No Generation "Gaps"

Is that an echo we hear out there in the market; or is it just our imagination?

Indeed, it is an echo, as in Echo-Boomer, the shopper who's come of age.

Yes, the Boomers' babies — Gen-Y — are all grown up; and these apples are not falling far from their trees, at least financially. In fact, they wield substantial fiscal clout, a reality that has definitely caught the attention of the industry's vendors.

This year's Gifts & Decorative Accessories “Trends and Forecasts Survey” found that nearly a third of respondents are developing new products aimed specifically at the Echoes, who range in age from 12 to 30 years old. When it comes to being product targets, this Gen-Y demographic was third, following number two Gen-Xers, who range in age between 31 and 41 years, and the number one target, Baby Boomers, who now range in age between 42 and 60 years old.

Nearly 50 percent of vendors responding to the G&DA survey reported they will target Boomers with new products next year, with 42 percent of respondents stating they are developing product specifically targeted to Gen-X.

In order to successfully target these generational demographics, vendors will be making significant changes in product development and direction.

In licensing, for example, pop characters and sports/collegiate are moving further above the radar. While fashion designers continue to anchor licensing as the number one product development choice, sports/collegiate soared to second place in this year's survey, from fifth place last year, pushing '06's number two — artists/illustrators — down to sixth place.

Book/movie characters and pop characters also gained a fair amount of favor among vendors compared with their 2006 licensed product development choices. Among the survey's respondents, 41 percent reported that book/movie characters were important or very important, compared with 30 percent a year ago, while 33 percent vouched for the importance of pop characters, compared with 26 percent in 2006.

Even where design direction is concerned, vendors appear to be catering to Boomers and their offspring.

Coastal/cottage, for instance, is a design direction vendors say is heating up — likely as an attempt to woo Boomers who are finally shopping for that lifelong dream vacation, or “second” home. This year (the year leading edge Boomers turn 60 and are actually entering or at least eyeing retirement), survey respondents ranked coastal/cottage as the third “hottest” design direction, compared with last year's ranking of fifth.

And while modern/contemporary and retro — designs that are attractive to both Boomers and Echo-Boomers — still rank as numbers one and two according to this year's survey, tropical island, lodge, safari adventure and Americana have disappeared from the design directions '07 hot list.

In all, vendors told G&DA that they are optimistic about 2007, with almost three-quarters forecasting higher sales in 2007 than in 2006. And vendors share that same optimism with their customers: Nearly two-fifths of the responding vendors described their most important sales channel as gift specialty stores. Another nine percent each reported that home accessories stores or stationery/card shops are their most important sales channel. Other survey highlights:

• In 2007 vendors are planning to introduce a median of four new collections or lines, down from the five forecast last year and back in line with the projections from the two earlier years.
• Between six and 16 percent of responding vendors are developing products for the tween (ages 8–12), Latino/Hispanic, African-American and Asian market segments
• Over three-quarters of vendors report having more than just an online presence; they also have online catalogs. Almost half of these vendors let retailers place orders online.
• Almost one-third of responding vendors sell directly to consumers online, estimating that a median of five percent of their total sales in 2006 were made from online sales to consumers. Their forecast for 2007 shows that amount doubling to 10 percent.

This year's Gifts & Decorative Accessories “Trends and Forecasts Survey” found that nearly a third of respondents are developing new products aimed specifically at the Echoes, who range in age from 12 to 30 years old. When it comes to being product targets, this Gen-Y demographic was third, following number two Gen-Xers, who range in age between 31 and 41 years, and the number one target, Baby Boomers, who now range in age between 42 and 60 years old.

Nearly 50 percent of vendors responding to the G&DA survey reported they will target Boomers with new products next year, with 42 percent of respondents stating they are developing product specifically targeted to Gen-X.

In order to successfully target these generational demographics, vendors will be making significant changes in product development and direction.

About the survey …

This year's survey, fielded during August and September, is based on the answers of 382 vendors who replied to either the fax or online version of the survey. Gift and decorative accessories' vendors can best be characterized as producers or suppliers of a dizzying array of products.

Vendors responding to the survey represented a range of annual sales volumes, from less than $500,000 to more than $40 million. The bulk of them, about two-thirds, have sales ranging from under $500,000 to just under $3 million. Another one-quarter describe their annual sales as at least $3 million, but less than $10 million. The remaining 13 percent have sales of $10 million or more.

Judi Fulbright (jfulbright@reedbusiness.com) of Gifts & Decorative Accessories' Market Research Department spearheaded this year's survey of gift and decorative accessories manufacturers with special assistance from Cynthia Myers, database coordinator, and Patrice Rahming, research assistant.