In 2015, I wrote an article about Gen Z and their unique characteristics. Since then, there has been a lot more focus and research done on this post-millennial generation, specially since the oldest cohort started entering the workforce, reaching voting age, and gaining buying power.

First, my latest snapshot. Gen Z, those born after 1996, have been exposed to so much technology from birth, they’ve learned to sort through and absorb unlimited, extensive amount of information and data, in a limited amount of time. So, they are growing up faster and faster. They navigate through several screens at the same time, and multitask homework, social media, music, videos and live conversations. I’m sure those of you with or around kids and teenagers are nodding your heads. Given some of the adverse affects of helicopter parenting with millennials, they’ve been given more space and freedom, empowering individuality and independence. Thank you young boomers and Gen Xers for not over-compensating with your kids for how tough you had it. Growing up amid major innovation and social change, and better economic conditions, they’re not as fearful about the future. Unlike millennials who stayed home too long and delayed adulthood milestones by 5-8 years, including marriage, buying a car, house, etc, this generation can’t wait to launch and leave home. They plan on their entrepreneurial future early on and seek reward through purposeful challenges, not constant pad in the back. They share many social, cultural and political viewpoints with millennials, but they’re taking the culture and societal transformation to a whole new level.

Let’s take a look at the demographic portrait of Gen Z based on the latest Pew research. I know numbers are not exciting to many, but some of these facts are exciting and valuable information.

They are the most racially and ethnically diverse generation in America, nearly half are non-whites (48%). 1 in 4 are Hispanics (25%), much higher than millennials around the same age in 2002 (18%).  Majority of Gen Z Hispanic population were born here–only 12% were immigrants born outside of the US compared to 24% for millennials. Although the overall share of foreign born youth hasn’t changed much from millennials to Gen Z (8% and 7%), nearly 1 out of 4 Gen Z’s (22%) has a parent who is an immigrant, compared to only 15% for millennials. Even with lower immigration flow, the racial and ethnic diversity of Gen Z is expected to increase in the future as new immigrants add to their numbers. Today’s Gen Z is projected to become majority non-white by 2026–only 7 years from now.

Stop and let this sink in. 1 out of 4 has a parent who is an immigrant and in 7 years they will be majority non-white. This is most telling about our nation’s future socially, politically and culturally.

This generation has the most college enrollment (59%) and most likely to live with a college educated parent. This results in the lowest high school dropout rates compared to millennials in 2002 (6% vs. 12%), and least employed (58% vs. 72%).  Roughly 1 out of 3 live with a single parent (31%), higher than millennials (27%).  Although high school completion for this generation showed modest gain (80% versus 78% for millennials), Hispanic youth had the biggest gain, from 60% to 78%, followed by Blacks increasing from 71 to 77%–closing the gap with whites at 81% (Asians remain highest at 90%). The same is true for college enrollment. Modest gains for whites (61%) and Asians (80%), but big gains for Hispanic youth (55% vs.34%) and Black youth (54% vs. 47%).

Gen Z women continue to outpace men in college enrollment and have shown big gains compared to millennials. Their enrollment in college increased to 60% compared to 57% for millennials, which means 2 out of 3 Gen Z women enroll in college. Men showed similar gains (49% to 55%), but it is still roughly 1 out of 2 men enrolling in college. It’s still too early to determine college completion for Gen Z, but we know that for every 2 millennial men graduating from college, almost 3 women did.  This Pew report provides exact numbers for millennials in the workforce with a bachelors degree or more, reporting 46% for women in 2016, and 36% for men.  I expected this rate to continue, so I decided to research it. According to the Department of Education, in 2017, for every 100 men, 134 women received a bachelor’s degree and 140 obtained masters (the gap narrowed for PHD at 109).  And they predict relatively similar numbers for class of 2026, with 140 women receiving bachelor’s degree for every 100 men, and 140 masters degree.

I read an interesting Atlantic article that described some of the reasons why men enroll and graduate from college at an alarmingly lower rates–ranging from not seeing the benefit financially to invest time and money, to disparities starting at young ages, specially in low-income families. I think there are some cultural and social factors too. Perhaps girls at a young age feel happier and more satisfied when pleasing their parents with good grades, and enjoy the social aspects more. And boys who may be feeling the pressure of being and acting masculine, don’t find school as attractive or pleasing, and find more satisfaction with physical activities specially if they see their male role models working blue-collar physical jobs. Whatever the reasons, by the time they are seniors in high school, it’s too late to change their minds. It needs to start sooner. (For more on this, you can also my 2012 article, evolving archetypes & rise of women, should men fall behind?)

While Gen Z shares many social, cultural and political viewpoints with millennials, this Pew study revealed higher shifts in cultural liberation. Two-thirds of both generations disapprove of Trump presidency. Both generations are likely to believe blacks are treated less fairly than whites, support NFL players kneeling as a protest, and believe racial and ethnic diversity is a good thing for society. And about half of both generations believe same-sex and interracial marriages are also good for society. But here’s where Gen Z starts pushing the cultural transformation to a whole new level.  A third of Gen Zs know someone who uses a gender-neutral pronoun compared with a quarter of millennials. 6 out of 10 believe profiles and forms should include more options than man and woman, compared to 4 out of 10 millennials. And Republican Gen Z’s are more likely than millennials to believe blacks are treated unfairly, see the link between human activity and climate change and support government doing more to solve problems. Think of the social and political impact all this will have on political and corporate policies in the future. Our future workforce, voters and leaders are inspired by social justice and environmental causes.

