Baby Boom Or Bust?! Either Way, Market Orientation Is Key!

An interesting story popped up when I was reading the morning paper, “Birth Drop Is No Bundle Of Joy” covers that that birthrates in the United States are down significantly during the pandemic. And, are projected to drop 8% in China.

While the story mostly focuses on what the lack of new babies means for the businesses that provide products and services to newborns and their parents, the story also shows the importance of market orientation when thinking through your business decisions.


I’m glad you asked.

Conventional Wisdom Is Often Wrong:

If you check #BabyBoom you’ll see some hypothesis or one offs that suggest that people were getting it on like crazy during the pandemic, but the numbers don’t back it up.

Some doctors are predicted as many as a half million fewer babies in the United States this year due to the pandemic.

By turning the lens from our need to sell baby things, the reasons behind this decline are pretty evident in our own lives:

  • WFH has caused new stress, work to seep into everything, and made having quiet time much more difficult for a lot of people.
  • The stress of a pandemic in the States where we are entering a third peak has created an environment where McKinsey reported that about 80% of people don’t feel comfortable doing things outside of their homes.
  • Axios studies the real economy in the United States and discovered that it is likely that around 26% of Americans are unemployed right now.

Those are just American numbers but the stress and strain is being felt in every country.

This would show you that it is very unlikely that people are going to be running around to make babies in an environment that feels more uncertain by the day.

Trends were already showing that birth rates and numbers of children were changing:

That old saying that you needed your 2.3 children to replace mom and dad has gone out the window over the years.

The average birthrate in the United States had dropped to 1.93 kids per family in 2019.

This is a long way from the large families of the mid-1900s.

Behind this trend is an interesting idea that as people are having less children, they are spending more money on the children they do have, leading to opportunities for more high end clothes, food, and accessories.

By keeping an eye on the market, you’d recognize that the spend per child was getting higher and the number of kids per family was dropping. This would have enabled you to change your product mix.

There are other trends and interesting pieces underneath the baby boom that is likely to be a bust, but the big thing is that you need to make sure you are focusing on your market so that when something happens, you can understand the world your market exists in…not just the one you are projecting them to be in.

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