly created by the younger Generation X and the full force of Generation Y. By 2022, Generation X will have taken the place of today’s Baby Boomers as they begin to age out of activities like bicycling but Generation Y’s 100 million adult consumers will be actively engaged in the communities of interest they will have built and bicycling will be one of those communities. So the next Bike Boom will be upon us in the US and it will be glorious.