It’s not all fluffy and there are some down sides too. A majority of U.S. teens (59%) have experienced some form of cyberbullying. A majority of U.S. teens (57%) fear a shooting could happen at their school, and most parents of teens share their concern. There are myriad of studies that report an alarming increase in depression and suicide rates among teens caused by social media overuse. Sure, there were concerns about kids watching too much TV in the old days too, but they couldn’t take the TV everywhere with them. This smartphone addiction is causing antisocialism, relationship and job problems, as well as anxiety and depression. But who said we can have it all good.

I am optimistic about our younger generations and the cultural evolution they bring. I encourage business leaders, primarily occupied by baby boomers, to get trained on generational differences, and for policy makers to pay attention to the young voices. We can and should always build on commonalities, but first we need to acknowledge and embrace our differences.

Immigration impacts demographics, population growth in consumers and work force, demand and supply in the economy….all in a positive direction.  I’ve often wondered why economic impact of immigration is never discussed in political campaigns or rebuttals.  Regardless of your partisan viewpoint, it’s good to fact check yourself and your beliefs.  Brookings updated their document on facts about immigration and some of the findings may surprise you.  Contrary to the common theme in political campaigns that immigrants take jobs away from American natives, lowering wages and making it hard for them to compete, evidence shows that immigrants have a tiny impact on the wages and they tend to work in different jobs not pursued by natives.  Meanwhile, they have positive impact on the economy,  If it weren’t for immigrants and multicultural population growth, US will be facing the same demographic challenge with aging and declining population.  This is driven by lower fertility rate for native-born Americans and higher fertility rate for immigrants and multicultural population.  (I’ve written extensively about this, click here to read one of my articles on this topic).  Population growth is essential for fiscal and economic stability. Just think how difficult it will become for Social Security and Medicare to fund as the working-age population declines relative to the elderly population.

Here’s my summary of 9 facts about immigration you should know.  I’ll start with economic impact.  (click here to read the entire Brookings report and their sources, and here for Pew Research reporting similar findings.)

Fact 1: Output in the economy is higher and grows faster with more immigrants, they contribute positively to government finances, businesses & GDP.

By increasing the number of workers in the labor force, immigrants enhance the productive capacity of the U.S. economy.  In turn, that increases consumptions which help US businesses.  They increase government finances because they pay taxes.  And in case you’re wondering, per capita expenditure on cash welfare, food stamps, Supplemental Security Income (SSI), Medicaid, Medicare, and Social Security are all lower for immigrants than for native-born Americans.

One estimate suggests that the total annual contribution of foreign-born workers is roughly $2 trillion, or about 10% of annual GDP.  The contribution of unauthorized immigrants is estimated to be about 2.6% of GDP.  Adding to this, providing documented status to unauthorized immigrants, allowing better job matching, would increase GDP by an additional 0.33%.  In contrast, deporting all unauthorized immigrants would lower annual GDP by 0.27%.

Fact 2: Most estimates show a small impact of immigration on low-skilled native-born wages.

Most estimates in Brookings report show an impact on low-skilled native-born wages of 0-1%. Another one of their recent estimate showed a slightly positive impact on wages (0.6-1.7%).  Interestingly, the impact on wages of native workers with more education are generally estimated to be positive, which makes the overall impact positive.

Fact 3: High-skilled immigration increases innovation.

Immigrants are more likely to attain college and advanced degrees, and more likely to work in STEM fields. This leads to disproportionate immigrant contributions to innovation.  Although immigrants constitute only 18% of 25-or-older workforce, they obtain 28% of high-quality patents.  And more likely to become Nobel laureates in physics, chemistry, and physiology or medicine.  Click here to read an interesting article debunking myths that high skilled immigrants steal American jobs.

Fact 4: Immigration in the United States does not increase crime rates.

In 2010, I wrote a blog “More immigrants = less crime” and over 8 years later, this report continues to validate this.  Studies show that immigrants are considerably less likely than natives to commit crimes or to be incarcerated. Reasons vary by immigrants being subjected to various kinds of formal and informal screening to education and income (more on this below).  Evidence suggests that legalizing the status of unauthorized immigrants causes a reduction in crime by improving employment opportunities. Conversely, restricting access to legal employment for unauthorized immigrants leads to an increased crime rate for offenses that help to generate income . Overall, this reports shows unauthorized immigration to have no effect on rates of violent crime.

Now, some general facts….

Fact 5: The foreign-born share of the U.S. population has returned to its late-19th-century level, rise driven by both immigration and low fertility rates of native-born Americans.

Foreign-born share of population in the US rose to 14% during second half of the 19th century.  However, this share reached a historic low of 4.7% in 1970 due to policy changes such as national origin quotas as well as Great Depression and two world wars.  In the second half of the 20th century, a series of immigration reforms repealed national origin quotas and in 1986 amnesty was provided to undocumented immigrants, rising the share to 13.7% from 1970 to 2017.

