Whole Foods is holding wine tastings. Ikea is pitching apartment furniture to divorced dads. Applebee’s turns into a nightclub after dinner.
These companies are all targeting an increasingly coveted demographic: single Americans.
More than half of U.S. adults are now unmarried — a 125-million-strong cohort that spends about $2 trillion on goods and services a year, according to the U.S. Bureau of Labor Statistics. Economist Edward Yardeni calls them Selfies, who are free to spend selfishly because they’re not saving for college, paying off a mortgage or buying clothes for their kids.
“They’re self-centered by definition,” Yardeni said in a telephone interview. “They spend money on themselves or they’re saving it for consumption down the road.”
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Consider Molly Louthan, 31, who earns about $130,000 a year as a sales associate at Advancing Women Executives, a networking firm. She lives by herself in an upscale high-rise overlooking Chicago’s Lincoln Park and has the freedom to eat out most nights and travel often. Louthan has no immediate plans to get hitched.
For decades, companies from Procter & Gamble Co. (PG) to Kraft Foods targeted traditional families traveling predictable life stages, from buying homes to having kids to retiring. Marketers focused mostly on mom, who controlled the household budget and decided what her family would buy.
Now they confront a more fragmented and confounding marketplace, where their target customer could be a millennial too focused on career to tie the knot, a proudly single woman in her 30s who privately pities her married pals or an empty-nester who just got divorced.
‘Difficult Target’
“It’s very difficult to target them because there’s so much variety,” said Christopher Lehmann, a Chicago-based executive creative director with Landor Associates, a global brand consultant. “There’s a danger in thinking of it as one big target audience.”
Singles are increasingly seen as a target market in other industrialized nations, including the U.K., Japan and South Korea. In China, Alibaba Group Holding Ltd. (BABA) has capitalized on an obscure Nov. 11 holiday called Singles Day. Merchants offer discounts of at least 50 percent and this year rang up $50 billion yuan ($9.3 billion) in sales, according to Alibaba, an online shopping company.
Though America has been getting steadily more single since the 1970s, the economic upheaval of the past several years has accelerated singlehood. In September, Yardeni reported that for the first time more than 50 percent of Americans 16 and older are single. Back when the government started tracking the metric in 1976, 37 percent of adults were unmarried.
Delaying Kids
Millennials, grappling with a tough job market and stagnant wages, are delaying marriage so they can focus on their careers. That in turn means delaying kids and a house in the suburbs. As a result, they aren’t buying big-ticket items like lawn mowers, washing machines and SUVs. They also eat out a lot and tend not to fill up their shopping carts with a week’s worth of groceries. That’s bad for Kraft but good for premium fast-food chains like Chipotle Mexican Grill Inc. (CMG)
Martin Dieffenbach, 33, moved to San Francisco about six months ago for a job as a sales manager at a technology company. He’s been to the grocery store twice since moving into the Mission District house he shares with three roommates.
Dieffenbach, who says he makes about $160,000 a year, usually eats two meals a day in the company cafeteria and often goes out with friends after work. If he’s at the office late, he’ll grab a sandwich on his way home. With no mortgage or car payments, Dieffenbach can golf and ski and still put money away.
Single Boomers
Increasing numbers of Baby Boomers are single, too. The divorce rate among people 50 and older doubled between 1990 and 2010, according to the National Center for Family and Marriage Research at Bowling Green State University, in Bowling Green, Ohio. In 2010, about 25 percent of divorces were among adults over 50.
A record number of Americans have never tied the knot, according to a recent survey by the Pew Research Center. In 2012, 20 percent of adults 25 and over had never married, up from 9 percent in 1960. Back then, 10 percent of men over 25 had never married — that number jumped to 23 percent in 2012.
Brian Way never married. Now 46, the sporting-goods sales executive lives in Denver and has a vacation home in New York’s Adirondacks. Singlehood means buying outdoor gear at Patagonia or a jacket at Nordstrom Inc. (JWN), rather than searching around for the best deal. Way shops at Whole Foods Market Inc. (WFM), drinks better wine and can replace his Chevrolet Tahoe a year or two ahead of schedule, rather than driving it into the ground.
‘No Hesitation’
“There’s no hesitation when I want to make a purchase,” he said. “Those little hiccups that come along don’t keep me up at night, because I know it’s just me.”
Way contrasts his lifestyle with that of his brother Jim, a 53-year-old contractor in Sitka, Alaska, who has five kids and works a second job as baggage handler to pay for it all.
