The Creative Class: Big Business Builders

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More than one in three American labor force participants (35 percent) are millennials, making them the largest generation in the U.S. labor force today, according to a Pew Research Center analysis of 2017 U.S. Census Bureau data. Boomers represent 25 percent and Gen X, 33 percent. Therefore, by the numbers, millennials, combined with the Gen Z cohort (5 percent of the labor force), are now the largest generational consumer group (at 40 percent). Popular opinion is that these two generations have the most influence and impact on retail. We hear and read about it 24/7 as retailers scramble to figure out how to serve them.

However, there is another group that has received little attention regarding its impact on the retail sector; one which we rarely hear about, if at all. It\’s the cohort of the population called \”the creative class,\” coined by Richard Florida in 2002. Florida, a sociologist, economist and professor at the University of Toronto, wrote The Rise of the Creative Class. His work was and still is geared to urban planning, focused on those people who are creating the cities of the future – and those who want to live there. ( He maintained that the creative class would be responsible for driving economic growth in the world. Although his thesis was introduced 17 years ago, it is a relevant and under-the-radar methodology to hyper-focus on consumers who have and continue to lead change across many different aspects in our society from urban planning to retail.

The creative class is not defined demographically, but qualitatively, meaning psychographic characteristics drive preferences. The creative class combined with tech-driven retail can be credited as the group that most changed retail. In my opinion, those retailers that can identify and understand the creative class cohort among their existing customers, are those who will be able to identify and target new customers, thus the holy grail of expanding share of market.

What Is the Creative Class?

Florida defines the creative class as: \”People in science and engineering, architecture and design, education, arts, music and entertainment whose economic function is to create new ideas, new technology and new creative content.\”

Citylab reports, \”the creative class is currently sized at about 44 million workers, earn 50 percent of all wages and have 70 percent of discretionary spending. If retailers are not segmenting and analyzing the desires of this cohort, then engaging with them, they will slip behind the curve.

Florida believes that creativity is the \”most prized commodity\” predicting in 2003 that the creative class would rule the world by driving economic growth. Today, 16 years later, it\’s easy to see this prediction playing out. U.S. job growth is driven by knowledge-based professions as it continues to decline in manufacturing. The creative class has had a profound effect on nearly all aspects of business from tech and real estate to retail as it approaches its second decade.

I argue that it is the creative class, more than the demographically defined group of millennials and gen Z, who will continue to radically change the global socio-economic landscape. I believe it is the creative class who have so definitively determined the rise and fall of retailers and brands over the past 16 years.

One Small Additional Detail

Let\’s take a minute to review what also happened in 2003: the introduction of broadband. In 2003, more than 20 percent of Americans had broadband in their homes, enabling personal access to the internet and better quality access to online shopping.

However, the introduction of broadband in people\’s homes didn\’t just mean that more people were buying online, it also meant that people were starting to conduct more research online before placing a physical order. With easy access to the internet increasing, the average time spent researching products and searching for more competitive prices also increased. It also presaged that we would be more mobile consumers. As Robin Lewis pointed out in the books he co-authored, The New Rules of Retail and Retail\’s Seismic Shift, remote access to work and shopping fueled the creative class which, in turn, changed retail forever. And the introduction of the iPhone in 2007 changed everything.

The Wrong Lens

Millennials and Gen Z\’s have been studied and described by many research experts in a myriad of ways and yet a clear roadmap seems to have been lacking for traditional retailers. The risk of aggregating such an enormous sector of the population and assuming they are all the same is a quantitative mistake. Understanding groups through a psychographic lens reveals more meaningful understandings and insights of how their values, attitudes and lifestyles influence their choices as consumers. Overlaying the characteristics and preferences of the creative class on the millennials and Gen Z can provide a better roadmap to marketing and selling to them.


For a city to attract the creative class, Florida argues \”it must possess \”the three T\’s: Talent (a highly talented/educated/skilled population), Tolerance (a diverse community, which has a \’live and let live\’ ethos), and Technology (the technological infrastructure necessary to fuel an entrepreneurial culture).\” In Rise of the Creative Class, Florida argues that \”members of the creative class value meritocracy, diversity and individuality, and look for these characteristics when they relocate.\”

In looking at the three T\’s, I will extrapolate and use these characteristics and relate them to retailers and brands:

  • Tech means a tech-based, digital-focused, business rooted in technology; tech\’s sole purpose is to serve the customer.
  • Talent means that the innovation be incredibly disruptive, innovative or industry-busting. it also can mean very high level of design aesthetic, ease of use/interface.
  • Tolerance means that moral values and acceptance is built into the brand DNA from the origin or adapted in such an authentic way that it is meaningful and not just a marketing scheme.

Here\’s how it works. The graph below illustrates the intersection points of the three T\’s and core values. Included are traditional retailers and new retailers valued at over a 1.0B.

  • Talent + Tech = Companies that deliver operational excellence, frictionless interface.
  • Tolerance + Talent = Companies that excel at customer interface and service and embrace all.
  • Tech + Tolerance = Companies that deliver data based retail and fully embrace the all-inclusivity.
  • Tech + Tolerance + Talent = the holy grail.

\"\"Retail today encompasses two spectrums: those who sell everything to everyone and are the best at that and those who sell few things and excel at those few things. This graph exemplifies that retailers at both ends of the retailing spectrum from the everythings (like Amazon and Walmart) to the few things (like Apple) are impacted by the creative class.

Urbanization and New Attitudes

In 2003, Florida said cities which attract and retain creative residents prosper, while those that do not stagnate. A Washington Post article stated that Florida\’s argument, in short, was that in order to save themselves from post-industrial ruin, cities needed to attract the best young talent in computer programming, engineering, finance, media and the arts so their towns could build economies based upon the venture capital and start-up companies the new workforce would produce.

Now, here is that paragraph edited so that it applies to retail with the words retailers and shoppers instead of cities and residents:

Retailers which attract and retain creative class shoppers prosper, while those that do not stagnate.

In short, in order to save themselves from post-industrial ruin, retailers needed to attract the best young shoppers [in computer programming, engineering, finance, media and the arts] so their stores could build businesses based upon [the venture capital and start-up companies] the new workforce [it] would produce.

Often taking a clue from Florida\’s mantra, real estate developers dialed up hip, tiny apartments designed for creative residents and outfitted them with coffee bars, gyms, pool tables, bocce courts, pool decks and fire pits. Mayors invested in better sidewalks, bike lanes and business incubators aimed at nurturing the new arrivals and keeping them around longer.

The blueprint for growth was laid out right in front of retailer\’s eyes! How could they miss these shifts that were happening in real estate, urban development, and the workplace and not evolve with it? Does that mean they should have put a bocce court in the middle of the cosmetics floor? As we have the luxury to stand in the present and judge the past, based on what we see today in traditional retail winners and losers, it\’s tough to find any evidence that these powerful shifts were incorporated as economic drivers into many of the struggling traditional retailers\’ strategic plans.

Now What?

To be honest, for those who are lagging behind in understanding how the power of the creative class can play into economic success, a tremendous amount of work is needed. It\’s simple but that doesn\’t mean it\’s easy. We all live in fear of another Ron Johnson-esque premature pivot right off a cliff making dramatic changes before its customers were ready. Winners and survivors must study the massive impact the creative class has had and continues to have in the next gens and put them front and center. Iterative, table-stakes retailing will not connect with the creative class.

The work is daunting but Rome wasn\’t built in a day.



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