While foreign-born share of population increased, the “net” immigration rate declined by half.  However, it is due to the increase in the number of prime-age children of immigrants that the US has been supported with more than 3% population growth.  By contrast, population growth for native born children has fallen from 0.2% in 1995-2005 to a negative (0.5%) during 2006-17–caused by fertility rate dropping from 3.65 to 1.80.  And we need a fertility rate of 2.1 to sustain population.  Aging population in developed countries has been a big demographic challenge and crisis that I’ve written about many times.  This directly impacts the immigration policies globally, regardless of the political rhetoric.

Fact 6: About three-quarters of the foreign-born population are naturalized citizens or authorized residents.

The remaining 25% is down from 28% in 2009.  And did you know 75% of all unauthorized immigrants have lived in the US for more than 10 years–a sharp increase from 45% in 2007? This puts a different spin in what you’re hearing in the news and political campaigns.  A major factor contributing to the unauthorized number is a rising share of immigrants, who arrived legally, overstaying their visas. (Pew reports the same numbers as Brookings.)

Fact 7:  in 2016, unauthorized immigrant total dipped to lowest level in a decade.

According to recent Pew research, there were 10.7 million unauthorized immigrants living in the U.S. in 2016, down from a peak of 12.2 million in 2007.  That’s a 12% decline, the lowest since 2004–and pre-Trump presidency–driven by a decline of 1.5 million unauthorized Mexican immigrants.  Deportation rose during both Bush and Obama administrations and peaked to a record 433,000 in 2013. Mexicans still account for roughly half of this total, but noteworthy, the number of unauthorized immigrants from Central America, mainly El Salvador, Guatemala and Honduras, increased by 375,000 over the same period to 1.85 million.  Overall, the unauthorized immigrant population shrank by 13% by 2016.

Fact 8: 80% of immigrants today come from Asia or Latin America, while in 1910 more than 80% of immigrants came from Europe.

To put it bluntly, this is why the hot topic of immigration is emotional.  Majority of immigrants are not white, and they’re changing the demographics and culture.  As marriage of European immigrants led to today’s white population in the US, it would seem natural to project similar boom of multiracial and multicultural population.  This is why majority of White Americans with lower education support Trump, his wall, and immigration policies.  It is an emotional reaction to the changing demographics in the US, regardless of the upside economically.

Fun fact from my previous blog: Although Asians represent only 6% of population today, they are now on target to surpass Hispanics as the largest foreign-born group in American by 2055.

Fact 9: Immigrants are 4 times more likely than native-borns to have less than a high school degree, but twice as likely to have a masters or doctorate.  Regardless, their children attain similar education and occupations.

This reflects the diversity of background with immigrants. To put this in context, 58% of people with postsecondary degree are Asians, and 51% of of people with a high school degree or less are from Mexico.  Contrary to common stereotype, immigrants are more positively selected based on education and prospects for labor market success.  Some fun facts here:  from 1980-2010, immigrant workers accounted for 39% increase in overall science, technology, engineering, and mathematics (STEM) employment, rising to 29% of STEM workers in 2010. By contrast, high-skilled native-born workers opted for occupations that require more communications and interpersonal skills. Clearly, degree of English proficiency drives occupational choices.

And regardless of their parents, children of immigrants tend to attain educational and occupational outcomes similar to natives, but with higher rates of college and postgraduate attainment.

Immigration is a hot topic that has led to the longest government shut down in history.  Isn’t it time to get our facts straight?

The US population only grew 0.7% in the last two years, the lowest in 80 years, driven by lower fertility and immigration rates.  You tell me which CEO will be happy with less than 1% growth annually.  If you don’t know who is buying your products, why and where, and even more importantly, which demographic population is on the rise in the midst of flat overall population growth, you’re ignoring demographics at your own peril, missing the mark with your growth strategies, and will never meet your financial goals.

I read this interesting Forbes article about demographic trends shaping retail’s future.  I’ve written about many of these trends before, and found a couple I don’t quite agree with and had to correct the numbers (and their assumptions) based on my own recent research this year.  And a few that were not mentioned.  So here’s my list:

1.  The geographical population is shifting, America’s Heartland has moved to the South and West

In 1900, the Midwest and Northeast were home to 62.3% of the U.S. population. Now the South and West are home to 61.7%. They have become the true American heartland.  More people means more people buying.  This has major implications for retailers, particularly with increased pressure and competition from online shopping.  Suburbs growing more rapidly than rural or urban areas.  In fact, share of rural population has declined since 2000. If  you’re in the retail business, understanding these demographic shifts will be critical in your growth strategies of where, as well as who.

2.  Demographic inversion – cities and suburbs trading places

I read a great book a few years ago called, The Great Inversion and the future of American cities by Alan Ehrenhalt, and I’m witnessing this personally in almost all US major cities.  We’ve witnessed this inversion in major European cities which started decades ago.  Rich professionals moving in to the inner city, people with means and economic choice coming to live in the center, and low income minorities and immigrants living beyond the city limits in the fringe suburbs.  More affluent population moving back to the cities made suburbs the arrival ground for immigrants to build a life towards middle class.  This is clear these days by school zoning and property taxes.  This is often referred to as gentrification, a loaded word.  Why is this happening?  De-industrailization of the central city.  Decline in random street violence.  Values and demographics of millennials and overall youth culture, with different ideas about the city and suburbs.  Research done in colleges asking students where they like to live rarely indicate the desire to move to suburbs.  Pop culture and love for urban lifestyle…the popular series, sex and the city was not called sex and the suburbs.  (For more on this, watch this video of Alan Ehrenhalt explaining this concept.)

