A recent report says that the next generation of parents will come from the tech savvy and brand-conscious Millennial generation, and that this group will buy most of their baby products online or via mobile shopping apps.
In a report released last month, IBIS World predicts that as the economy starts to improve and people consider starting or expanding their families once again, five baby-related sectors can expect to see increased growth: 1) pregnancy testing, 2) women’s health hospitals, 3) online baby and infant apparel, 4) traditional children and infant clothing retailers and 5) maternity wear retailers. Family apparel, generally, will also benefit from growth as the global recession recedes, the data analysis group concluded.
So while Pew Research Center reports indicate that during economic decline women delay their decision to have children, but as it ticks back up renewed spending on the baby-related industry will tick back up as well. IBIS World expects revenues in this industry to grow at an annualized rate of 6.5% over the next five years thru 2018, as unemployment falls and consumer confidence increases.
With families having more disposable income, would-be expectant parents will be able to spend more in these industries even than before. ISBIWorld noted that during the recession, those who did get pregnant would use cheap store pregnancy tests, and forewent pricey digital pregnancy tests.
But as the economy improves, expect women to spend more on family planning conception aids, ISBWorld writes in its report. Would-be new parents may start again buying ovulation kits and things like at-home sperm count diagnostic tests like those biotech companies like ContraVac Inc. began marketing in 2012.
The report further noted that because Generation Yers are a brand-conscious aspirational niche market, luxury brands may be able to benefit from the economic shift upwards. During the recession, many more people relied on discount stores and less on high-end brands. Luxe brands had excess inventories and saw their revenues drop tremendously from 10% to a record low of 3.1% in 2008. In tougher economic times, women’s health centers also saw a drop in usage as women lost their jobs and people tied their belts tighter and adjusted their budgets.
But that tide will turn as the economy improves over the next few years. Online retailers will be the biggest competitors to traditional brick and mortar stores because they can offer more variety at one stop.
The report suggests that while brick and mortar stores and mega internet distribution retail giants like Amazon.com will continue to play a major role in parent buyers’ lives, other businesses that cater to this market will be best positioned to benefit in this competitive landscape if they embrace mobile and online technology.