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Industry analysis

Comprehensive use of demographics is very useful in creating industry analysis. Most researchers only use age or age-income metrics in industry analyzing. Our consulting reports also incorporates marital status and household status in providing a more complete picture regarding the factors that underlie demand for products and services.  Some selected examples from prior consulting reports:

INDUSTRY ANALYSIS

Toys – The least significant driver for toys are the number of children.  A consulting report that principally focuses on the number of children acknowledges that children do not buy toys.  They are purchased by adults.  Thus, the most significant issue is how many adults are children related to, i.e. how many gift givers are there?  In the 1970s and 1980s, a rising divorce rate and high remarriage rates resulted in a virtual explosion in the number of gift givers.  The apex of that occurred in 1990 in Atlanta when a child was born with 16 sets of grandparents!  Needless to say, nearly every gift giving occasion, e.g. birthdays or Christmas, involved a small truck.  Further feeding this mania was that many mothers joined the formal labor force.  Since then, the divorce rate is falling and younger mothers are exiting the labor force – folding work around the family.  The potential set of gift givers has essentially stopped exploding.

It is interesting that Toys R Us blamed low birth rates as a reason for their filing for bankruptcy.  While it is true that low birth rates worked against them, it was also the changes in the social mosaic that made it more difficult.  Our consulting report recognized that they benefitted handsomely from the marriage-divorce-remarriage merry-go-round of the baby boom.  But that was not the case for the millennials.

Housing – The basic driver of housing demand are household formations which is mainly driven by younger adults leaving their parent’s home where they share goods and services.  Whether one buys or rents, there are many things that need to be purchased, e.g. a bed, table and chairs, television, stereo, dishes, table ware, etc.  The basic underlying factor in owning versus renting is marital status, which is an issue not generally covered in consulting reports on housing.  Married couples own homes.  Persons who are not married are more likely to rent.  Our consulting reports include the discovery that persons who cohabit now behave like married couples in contrast to the 1970s and 1980s when they behaved like two single persons, i.e. they did not have families nor did they own homes.

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