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ISSUE 1 - April 6, 2021
What The Birth Dearth Means For Business
For anyone who thought -- even jokingly -- that the stay-at-home pandemic conditions would result in a surge in the number of babies being born, turns out we were all wrong. Births declined substantially in 2020 and that continues an ongoing trend that has serious impacts on all kinds of businesses.
READ MORE: What would you say if you depended on a demographic segment that was 8 to 10 percent smaller than it was just two years ago and only three-quarters the size it was a little more than a decade ago? If you weren’t worried, you probably should be.
That’s the hard truth when it comes to doing business in anything to do with new babies. Even though many people thought that in 2020 as Americans were forced to quarantine at home and restrict outside activities it would lead to a resurgence in the number of new babies being born, in fact the opposite has happened.
New numbers just coming out at the start of 2021, which would reflect birth activity initiated during the early stages of the pandemic in March and April of 2020 show total numbers for the calendar are expected to show the decline in the birth rate accelerating not reversing.
A study by two university economics professors as reported in a recent Wall Street Journal article projected that overall births would drop about 8% versus projections without Covid-19. That would result in 300,000 fewer births for the year, taking the already low 2019 number of 3.5 million down to 3.2 million births. By point of comparison in 2007, the peak year for births — surpassing even the baby boom era — it was 4.3 million.
These are astonishing numbers that will reverberate throughout American society in general and the business community specifically, not just for this year but for decades to come. Because even though the immediate business victims will be companies and retailers who make and sell baby products like diapers, juvenile furniture, baby food and clothing and infant toys, as this class of 2021 ages it will continue to underperform due to its reduced numbers. From companies like McDonald’s, which cater to young families to day care centers to traditional toys and children’s clothing it will go on and on.
For the home furnishings sector, the immediate impact will be on juvenile furniture like cribs and dressers but look too for categories like lighting, consumer electronics and teen furniture to feel the impact in the years to come.
Combined with the immigration policies of the previous U.S. administration that restricted foreigners coming into the country and boosting the overall population, it could mean the country is in danger of hitting a demographic plateau and perhaps even a decline in the overall number of people living here.
The birth dearth is real in 2021 and there’s nothing to indicate it’s going to reverse anytime soon.
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Can Lugg Be The Uber Eats of Home Furnishings?
"We want the world and we want it now” may have been sung decades ago by another generation but shoppers today feel the same way, opening up the opportunity for fast, Instacart-type deliveries of home furnishings products from a new start-up, Lugg.
READ MORE: Services like Uber Eats and Instacart have forever changed the dynamics of the restaurant and grocery businesses with their quick delivery services. Now Lugg is trying to do the same thing for home furnishings products, including lighting.
Begun in 2015 by two entrepreneurs in the San Francisco Bay Area -- where else? -- Lugg is a delivery service that brings both newly purchased products from the store to a shopper’s home as well as furniture just being moved from household to household. At first its founders waited at the Ikea home delivery area and tried to get consumers to use its delivery trucks that day rather than wait for Ikea to take care of it days later. The idea caught on and before too long people were using Lugg for more than just new purchases, they punched up a delivery for Craigslist buys, charity donations and basically anything else that needed to be…well, lugged.
Today Lugg operates in 10 major U.S. metropolitan areas and has working partnerships with a number of well-known retailers, including Costco, RH and Mattress Firm…not to mention Ikea itself. About 70% of its business is with retailers, the rest with individuals wanting to move things. In the meantime the start-up has attracted about $7 million in venture capital funding, always a good sign when you want to judge how credible a new company actually is.
Jordon Brown and Eric Kreutzer, the pair who began Lugg, see a great deal of upside potential in their model and report more retailers inquiring about working together. “The idea that these furniture retailers needed an Amazon-type delivery that was same-day, on (the buyer’s) schedule, was pretty apparent,” Brown said in a recent interview.
“I think our generation is very different in that we want instant gratification,” said Brown, “and a lot of retailers are starting to really get in line with that.”
You’ve Heard Of Alibaba But You Don’t How to Do Business With It
Much as Amazon dominates U.S. e-commerce, Alibaba and its Tmall online marketplace is the big dog in China and for companies looking to sell on its platform it can be a bit confusing. So this quick video put together by Alibaba explains the basics and sets you up to begin looking into doing business in the second largest consumer market in the world.
Thank you for reading this month's issue of LIGHTSOURCE.