1

The Changing Consumer Landscape What We Look Like Now

Jack Griffin, President, Meredith National Media Group

May 7, 2010

2

DEMOGRAPHICS: Population by Generation

Millennials and Baby Boomers are the Dominant Population Segments

• 310 Million = 10% growth in population from 10 years ago

• Millennials and Boomers are about equal, with Gen X sandwiched in the middle

Population Size by Generation (Census 2008)

Millennials: Age 14-32 81.6MM

Gen X: Age 33-45 57.3MM

Baby Boomers: Age 46-64 81.0MM

Source: U.S. Census Bureau

3

DEMOGRAPHICS: Why Millennials Matter Now

Their Sheer Size will Greatly Impact Culture, Social Behavior and Economics

1.  Millennials represent the biggest shift in U.S. workforce since baby boomers

2.  Millennials were the first generation with soccer moms, doting dads, PC’s and trophies

3.  Millennials now account for 79% of first births and 68% of second births

Source: U.S. Census Bureau; U.S. National Center fro Health Statistics; BNET/CBSNews

4

Diversity and an Aging Population will Change the Consumer Landscape

America is Becoming More Racially & Ethnically Diverse

• Minorities, now one-third of the U.S. population, will be the majority in 2042:

Source: U.S. Census Bureau

5

Diversity and an Aging Population will Change the Consumer Landscape

America is Becoming More Racially & Ethnically Diverse

• Minorities, now one-third of the U.S. population, will be the majority in 2042:

− Blacks, Asians, Hispanics, Native Americans and Pacific Islanders will outnumber Whites by 2042

Source: U.S. Census Bureau

6

Diversity and an Aging Population will Change the Consumer Landscape

America is Becoming More Racially & Ethnically Diverse

• Minorities, now one-third of the U.S. population, will be the majority in 2042:

− Blacks, Asians, Hispanics, Native Americans and Pacific Islanders will outnumber Whites by 2042

− There will be 49 million Hispanics in 2010, up 40% from 2000

− Hispanic population will exceed 110 million by 2050

Source: U.S. Census Bureau

7

Diversity and an Aging Population will Change the Consumer Landscape

America is Becoming More Racially & Ethnically Diverse

• Minorities, now one-third of the U.S. population, will be the majority in 2042:

− Blacks, Asians, Hispanics, Native Americans and Pacific Islanders will outnumber Whites by 2042

− There will be 49 million Hispanics in 2010, up 40% from 2000

− Hispanic population will exceed 110 million by 2050

• The 65+ age group will double in size to 88.5 million by 2050

− The 85+ group will more than triple to 19 million

Source: U.S. Census Bureau

8

Socio-economic Factors Re-define American Values and Lifestyles

1.  Delayed Motherhood and Single Moms Growing

Source: New Strategist; Pew Research Center; Population Reference Bureau; Bureau of Labor Statistics; Booz&Co. “New Marketing Imperatives”

9

Socio-economic Factors Re-define American Values and Lifestyles

1.  Delayed Motherhood and Single Moms Growing

2.  High Unemployment

Source: New Strategist; Pew Research Center; Population Reference Bureau; Bureau of Labor Statistics; Booz&Co. “New Marketing Imperatives”

10

Socio-economic Factors Re-define American Values and Lifestyles

1.  Delayed Motherhood and Single Moms Growing

2.  High Unemployment

3.  Household Net Worth Declining

Source: New Strategist; Pew Research Center; Population Reference Bureau; Bureau of Labor Statistics; Booz&Co. “New Marketing Imperatives”

11

Socio-economic Factors Re-define American Values and Lifestyles

1.  Delayed Motherhood and Single Moms Growing

2.  High Unemployment

3.  Household Net Worth Declining

4.  Per Capita Consumption Expenditure Declining

Source: New Strategist; Pew Research Center; Population Reference Bureau; Bureau of Labor Statistics; Booz&Co. “New Marketing Imperatives”

12

Socio-economic Factors Re-define American Values and Lifestyles

1.  Delayed Motherhood and Single Moms Growing

2.  High Unemployment

3.  Household Net Worth Declining

4.  Per Capita Consumption Expenditure Declining

5.  Retirement Stalled

Source: New Strategist; Pew Research Center; Population Reference Bureau; Bureau of Labor Statistics; Booz&Co. “New Marketing Imperatives”

13

Socio-economic Factors Re-define American Values and Lifestyles

1.  Delayed Motherhood and Single Moms Growing

2.  High Unemployment

3.  Household Net Worth Declining

4.  Per Capita Consumption Expenditure Declining

5.  Retirement Stalled

6.  Return of the Multi-Generational Household

Source: New Strategist; Pew Research Center; Population Reference Bureau; Bureau of Labor Statistics; Booz&Co. “New Marketing Imperatives”

14

The New Normal: Conservative Consumer Behavior

1.  Frugal Behavior is Now the Norm

2.  Switching to Lower-priced Brands is Common

3.  Share Shift to Private-label Products has Accelerated

4.  Consumers’ Outlook is Modestly Conservative

Source: Booz&Co. “New Marketing Imperatives”

15

“Perkonomics:” The New Spending Driver

Consumers are more frugal post-recession, placing a greater focus on value that is likely to stick for the next few years.

• Consumers expect to see coupons, discounts, promotions, etc.

• Price sensitivity is impacting all categories

• Value is the dominant purchase driver

• Discretionary purchases postponed

Source: Booz&Co. “New Marketing Imperatives”; Trendwatching.com

16

Implications for Marketers and Survivor Tips

1.  Integrate “Perkonomics” into Tactical Advertising Plan

2.  Use Messaging that Targets Diversity and Generational Differences

3.  Balance Brand Value with Promotional Practices

4.  Develop Marketing Strategies Based on Consumer Insights

Source: Booz&Co. “New Marketing Imperatives”; Trendwatching.com