Without question consumers are changing, never mind consumer behaviour. Outside of Africa we essentially live in an ageing world. Those born between 1946 and 1964 – the Boomer Generation – are retiring fast. About 10,000 a day in the USA. We have tended to worry more in leather that this leaves a recruitment gap as young people were not entering the industry as it fled to lower cost nations. So replacing staff is much more than managing normal levels of retirement replacement and growth. It is heading to a crisis.

This means there is some pressure for these boomers to stay in work as society is short of skilled workers at all levels and it is hard to say that retirement at 65 today is the same as retirement was at that age 40 years ago when life expectancy was so much less. Yet nevertheless the wave of movement into the world of life on a pension has certainly begun.

Over the last 20 years many industries, like golf, have done well by enjoying the spending power of early retirees on defined benefit pensions with good inflation clauses, but the financial crash of 2008 put paid to that for many and the new retirees are much more of a mixed bunch. They are much more frugal, and more likely if they have money to spend it on experiences like travel than on more goods.

Have no doubt that the USA and the EU, as well as Japan, remain wealthy areas with high GDP looking forward even to 2030, so will remain hugely important markets for all things made of leather; but they are changing. We are already seeing the implications of the rising significance of the emerging markets like China where some unrealistic expectations have suddenly had to be reconsidered.

With this comes the other end of the change as with the Generation X being small numerically it is to the under 35s that we now will look for the new managers and new consumers. These are youngsters of the digital age, who have grown up spending money on a monthly contract for a mobile phone rather than saving to buy a new pair of sneakers. Goods are less important and like the new retirees owning “things” has diminished importance. They still buy but there has to be a good reason.

That is the task for leather: to ensure that what we make creates a good reason to buy, appreciate, enjoy and buy again!

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Mike Redwood


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