The sooner we adjust our perception of inner city, suburb and rural, the sooner we can connect this demographic inversion to growth strategies in the retail industry.  We’ve seen retail giants like Target and Walmart relocating to suburbs with re-image and unit expansion strategies capitalizing on this trend.  But many retailers are staying behind and still don’t know why their sales are declining.

3.  Shrinking middle class and increasing low and high income households

Pew Research found that the number of adult Americans in the middle class, defined as people living in households that have incomes from two-thirds to double the national median, has fallen from 61% in 1971 to 50% in 2015, an all time low. And their share of the nation’s aggregate income has declined precipitously, from 62% in 1970 to 43% in 2014.   I’ve noted that the US ranks #3 among all the advanced economies in income inequality, along with other concerning stats.  And the financial gaps between middle- and upper-income Americans have widened, with upper-income households holding 49% of U.S. aggregate household income (up from 29% in 1970) and seven times as much wealth as middle-income households (up from three times as much in 1983).

Retailers have traditionally relied heavily on the middle class population.  But we’re seeing more and more polarization in luxury/affluent and value brands.  You can see this impact by sharp decline in the casual dining restaurants and dividing that market between QSR, fast casual and fine dining.  You can see this in the success of dollar stores, warehouse and off-price stores.

Staying in the middle is very risky and a strategy trap.  That’s not to say that you should forget about the middle class.  I’m simply saying that the share is shrinking and they should not be the only target for your retail value proposition.

4.  Less people working

This goes hand in hand with shrinking middle class.  Shifts in labor force participation greatly impacts the economy and retailers.

According to September 2016 BLS report, after rising for more than three decades, the overall labor force participation rate peaked at 67.3% in early 2000 and subsequently trended down.  Over the next few years, the rate receded to about 66% and stayed at that level through 2008. The participation rate then dropped again by recession, and by mid-2016, it stood at 62.7%.

According to Pew, there are 10,000 baby boomers retiring every day.  In recent years, the aging and  retirement of baby boomers contributed to this decline.  From 2000 to 2015, most of the major demographic groups saw a decrease in labor force participation. Teenagers experienced the largest drop in participation, which coincided with a rise in their school enrollment rate. Young adults 20 to 24 years also showed a decline in labor force but not as steep, most likely driven by delayed adulthood for millennials.

The labor force participation rate of women 25 to 54 years also fell, from 75.5% in 2003-2009 to 73.7% in 2015, with the decrease more pronounced for women who did not attend college.  Although the rate of men 25 to 54 years continued its long-term decline, the decline in women labor force impacts the retail industries the most since 80-85% of consumer buying decisions are made by women. This further supports the rise of value/price retailers.  It doesn’t make financial sense to simply drop the price with their existing supply chain, but value propositions need to shifted or added to address these trends.

5.  Changing lifestyles — more singles, couples and unconventional families

In the 1950s, half of HHs were raising children.  Arthur Nelson predicted that by 2020 that number will drop to 25%.  Millennials have not only delayed marriages, but over 1/3 live with parents or other family members.  According to several research studies, 1 out of 4 millennials say they may never get married.  Two-parent households are on the decline in the U.S., while divorce, remarriage and cohabitation are on the rise. About 1 in 6 American kids now live in a blended family and 1 in 10 live with a grandparent. Multi-generational family living is on the rise.  Pew reported that 1 in 5 HHs include more than one generation.  Women are having babies way into mid-late 30s these days.  And the roles of mothers and fathers are converging, due in part to the rise of breadwinner moms at an all time high of 40%.

All this means new and unpredictable shopping patterns for retailers.  I wrote an article about dads becoming new moms, and must say I’m starting to see men with kids a lot more in advertising.  But that’s not enough.  Think of all types of different demographics buying baby products.  Think of young adults in widely varying ranges of living arrangements.  Think of aging baby boomers as those who are about to start the third phase of their lives, free, healthier and younger at heart. There is a reason we’re seeing a rise in single packaged food business.  Lifestyle marketing must include variety of different forms and unconventional family sizes, which in turn impact real estate, health care, retirement, automobile and so many other retail industries.

And here’s an interesting fact:   There are now more households with pets than there are with children.  According to the 2017-18 national pet owners survey by APPA, 68% of U.S. households, or about 85 million families, own a pet….compared to 41.4% of US households with children under 18, or about 52 million.  (Note: the higher number is caused by increasing singles with no kids having pets.)

Successful companies need to know how to create value propositions that negate traditional family stereotypes.

