Column: Risk Management

Rise of a New Consumer

By: | March 3, 2014

Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at [email protected]

I love music. My best memories involve me dancing to pop music playing on our kitchen AM radio at age 10. I am a Generation Xer.

Back then, this is how it was: We waited for a favorite song on the radio and tried to tape it on, what did we call it? Ah, yes, a cassette tape.

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With allowance money, we invested in our favorite band and bought an album on, what did we call it? Ah, yes, a vinyl record. The sound was rich as was the human experience.

Over time, however, I chose convenience over the human experience. Today, I have no vinyl records, my cassette tapes are long gone, and a handful of CDs are scattered beside a CD player that is collecting dust. My music today is played back in digital format.

I am hip and integrated with the new digital age. I am a cool Gen Xer who is in close-step with Generation.com, aka the millennials. Or am I?

Why do I doubt myself? Because of this data. According to Nielsen SoundScan, CD sales have declined by 14.5 percent in 2013 while vinyl record sales grew 32 percent, from 4.5 million units sold in 2012 to 6 million sold in 2013!

Why are millennials buying vinyl records? More concerning is how did we — baby boomer and Gen X, 36- to 68-year-old corporate directors — miss this? Millennials are today’s tweens, teens, college students and young corporate workers, ages 10 to 35. They are our consumers of today and tomorrow.

Max Valiquette from Toronto-based Bensimon Byrne, a trends expert on what’s “young and now,” shed some light on these consumers.

Valiquette was asked why he thought a non-digital culture is experiencing a renaissance.

“Because we’ve so fully integrated digital culture into everything that we do, it no longer surprises us or delights us,” Valiquette said.

“Now, we seem to be looking for analog experiences — something warmer, earthy and more tactile … .”

He stated that “understanding millennials has never been more important than it is right now.”

He described this generation as “digital natives” who have grown up with technology their whole lives. The rise in “analog” culture translates to the rise in wanting things that millennials can make, touch and feel.

The rationale behind the rise in vinyl record sales is best explained by audiophile blogger, Andy Cush: “For people my age, having grown up with Napster, etc. … it feels silly to pay for MP3s.

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“For those of us who want to pay for music, vinyl is a way to do that in return for something that isn’t easily obtainable for free on the Internet. And for audiophiles, the sound quality of vinyl is often a factor too.”

Cush, like many of his generation, is thirsty for quality human experiences. And members of that generation are willing to pay for those experiences.

This lesson should not be lost on those who practice risk management.

The business world is facing the rise of a new kind of consumer — a gentler, somewhat nostalgic consumer. As power shifts in corporations from baby boomers to millennials, deeper, more empathetic sensitivity training is imperative about this generation.

Missing the mark with our millennials will be far too big of a risk.

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The R&I Editorial Team can be reached at [email protected]