Last month we talked about the opportunities and challenges facing today’s real estate broker as a direct result of the squeeze between current economic forces and the rapidly transitioning demands and expectations of a new media/marketing landscape. We encouraged all firms to prepare and practice marketing plans even if they lack the resources to actually fund their plans.
This month’s topic is somewhat akin to last month’s observations. Just as the media being used to communicate with today’s consumer are evolving from digital to online, so are the profile, expectations and demands of today’s consumer rapidly transitioning. Nowhere can this transition be seen more dramatically than in the emerging results of the 2010 census.
This article is intended to assist the reader to better understand the nature of this shifting consumer profile. But first it seems appropriate to discuss why this information will be critical to the success of the average real estate broker. As has been discussed in great detail in previous presentations, those brokerages that are transitioning into the new “track B” configuration will be adopting firm-wide knowledge and learning programs. Obviously an important element of such a program will be a sound understanding of virtually everything relating to today’s very fluid consumer. On the other hand, those firms that are opting to continue a more traditional operational model will want to take note of the fact that the long time 80/20 (20% of agents account for 80% of production) rule has been slowly migrating to a 90/10 model.
A number of observations come out of this state of affairs. The first is that this elite 10% of agents is generally older (50+). Accordingly, and with all due respect, it can be suggested that it is likely that this group is operating on experiential data rather than new knowledge. More simply put, this group is likely to be working their traditional customer base, thus leaving the brokerage without representation within the new market sectors being created as a result of the new consumer profile shift.
Given the dramatic shifts currently taking place in the consumer demographic, no brokerage can afford to opt out of any new consumer sector without serious thought and reflection. At the same time, what firm can afford to ignore this amazing level of opportunity simply because their veteran agent pool is focusing their attention on a smaller and smaller traditional farming area?
Let’s take a look at some of these new consumer sectors. Consider the fact that one-third of all homebuyers are single. Nearly six million children in the United States are being raised by committed same sex couples. Single, childless women in many major cities now out-earn their male counterparts. Nearly half of the baby boomers (age 50 – 60 are actively using social media. Only one in five new households in the U.S. in 2009 was non-Hispanic whites. There has been a 14% increase in the number of non-married households. Women within the 25 – 39 age range now make up 46% of those earning bachelor’s degrees in science and engineering. During the next six years, the 82 million members of the millennial generation will hit their economic stride. Huge changes in the “mother profile.” Teen births are down to just 10% lower than births for women aged 35 and older. Four out of ten children are born to single mothers.
Another area in which consumer demographics and expectations are changing is within the multicultural sector, especially with respect to assimilation. Research by such organizations as GlobalHue Africanic has determined that cultural assimilation in most of the major ethnic groups has slowed over the last several years. The one almost frantic preoccupation of traditional immigrants to America was to “fit in” and become part of the mainstream.
During the past decade, that tendency has cooled significantly. In its place, immigrants are opting to create lifestyles within their native cultures as practiced in local communities with accommodations to the mainstream only where it is either necessary or preferable. If this is not confusing enough, consider the fact that in 2009, 16% of marriages were between non-Caucasian individuals of different ethnic backgrounds. This trend has created a growing number of bicultural households where two cultures are respected and practiced.
But no consumer trend is as interesting and challenging as those involving gender-based demographics. As a starting point, readers are encouraged to read “The Rise of the Real Mom” and “The Reality of Working Women,” two really important white papers produced by the Meredith organization. The first publication traces the rise and fall of the “super-mom” movement and provides an excellent statement relative to the status, current attitude and direction of those women who thought they could be all things to all of the people in their lives. The second Meredith publication takes a look back to the women’s liberation movement over the final decades of the 20th century. It observes that at the beginning of this period, woman had little resources, little money, little education and little or no influence. The best that could be said was that they knew something was wrong but not exactly what is was. Coming out of this period, however, women had education, power, influence, money and knew exactly what was wrong. The thesis of the white paper is that women will now move to fix that which they believe is wrong and in doing so may become the single most powerful dynamic in the American culture. Consider the recent success of the “Tea Party” as evidence of this thrust.
Using these two documents as a starting point, the reader will quickly come to the conclusion that “as it relates to household buying power and influence, men are on their way out and women are on their way in.” The rest is just details. However within these details lie many of the real estate marketing secrets moving forward. For those seeking a bit more graphic detail, the article entitled “The End of Men” which ran in this summer’s Atlantic Magazine might prove illuminating. It is sufficient to say that this movement has set off a virtual avalanche of new marketing initiatives perhaps lead by Proctor and Gamble’s new manofthehouse.com website that was designed to help men accommodate their new household duties.
The importance of all of these trends and directions are critical to the real estate brokerage seeking success in the new era. Brokers must set up formal knowledge and learning programs to bring this information into their businesses while at the same time understanding which will impact their local communities and determining how they will expand their consumer experience to embrace this new consumer profile. Agent panels must be briefed and trained to market within these new sectors.
In the same vein, newly formed firms that are looking for ways to plant the seeds of their future success may find these new market sectors provide the perfect opportunity to gain market share in locations seemingly over-occupied by traditional firms.
In either event, these are times of amazing opportunities for those who are willing to do their homework. Get started today. We can do this.