As Brian Way and Dieffenbach can both attest, singles aren’t easily shoehorned into one category. Even as companies struggle to reach them, they are loath to alienate the 49 percent of married Americans or those in committed relationships. Or, for that matter, people who want to wed but haven’t found a mate.
“You’re not likely to see an ad that says ‘Congratulations, you’re single,’” said Anastasiya Pocheptsova, who teaches marketing at the University of Maryland’s Robert H. Smith School of Business in College Park. “You always want to compliment the consumer.”
Oblique Approach
So even though companies now have reams of data to target ever narrower niches, many have adopted an oblique approach. Rather than target singles directly, they’re going after broader categories, such as city dwellers and millennials.
“They’re not saying it out loud, but the offerings are targeted at people more likely to be single,” said Pocheptsova. “It takes time for social norms to catch up with reality.”
Ads for an Ikea line of furniture designed for cramped city apartments show young consumers carrying small tables and shelves home on the subway or bus. Ikea has hosted press events featuring bedroom options aimed at divorced fathers whose kids visit a few times a month.
“We focus on living situations, rather than the classic demographic way of targeting people,” said Mikael Ydholm, the company’s global director of research. “If you get divorced, it usually ends up with a visit to Ikea.”
Mysterious Odor
P&G last month unveiled “New York Tough,” the company’s first marketing campaign aimed at the urban market. The ads on the subway and local radio are aimed squarely at young, single apartment dwellers. As part of the push, P&G sponsored a BuzzFeed post featuring “13 Smells That Every New Yorker Is Way Too Familiar With.” (No. 1: “Mysterious odor left behind by the previous renter.”)
“You’re seeing a shift to an audience that might actually be open to being influenced by new brands,” said Robert Passikoff, the founder of Brand Keys Inc., a New York consulting firm. “They’re not sitting home watching daytime TV looking for a new way to clean their clothes or their floor.”
Some Viagra ads eschew couples altogether. Instead, they feature rugged middle-aged men sailing solo and performing other manly acts. There is no romantic partner in sight. Jay Baglia, who teaches communications at DePaul University in Chicago, says Viagra maker Pfizer Inc. (PFE) is trying to reach, or at least not exclude, men who are “newly divorced, still single or even newly widowed.”
Protein Pack
Restaurant chains and grocery stores are less squeamish about targeting singles directly, especially younger ones who tend to snack throughout the day or eat out rather than sitting down for elaborate family dinners. Kraft has responded with “on-the-go” options like the Oscar Mayer P3, a protein pack with cheese, nuts and meat. Whole Foods offers packaged food that’s ready to cook, and customers cooking for one can go home with butchered meats and produce designed for a single serving.
Some Whole Foods locations have in-store tap rooms and wine bars and have hosted speed dating events for “successful singles” ages 25-38. At the Whole Foods in Monterey, Californiathere is a “Singles Night” the week before Valentines Day where customers can sample wine, sushi and beer. Last year, a pianist was on hand to set the mood.
Been to Applebee’s lately? The DineEquity Inc. (DIN) chain that fed thousands of suburban families has turned into a singles scene at night, with DJs, karaoke and Ladies Nights. Patrons in their 20s and 30s have taken to calling the joint “bees.”
Emphasizing Freedom
Travel companies from Expedia Inc. to Kayak are profiting from all the single women with a yen for adventure. A report earlier this year from DeVries Global, a New York public-relations firm, found women aged 18 to 50 without kids, 59 percent of whom are single, spend an average of $471 per trip, compared to $292 for women with kids. Non-moms, as DeVries calls them, take longer vacations than moms and spend 60 percent more days per year abroad. Travel companies reach these women by emphasizing their freedom, said Adrianna Bevilaqua, a DeVries managing director.
“Nobody wants to be marketed to based on what they don’t have,” she said. “What this woman does have is autonomy and financial freedom and a sense of independence.”
Louthan, the Chicago sales associate, routinely flies on United Airlines to Atlanta to see her niece and nephew, heads west to ski or flies to Amsterdam for a dance party on a canal boat. This Christmas, she’s off to Japan and India; in July, she’s going sailing in Greece. Since her salary rose north of $100,000, Louthan has traded hostels for nice hotels and eats at better restaurants.
“My friends who love to travel cut back a lot once they got married,” she said. “But it’s more when they have kids.”
Date: November 14, 2014