business news in context, analysis with attitude

by Kevin Coupe

Seeing that MNB is largely focused on a business segment that depends on being able to sell more stuff to more people, the New York Times story this weekend about how there increasingly are fewer people caught my attention.

Here's how the Times framed the story:

"All over the world, countries are confronting population stagnation and a fertility bust, a dizzying reversal unmatched in recorded history that will make first-birthday parties a rarer sight than funerals, and empty homes a common eyesore.

Maternity wards are already shutting down in Italy. Ghost cities are appearing in northeastern China. Universities in South Korea can’t find enough students, and in Germany, hundreds of thousands of properties have been razed, with the land turned into parks.

"Like an avalanche, the demographic forces — pushing toward more deaths than births — seem to be expanding and accelerating. Though some countries continue to see their populations grow, especially in Africa, fertility rates are falling nearly everywhere else. Demographers now predict that by the latter half of the century or possibly earlier, the global population will enter a sustained decline for the first time.

"A planet with fewer people could ease pressure on resources, slow the destructive impact of climate change and reduce household burdens for women. But the census announcements this month from China and the United States, which showed the slowest rates of population growth in decades for both countries, also point to hard-to-fathom adjustments.

"The strain of longer lives and low fertility, leading to fewer workers and more retirees, threatens to upend how societies are organized — around the notion that a surplus of young people will drive economies and help pay for the old. It may also require a reconceptualization of family and nation. Imagine entire regions where everyone is 70 or older. Imagine governments laying out huge bonuses for immigrants and mothers with lots of children. Imagine a gig economy filled with grandparents and Super Bowl ads promoting procreation."

According to the Times, "The 20th century presented a very different challenge. The global population saw its greatest increase in known history, from 1.6 billion in 1900 to 6 billion in 2000, as life spans lengthened and infant mortality declined. In some countries — representing about a third of the world’s people — those growth dynamics are still in play. By the end of the century, Nigeria could surpass China in population; across sub-Saharan Africa, families are still having four or five children.

"But nearly everywhere else, the era of high fertility is ending. As women have gained more access to education and contraception, and as the anxieties associated with having children continue to intensify, more parents are delaying pregnancy and fewer babies are being born. Even in countries long associated with rapid growth, such as India and Mexico, birthrates are falling toward, or are already below, the replacement rate of 2.1 children per family.

"The change may take decades, but once it starts, decline (just like growth) spirals exponentially. With fewer births, fewer girls grow up to have children, and if they have smaller families than their parents did — which is happening in dozens of countries — the drop starts to look like a rock thrown off a cliff."

You can read the entire story here.

It seems to me that while this is a trend that will play out across decades, not days or weeks, it is one of those things that ought to focus retailers' minds.

If there are going to be fewer people out there - and more people who are in their seventies - a lot of retailers going forward have to think differently about building market share, share of stomach, and establishing enduring relationships with their customers.  And, by the way, with their employees … because fewer people also means a smaller labor pool (and, apparently, an older one).

Their success will be depend on the degree to which they care for their customers and employees, as opposed to just selling stuff to one group and paying the lowest wages possible to the other.  ("Lowest possible wages" doesn't mean 'low' … it just means that companies may have rethink cultures that reward executives for driving down their labor factors.

Their businesses, it seems to me, will have to be less transactional and more connectional.

It was Mark Twain who wrote (paraphrasing Samuel Johnson), "Nothing so focuses the mind as the prospect of being hanged."  That's the Eye-Opening prospect that may be facing retailers in the years ahead.