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lixx201409

The following appeared in the opinion column of a financial magazine.

“On average, middle-aged consumers devote 39 percent of their retail expenditure to department store products and services, while for younger consumers the average is only 25 percent. Since the number of middle-aged people will increase dramatically within the next decade, department stores can expect retail sales to increase significantly during that period. Furthermore, to take advantage of the trend, these stores should begin to replace some of those products intended to attract the younger consumer with products intended to attract the middle-aged consumer.”

The author cites the fact that middle-aged consumers devote 39 percent of their retail expenditure to department store products and services, while for younger consumers the average is only 25 percent and that the number of middle-aged consumers is going the increase dramatically to support the assertion that retail sales will increase. The author also gives the suggestion that products intended to attract the younger be replaced be those intended to attract the middle-aged. The conclusion and the advice are problematic due to three reasons.

First, the author mention that the percentage of expenditures the two groups devote to retail stores is differentiated. But whether the retail sales will increase or not depends on how much consumers spend in retail stores rather than the proportion. People who go to the departments most often are almost housewives because they need to purchase groceries for the whole family and it is not strange their costs of groceries account for a large proportion of their whole expenditure, which usually, is not a big number since most housewives are busy in housework and do not earn income themselves. So it is highly likely that the money they spend is not as much as implied by the author. Moreover, such demand remains relatively constant,even if any change has been made to attract them. because it is basic needs. As for young consumers, they are usually not married, do not have kids to raise and they generally shop for personal needs. That means more expenditure can be spent at their own wills and more potential purchasing power. In conclusion, a transition to targeting on the middle-aged might not be a smart move.

Second, the author argues that drastic increase in the numbers of middle-aged consumers will bring about increase in sales. A assumption of this argument is that the part of new middle-aged person will choose to shop in a retail store. However, this is totally not true. Think about it, before they enter their middle ages, they are young people and they do not enjoy spending much of their expenditure on department stores. Such shopping habits form from a long time experience and are not likely to change just because of some variations in the arrangement of products in the stores. Besides, the replacement may push young consumers and new middle-aged consumers away. As a result, increasing sales might not happen.

Generally speaking, to substantiate the argument, the author needs to clarify several facts such as the exact number of the expenditure those two groups spend and the how they are going to influence consumers’ shopping habit by their marketing tactics.