Redefining Families, Reexamining Households November 2013
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Product developers, service providers, and marketers traditionally have looked at life stages to understand markets. In particular, families have played an important role in revenue generation because they establish households that consist of parents and children and have a variety of defined needs. The traditional household has undergone gradual changes over time, and marketers have welcomed the chance to widen their set of products and services to address emerging needs. Recently, though, the concept of family has gone through rapid changes, and what constitutes a household deserves reexamination. These changes promise a wide range of business opportunities across virtually every industry. Unfortunately, a focus on traditional market approaches will likely become problematic in the future, and easy-to-address market segments are breaking up into a plethora of subsegments and niche markets. Although this article focuses primarily on developments in the United States, similar changes are taking place across most developed countries, forcing marketers to take a closer look at market-specific evolutions.
Various examples in a range of product and service categories show how households and families can change the shape of markets.
Marriage, which has been an important component of families and households, seems to be losing most of its relevance for marketing. According to US Census Bureau (Suitland, Maryland) and survey data, in 2010, only half of US adults were married—a steep decrease from 72% in 1960. This decrease parallels the development of a diverse set of living arrangements. For instance, during the period 1970 to 2010, the number of cohabitating unmarried heterosexual couples increased from half a million to more than 7.5 million as the size of the US population grew by about 50%. In addition, the increasing legal recognition of same-sex marriage is changing the definition of marriage. Other living arrangements include unmarried couples cohabitating with or without children, single parents raising children, and single people living by themselves. This increase in diversity is segmenting the marketplace. And although social science is still trying to understand what implications these new arrangements have for society, product and service providers must find ways to address the varying needs of the different segments appropriately. Interestingly, the nature of divorce is also changing: Marital separation is becoming an alternative to divorce among financially limited people.
The American Community Survey, a statistical survey by the US Census Bureau, found that in 2011, 62% of women ages 20 to 24 who had given birth within the previous 12 months were unmarried, whereas only 17% of women ages 35 to 39 who had given birth within the previous 12 months were unmarried. The study also showed differences across ethnicities and that low income and education levels increased the likelihood that a woman would become a single mother. Of particular concern for social scientists are potential implications for children raised by single parents. Jayanti Owens, a PhD candidate in sociology and demography at Princeton University (Princeton, New Jersey), argues that the rise of single-mother families helps explain increases in behavioral problems among children. She found that a single-mother upbringing seems to affect boys more negatively than it affects girls, which, in her opinion, could explain why young women are now more likely than young men to finish high school and attend and graduate from college—particularly in the middle- and low-income groups with a higher percentage of single mothers.
The breakdown of income and purchasing power within families and households is shifting too. The Pew Research Center (Washington, DC) found that in 2011, mothers were the primary or sole income source for the family in 40% of US households with children younger than 18, which is a substantial increase from 11% in 1960. Of these mothers, 37% (5.1 million) were married and brought in more income than did their husbands, and 63% (8.6 million) were single. Interestingly, though, the number of stay-at-home mothers in the United States also gradually increased from 2010 to 2011—the first time it did so since the economic downturn of 2008. Staying at home with children is a lifestyle option available primarily to the affluent (families with incomes of $100 000 per year or more); however, significant numbers of young mothers ages 25 to 35 and women in families with incomes of $75 000 to $100 000 are beginning to choose the stay-at-home lifestyle.
Illustrating the general splitting of markets into submarkets, even a variety of single-person-household configurations exist. Single-person homes account for 27.6% of households in the United States, 31% of households in Europe, and 47% of households in Sweden, which has the highest proportion of single-person homes in the world. The number of single-person households is expected to grow to reach 331 million worldwide by 2020. Information-services firm Experian (Nottingham, England) identifies four categories of people who make up single-person households: Starting Out Singletons (young people with adequate income), Struggling Singletons (less-affluent singles between 18 and 25), Suddenly Singletons (typically about 40 years old with high revenue), and Solus Singletons (elderly people who often have to downsize).
Various examples in a range of product and service categories show how households and families can change the shape of markets:
- Japanese social entrepreneur Atsuko Horie offers a service that connects college students with families that require support for domestic household chores and child rearing. Horie believes that the program gives young people an idea of what attempting to balance their professional and personal lives is like before they decide to start families themselves.
- A look at people's mealtime behaviors is perhaps illustrative of how changing family dynamics can affect food and beverage manufacturers. In 2011, 72% of family eating occasions involved only adult members of the household (only 28% included children), and 44% of all adult eating occasions involved a single person. About 10% of adults even have their breakfast in the car. Perhaps family cohesion is weakening.
- Changing family and household dynamics are affecting common household chores such as cleaning tasks, and household-cleaning-product companies are having difficulty adjusting accordingly. According to S. C. Johnson & Son (Racine, Wisconsin), touch-up cleaning—cleaning tasks that take a quarter of an hour or less to complete—is the most common cleaning technique in use, and consumers are employing it with increasing frequency. Touch-up cleaning now accounts for 70% of all cleaning efforts, up from only 40% half a decade ago.
- A number of diverse companies are entering the Swedish child-care market. Some of these companies operate 24 hours a day and offer parents breakfast and dinner. One service even provides reheatable precooked meals to help parents who might not have the time to cook dinner after they get home from work.
These examples provide only a glimpse of the implications that changes to family and households can have on markets. Such changes will only accelerate in the coming decade, leaving companies struggling to adjust to altered market conditions.