42 Degrees - Business from a different angle

Give them what they want

Walk down any high street on a Saturday or try using public transport on a weekday afternoon and there seems to be no shortage of them. Indulge in a little channel surfing when you get home and it seems that the whole world is geared towards entertaining them and satisfying their every desire.

But you had better start loving the awkward, moody, irritating little dears, because the surprising fact is that the teenager is rapidly becoming an endangered species.

Today there are 7.75m people aged between ten and 19 in the UK. They account for just under 13 per cent of the population. Within five years there will be roughly 300,000 fewer. Within ten years there will be 700,000 or ten per cent fewer and they will account for just over 11 per cent of the population.

It's a demographic shift with profound implications for any company selling to young people and it needs to be confronted as a matter of urgency says futurologist Sean Pillot de Chenecey of youth marketing consultancy Captain Crikey. "Most company profits are made on the margin," he explains. "If you're targeting teenagers and their numbers are about to fall by ten per cent, there goes your profit." Not to mention your apprentices, new recruits and junior staff.

So just what can you do to minimise the effects of this trend? "It's hard to say", seems to be the unwelcome and unhelpful response of marketing experts. Unfortunately it is in the nature of teenagers to be unpredictable and volatile in their tastes, and all the evidence points to them becoming even more so.

It means every consumer industry is going to start to resemble the fashion industry. "Tastes are changing faster than ever," says Pillot de Chenecey. "Product cycles in all sorts of markets are becoming shorter and shorter. The problem will be how to respond to a trend today that you know will be dead in a year."

Speed will be of the essence and the consequences will be dire for those who don't keep up. Pillot de Chenecey cites the example of monthly magazines, where the lead times for the production of a new issue are now longer than the lead times for clothes retailers to produce new lines that the magazines used to advertise. This has made them far less relevant. "The only way to deal with this is to embrace the accelerated brand promiscuity and build extreme flexibility into your business – not just in marketing but also in production and new product development," he says.

A key aspect of this increased suppleness will be the ability to discern and act on changes in taste before they become established. That in turn requires a real understanding of young consumers. "You can't just go through the motions of market research any more. It won't be enough to simply ask people what they want, you need to really get under their skin," says Peter Shaw, marketing director of marketing consultancy Corporate Edge. "You have to really understand how they live their lives."

The traditional response to a shrinking market would be to find other places to sell your goods. But, paradoxically, teenagers look set to become more, not less, important to business, despite their declining numbers. As family sizes shrink, they are likely to have more personal disposable income of their own. And they will exert greater influence over a wider range of products.

In an ageing and probably more conservative society, they will become the major source of new business. "The reason disproportionate effort is and will continue to be spent wooing teenagers is not because somehow their money is better, but simply because they are so promiscuous in their consumption," says Shaw. "Older consumers have more cash but they are also very brand loyal and they are less open to advertising and persuasion." So the best place to recruit new customers is among the young.

The prospect of a cohort of faddy, picky consumers determining your commercial fate is a dismal prospect for any business. However, there may be one piece of good news for those selling to youth. While the number of teenagers may be in sharp decline, there is and will continue to be a growth in teenage attitudes among consumers of all ages. "Being a teenager is more of an attitudinal thing, based on elements of idealism and irresponsibility," says Shaw. "People carry these traits well into their forties these days. Many brands make a handsome living by selling to people aged 45, but acting 15."

You only have to look at brands like TopShop, iPod, PlayStation and Harley Davidson to see evidence of this. The bad news may be that teenagers will be in short supply in coming years, the good news is, we are all teenagers now.