6.  Americans are more ethnically and racially diverse than ever before, and by 2055 there won’t be a single racial or ethnic majority

This, in my opinion, is the biggest demographic shift impacting American retailers.  According to Pew, the total U.S. population will increase by 36% to reach 441 million in 2050, with immigrants and their children making up a stunning 88% of the increase, or 130 million.  Think of it this way, each day, US population increases by 8,000, and 90% are non-white.  And although Asians represent only 6% of population today, they are now on target to surpass Hispanics as the largest foreign-born group in American by 2055.  I’ve covered this in a previous blog in more details.  As marriage of European immigrants led to today’s white population in the US, it would seem natural to project similar boom of multiracial and multicultural population.

I think once you get past the generation of immigrants and their first generation children, a lot of the cultural nuances go away and other demographic factors come in to play, such as household income, education level and occupation.  But that’s more reason to pay close attention to these demographic macro trends that impact your businesses.

So, it’s true that some traditional ways of analyzing demographics feed into stereotypes.  But I’d add that knowing how to analyze demographics and watching their trends regularly, will negate most stereotypes.

Also read why analyzing demographic trends should be at the core of your strategic planning.

The best definition I’ve found and use for value proposition is, “the combination of experiences (benefits, trade-offs, price) any business delivers to its target customers versus competing alternatives.”  And finding a unique, differentiating value proposition typically involves a new way of segmenting the market, and as Michael Porter often points out, a novel value proposition expands the market.  Before Starbucks came along, customers didn’t realize that they need one nearby to get coffee.  Before iPad came along, customers didn’t realize they wanted tablets.  Did customers know they can pay cheaper prices for all their furniture by assembling them at home before Ikea?  These are examples of companies that didn’t just meet customers’ needs, but they also transcended their unmet needs and expanded the market.

Here’s a quick and easy way to test your value proposition:  Complete this sentence from your customer’s perspective, and then answer the following questions:

“If I buy your products and services, instead of (competing alternatives), I get what?  The “what” is your value proposition perceived by your customers.”

• Have you chosen a superior, unique, differentiating value proposition that answers this question?
• Can you deliver this VP?
• Is it sustainable and profitable?
• Can everyone on the leadership team answer this question?  Do the answers match?
• Can your customers play back this answer?  Have you asked? Do their answer match your intended VP?

I am available for half day strategy and value proposition workshops for you and your team.  If you’re interested, you can visit my contact page or message me directly at farnaz@farnazglobal.com to schedule your complementary call to discuss.

Even in my own circle of friends, particularly when it’s just us women, without a doubt, at some point we get right into how men and women are different.  Why don’t we ever talk about how men are different from other men…or how women are different than other women….we know those differences are just as significant.  Perhaps we’re all trying to solve the inevitable questions about personal relationships, why it’s not working, trying to make some sense of it all.  Perhaps these biases and stereotypes are so culturally deep rooted, that it’s tattooed in our subconscious minds.  Nature or Nurture? I don’t question the nature part, I’m simply pointing out that the nurture part is ignored at our own peril and it’s causing social and economic injustice.

I recently read two fascinating research studies by Pew on how Americans describe what traits society values (or doesn’t) in each gender.  As you read my highlights, keep in mind that these are common traits and values that Americans are associating with gender–and if you’re anything like me, some will scare you.

I think this chart is most telling, and in my opinion, the best summary.  Some traits were used more for one gender than the other, shown by size of the dots.  Yellow dots for women, green for men.

• Take a look at powerful. Americans view powerful in a positive way to describe men (67% positive) but very negative for women (92% negative).  I think this reveals the deep rooted psychological cause for the gender gap in the corridors of power.  Disturbing, but true.  I’ve known for years, and research has proven, that women have to trade off likability for power and strength.  This particular research does not break down responses by gender (click here for methodology) but at 92% negative for women, it looks fairly obvious that the responses were similar with both men and women.
• And provider was used only for men?  40% of American women outearn their husbands and 60% have more personal wealth….and we still associate the provider trait with men only?
• Although honest was valued similarly for both men and women, it was used twice as often for men than women.
• Strength was listed as a valued trait for men, but less so for women.  And this research also shows (although not on this chart) that Americans saw leadership and ambition as traits that society values more in men than in women.
• I’m not surprised compassionate was viewed 100% positive for women, but I was very surprised to see that this trait was viewed as negative for men.  Perhaps American society views compassion as making men less ambitious and strong, as if they are polarized traits.
• This study also showed that there were certain words that were primarily used primarily for one gender (95% mentions).  For example, protective and emotional were used almost exclusively for men – protective in a positive way, emotional in a negative way.  Multitasking, beautiful, brain, outspoken, promiscuous  were used almost exclusively for women…and I’m sure we all know the first three in a positive way and last two in a negative way.  Alarmingly, brain, outspoken and promiscuity are given traits for men but judged for women, positive or negative.  (to read the complete report, click here.)

You’ve probably heard my continuous sound bites about gender bias and stereotyping being major contributing factors to gender pay gap and women underrepresentation in business, social and governmental leadership positions.  This study simply proves it.

Another Pew study revealed that while Americans say society places a higher premium on masculinity than femininity, there was no consensus on nature versus nurture.  Participants acknowledged the gender differences in how people express feelings, physical abilities, personal interests, parenting, etc, but there were no consensus on the origin of these differences.  However, women tend to attribute these differences to societal expectations and cultural norms (nurture) while men tend to point to point to biological differences (nature).

