Shifting Generations

Redwood Comment
Published:  12 August, 2020
Dr Mike Redwood

The shift in generations as Boomers age has been tough for the leather industry. The post-Boomer generations are more urban, more skewed globally towards eastern markets and more impacted by bombardment with non-leather promotions.

For those who shad thought of generational shifts as minor evolutions, exemplified by continuing consumption patterns, this has been a major shock. Many tanners thought leather purchasing would carry on as before and all hides and skins would continue to be used for leather. Even for those who suspected such a change would happen the transition is clearly proving difficult and it has been exacerbated by Covid-19 gate-crashing society and hanging around.

The pandemic has accelerated nearly all of the underlying trends and developments and now we are seeing many surveys, from bodies like McKinsey and Deloitte, looking at how the younger generations are evolving and to try and understand the implications. This is at a time when we are largely past the move from Boomer to Gen X, and Millennials are hurrying into senior positions while Gen Z starts to come of age, filling our colleges, fashion and design schools and our apprentice schemes. Gen Z did not get about the digital world as if it were some clever new device, but grew up in it and take it for granted. We cannot complain that they go everywhere with a screen and earbuds, a world that we created for them; but we do need to understand the implications for retail, purchasing work and society.

In a stark contrast, this coincides with a moment when our political colleagues worldwide continue to find ways to politicise all things and appear to be determined to create an even more polarised society; perhaps it was always thus, but it does some worse today than in the last few decades. The latest area has been to see the concept of sustainability, in particular the ESG (environmental, social and governance) approach that investors are using to assess them, being attacked as an inappropriate metric for pension funds to consider. They argue that such funds should focus only on traditional financial metrics, such as those indicating an ability to pay dividends.  

This is a poor battleground for politicians to choose, as there is now clear evidence that companies with good ESG policies show higher returns over the long term. Alternatively, those caught out with bad policies, or as not being authentic in some way, are quickly punished by investors with big drops in share price, and significant costs in putting matters right. On the other hand, through the pandemic companies and funds which have a good record of responding to sustainability and climate issues have been attracting investors in increasing numbers.

Those trying to politicise sustainability will inevitably fail. Successful private businesses have always taken care to live well within their community. And, certainly, the move towards more thoughtful investment, looking at wider matters than mere financial returns will only grow, as all research makes it quite clear that younger generations have very strong views and these have only strengthened during the pandemic. While the richer older generations hide away and save it is the younger consumers that we now increasingly depend upon. Some Millennials, born between 1981 and 1995, are now 37 and that group between 30 and 40 are increasingly the significant spenders, heavily influenced by their Generation Z children. In the UK, urban 30-40 year olds have been one of the new groups of first time purchasers of automobiles  as they shift from public transport for out of town driving, in order to cocoon themselves on longer trips. Older