We are entering an era where marketing meets politics and social justice.  Right, wrong, or indifferent, companies like Nike, are taking a political position to stand with Colin Kaepernick for social justice.  MarketWatch reported that since Colin Kaepernick’s Nike campaign, the company’s online sales jumped 31%.  Strong returns, I call that effective cultural branding and expect this trend to continue.  We are seeing powerful women represented in films, TV series and media negating all these stereotypes.  So if your leadership and marketing teams are still stuck in these biases and stereotypes, ignoring the rapidly shifting culture with women, I would safely say that you will hit a wall fairly soon. But these biases don’t exist just in the board rooms. Perhaps we should each first try to work on our own unconscious biases before we can bend the culture, even a tiny bit.

You can also read my other blog about how to overcome unconscious gender bias.

Strategy is just as much about what not to do as it is about what to do.  It’s a combination of benefits and trade-offs that your brand offers, differentiating you from the competing alternatives in the marketplace.  Trade-offs are essential to strategy.  They create the need for choice and purposefully limit what the company offers in order to have a clear differentiation and competitive advantage.

Management tools such as technology, productivity, quality, speed, product delivery, benchmarking, best practices, series of one-off marketing tactics, etc, are essential part of improving performance and profitability, but they are temporary competitive advantage and can not take the place of strategy.  The more benchmarking companies do, the more they look alike, and while operational improvements and effectiveness will gain profitability, it is short-term, facing diminishing returns with no strategic vision for long-term profitable growth.  Sure, we can use fancy words and tools to diagnose, search and forecast. Transferring frameworks into actionable specifics and guidelines, reallocations of resources along with commitment to analytical rigor and constant re-evaluations are all important to strategy.  They will help you understand why you have or have not been making money.  But they can’t replace the most important part of strategy–positional.

I like and use Michael Porter’s simple definition of strategy:  which customers, which needs and at what relative price.  What this means is a company must either deliver a differentiating value to its chosen target customers, or create comparable value at a lower price.  Either way, you can outperform rivals only if you can establish a difference that you can sustain long-term.  Know your competitive advantage, and you will make money.  The magic of strategy happens when there is more focus on positional improvements, not just performance improvement.  Positioning the company against the right, growing macro trends–where and how to compete by right target market selection–I call that strategic targeting.

A good, solid, differentiating Strategy isn’t easy to understand, let alone implement and go to market.  Many great, large consulting firms have used powerful frameworks with analytical rigor with companies, but I believe they are missing an important evolution of strategy which is about the psychology, thinking and feeling of the essence of strategy.  The rapid shifts in demographics and cultural values, causes and beliefs among new world customers which have direct impact on a successful winning strategy.  This isn’t so much about what has shifted in the budgets—it’s more about what has shifted in consumers and therefore, market forces.  The commitment to strategy falls short when leaders do not face the brutal facts about their own biases and past orthodoxies that hold them back from tapping into a profitable new world market.  Truth is, leaders of companies have escaped the middle class in their daily lives, and often fail to understand that they can’t escape the rapid changes in the middle class with their strategy.

Here are 10 easy and quick questions to help you get started and test your strategy:

1. Does your strategy reflect the right strategic targeting aligned with rapid demographics and cultural shifts?
2. Once you answered who (which customers), is your strategy clear about “where” to compete? (Hint: where to compete can be more important than how)
3. Once you answered who and where, does your strategy know “when”? (Hint: a good strategy starts with a few crucial positions to gain competitive advantage now, with future options based on market trends/forces)
4. Does your strategy have clear competitive advantage(s)?
5. Does your strategy disrupt and beat the market forces?
6. Does your strategy anticipate current and future trends?
7. Does your strategy meet your target customers’ unmet needs through profound customer insights? (Hint: you must spend days in the life of your customers to be able to answer this)
8. Is your strategy contaminated by personal bias of a few leaders? (Hint: a good strategy is outside/in, not inside/out)
9. Is your strategy deliverable?
10. Does your strategy have the commitment and conviction of your senior management team?

In my next blog, I will provide you with a value proposition toolkit.  While strategy and value proposition are very similar, they have different purposes in any business–both very critical and key to long term success.  Stay tuned.

I am available for half day strategy workshops for you and your team, if interested.  And you can always email me at farnaz@farnazglobal.com to schedule your complementary call to discuss.

Did you know women own 60% of personal wealth in the US and control 85% of consumer buying decisions?  Did you know 40% of US women outearn their husbands and 70% of all new businesses are started by women?  Women control $20-trillion globally–expected to go up to $30% in the next 5 years–and ~$8-trillion in the US.  If you’re not targeting women in your strategic planning and positioning, you’re missing out on a lot of incremental revenues.  (Also read, the rise in spending power by women, the largest market opportunity)

If you want to effectively and strategically target women, you should ask your strategy and marketing leaders these 12 key questions.

1. Have we re-evaluated our core target to primarily include women ?
2. Have we defined which women, which needs and at what relative price?
3. Does our Value Proposition(s) identify and align with evolving needs and values of our targeted women?
4. How do we differentiate from competition in addressing those needs and values?
5. Does our Value Proposition(s) being clearly communicated in our marketing channels?  In other words, can she play back our VP if asked?
6. Do we know which one of our products/services is “her decision” alone, and which ones are joint with her partner?  Are we communicating accordingly?
7. How are we enhancing and simplifying “her experience” of our products/services to match or exceed her expectations?
8. Does she consider us “affordable” relative to competition (note:  affordable is not the same as cheap) — or superior?
9. What are the lifestyle and roles that we are assuming for our targeted women?
10. Are we avoiding gender biases and stereotypes in our communication strategies?
11. Have we identified the sweet spot of commonalities cross-culturally and cross-generationally?
12. Do we even know the New World Modern Woman archetype?

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Since then, I’ve continued my research on how world demographics continue to change profoundly and what that means for our near future.  Everything I wrote about is still significant and continues to be widely documented, so be sure to read my previous blog if you haven’t done so (click here) ….but here’s a summary of 4 more major global demographic shifts that caught my attention, which will have major impact on all aspects of human life.

Nearly all global population growth taking place outside of developed countries

The world population currently at 7.6B is projected be reach 8B by 2023, 9B by 2037, and 10B by 2055.  What most people don’t realize is virtually all of the growth (~96%) is taking place in developing countries.  Which ones?  India leads with 18%, followed by China (6.7%), Nigeria (6%), Pakistan (4.6%), Indonesia (3.4%) and Congo (3.2%).  US is the top leading country in developed countries with 2.8% growth driven by non-white population increase.  It is no wonder that McKinsey reported that by 2025, more than half the companies worldwide with $1B in revenues will be headquartered outside of developed countries.

In contrast, population of more than 50 countries are expected to decline between now and 2050, at the current fertility/mortality rate and immigration….lower fertility rate (below replacement rate of 2.1 kids per woman), and higher mortality/life expectancy.  This is causing the demographic aging crisis that I wrote abut in my previous blog.  Many countries with large economies — including Germany, Italy, Japan, Russia and South Korea — are projected to be substantially smaller by mid century.

Don’t let the current political rhetoric fool you….many developed countries (including US, UK & France) are dependent on future international migration for future population growth and sustaining labor force.  According to Pew, in US alone, immigrants are projected to play the primary role in the growth of working-age population, increasing from 33.9M in 2015 to 38.5M by 2035.  Absent these new arrivals, US working-age population would fall, negatively impacting GDP.

Some trends are easy to forecast, some harder.  I think demographic trends fall in the ‘easy’ category.  As the saying goes, you want to fish where fish are biting.  It is much easier to succeed where there are lots of growth.  And growth creates more growth.  It’s a simple demand/supply math.  More people, more customers, more clicks, more demand, more supply. And demographics impact all of these.

Demographic trends are easy to get and easy to predict/forecast.  Population size, average age, age groups, family size, median income, income groups, education, race, ethnicity, religion, lifestyle.  Understanding these demographic trends will help you be in the right place, at the right time, with the right product and service offerings.  They also help you choose your target strategically. Clearly, strategic targeting goes well beyond these traditional demographic data….they must also include needs, behavior, and values.  But they all start there.  For example, when you learn that Gen Z has different set of needs, behaviors and values, you must first understand who Gen Z is and what differentiates them from prior generation. Understanding that this generation tends to be resistant to traditional notions of gender and race should also be part of your demographic trend analysis.

Understanding demographic trends will enable strategic targeting which is essential for growth and sustainability.  Ask yourself, when was the last time you revisited your primary target in your planning?

Take NFL as an example, a major business organization in the US….

The NFL has a bigger problem than kneeling players.  It’s called demographics and trends.  As it turns out, NFL’s rating problems have nothing to do with the recent, controversial kneeling protest that has been politicized extensively these past few months.  Ratings have been dropping since 2015.  And not just for NFL, but for all sports.  As it turns out, the demographic analysis revealed that sports viewership has declined in general, and the age of viewers are increasing which means the same people are watching and getting older.  Young people are not watching as much, and if they are, they’re not watching the entire game as older people do.  Millennials and Gen Z have different habits and behavior, and they consume media differently.  The may binge watch an entire season of a Netflix show in one day or one weekend, but with sports, they’re more interested in outcome and game results than watching how it happened entirely.  I’m sure there are many ways NFL and other sports can stay relevant and engage the younger generation.  Question is, did they study the trends and trajectories or simply ignored them?

Politicians live and breathe demographics to win an election.  But businesses are not caught up with that rigorous discipline.  In my recent consulting project for a restaurant chain, after a thorough analysis of their 2 mile radius demographics, followed by sales correlation to each demo, I was able to show who their most profitable customers are, and where they perform better and why.  Interestingly, my recommended target was different than who they thought they were targeting with all the marketing efforts and dollars.  This happens more often than you think.

Here’s another catch.  Some demographic trends are simply hard to accept.  People know and hear about them, but they have difficulty accepting them, primarily due to their own past and present biases, prejudices and orthodoxies.  This is a major factor that prohibits business owners from tapping into growth opportunities.  Take race and ethnicity as an example….

I coined the phrase The New World Marketplace because I felt ‘diversity’ was stereotyped as African American inclusion, and ‘multicultural’ became exclusively about Hispanics in the US.  Unbeknown to most, US Hispanics are less than 50% of multicultural/non-white population in the US, but receive 95% of multicultural agency spending (US Census & Migration Policy Institute).  It’s not their time yet, some agencies say.  Time for what,…..acceptance?  Did you know Asians represent 1/3 of Hispanic market in population size (18.2M vs 56.6), but have 2/3 of buying power ($890M vs. $1.3T) with much higher HH income ($78k vs. $42.5)?

That’s just one example of blind spots that many companies have in choosing the right target for their products and services.  In politics, I continue to find studies that show despite changing demographics, the political playing field still tilts toward white men.  This recent study cites one of the biggest hurdles to be money.  “It’s not a talent gap, it’s a financial gap,” reported in the study, primarily due to systematic problems such as campaign finance, recruiting, etc.  They say they are neutral, but we know they are not.  But, for you and your business to grow and prosper in this competitive marketplace, you have to stay neutral and foresake past biases, prejudices and orthodoxies that prohibit you from future profitable growth.

This largest generation cohort, ~80M strong, is not just about digital dependance, education, multiculturalism, social/environmental consciousness, work/life balance, love of travel and living with their parents too long.  Although I must remind you, about 34% of millennials (18-34) still living with their parents.  But according to the latest Pew research they also dominate poverty, lower household counts even with high population numbers, single motherhood, and renting/not owning homes.

Did you know…

1  Even with much lower household numbers, Millennial HHs are in poverty far greater than previous generations

According to Pew,  in 2016, 5.3 million (out of the ~17 million) Millennial HHs are in poverty…. compared to 4.2 million headed by a Gen Xer and 5.0 million headed by a Baby Boomer. I read a Forbes article a while ago that nearly half of Millennials can’t even afford to cover a $500 emergency.  Yes, half.  Pew explains that Millennials are more racially and ethnically diverse than the other adult generations, and a greater share of Millennial households are headed by minorities, who tend to have higher poverty rates as primary reasons.  That is certainly a major factor, but we’ve been experiencing major income polarization in the US this past decade and looks like Millennials are being squeezed to the poverty side more than other generations.  And there are other economic factors….Millennials are first generation to earn less than parents (~20%) with highest level of unemployment, and at the same time, average student loan doubling…lowest earning, highest cost of education and living.

One of my major sound bites about millennials in my book has been about a significant portion of this generation (~1/3) being born into single unwed mothers.  While this makes this generation culturally liberal with gender/racial equality, family planning hasn’t been in the forefront of their lifestyle priorities.  And research shows a strong link between family structure/marital status and likelihood of living in poverty and overall financial circumstances. This leads into the second sobering fact:

2  Millennial HHs head by single mothers surpassed previous generations

Millennials represent 4 out of 8.6 million households headed by a single mother who lived with a child younger than 18….compared to 3.9 million Gen Xers, and only 0.6 million Baby Boomers. While there hasn’t been a significant increase since Gen X, it’s the trend that’s disturbing…a very sharp rise since 1980–from 19% to 34% in 2014 (26% single parent, 6% unmarried parents).

The numbers vary significantly across racial and ethnic groups, which again, are directly correlated to poverty (and most likely education) levels. 72% of White and 82% of Asian-American (82%) children are living with two married parents, while only 55% of Hispanics and 31% of black children are living with two married parents.  This clearly has a direct correlation to increasing poverty.

3  Millennial households dominate the ranks of the nation’s renters and significantly less likely to own their home

Last year, Millennials headed 18.4 million of the estimated 45.9 million households that rent their home….compared to 12.9 million Gen Xers and 10.4 million Boomers. This isn’t just a reflection of their youth.  Millennials, in general, are significantly less likely to own their home than prior generations around the same age.  In 1982, 41% of households younger than 35 owned their homes. That number stayed relatively flat in 1999 (40% for Gen Xers).  But by 2016, the share had dropped to 35% for Millennials.

I contribute some of this to the overall delaying of major adulthood milestones by about 5-8 years with Millennials, which also leads into the next fact.  But again, this has big social, cultural and business implications.  I’m sure the real estate industry is feeling this pinch, not to mention the technological impact on the industry.  Millennials would rather travel than buy a home.  They would rather rent than to give up small luxuries such as daily starbucks run and eating at favorite restaurants.  But perhaps none of these trade-offs make up for the rising cost of buying a home.

4  About half of Millennials are cohabiting-couple households who are unmarried

Millennials last year headed 4.2 million out of 8.3 million cohabiting-couple households who are unmarried. In 1987, only 10% of 25-29-yr olds were cohabiting.  In 2012, the number jumped up to 37%. I even read somewhere that a large portion of millennials are waiting until their 40s to get married.  Again, while this is part of delaying adulthood milestones for this generation, there is a big cultural component at play….. it is not shameful to live with parents; it’s smart financial planning; it’s chasing a dream ahead…..it’s kosher to cohabit without marriage; it’s smarter to wait until ready financially and emotionally…. it’s culturally appreciated and praised if travel globally and gain worldly knowledge instead….experiences matter more than things….etc.  It’s too early to tell if this trend will continue for Gen Z.

We can twist and turn numbers and facts in any which way we want.  But maybe we can agree that this generation has just as much hardship as they have parental/societal entitlements and confidence.

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