The stork has difficulty landing all over Europe, where fertility rates have steadily declined over the past decades. At the same time, the challenges of an aging population are becoming more apparent – and the joking comment that soon more diapers will be sold to care-dependent elderly than to babies is not far off the mark.

The demographic changes pose significant demands on society, which must adapt to the new reality of fewer newborns and more elderly. In the podcast “Genstart” on March 26, 2024, the topic was highlighted under the title ‘Babydoom.’ The description of the topic states: ‘The eternal fear of overpopulation is nearing its climax and is replaced by a fear with the opposite sign: Will we become far too few, far too quickly? From politicians in much of the world, the message is now clear: We need to have more children. But history has shown that while countries are good at limiting reproduction, no one has yet found the recipe for the opposite: To recreate citizens’ desire to have children.


The complexity is great

Denmark is by no means alone in facing challenges with significant shifts in population composition. But what is the explanation? In Japan and China, there has been strict political control to limit population growth, while in Europe and Denmark, it has mostly been about encouraging increases. So where has the chain fallen off?

Researchers point out that the reasons for the low birth rate are complex and can include personal choices, socioeconomic factors, and biological challenges, as well as society’s general values and attitudes toward family and career playing a significant role. Additionally, legislation in the area is crucial – with fertility treatment, parental leave, child benefits, etc., being central elements. An increased number of singles and growing pressure on women to find the ‘perfect’ partner can also lead many to postpone having children in the hope of finding the right one. Career ambitions and the desire for material goods also seem to weigh heavier for many, often resulting in people delaying having children until later in life. This leads to more people experiencing fertility problems when they finally wish to start a family. Additionally, a report from the Rockwool Foundation indicates that fertility in the past 20 years seems to be improving, but the declining birth rate is due to more women not wanting to have children.


Long-term consequences for society

A low birth rate has extensive consequences for the future welfare society. Without a significant change, society will face an aging population and a reduced workforce, placing great demands on social and economic structures. If this negative trend continues, it means fewer people will be available to contribute economically through taxes and duties, while the need for care and support for the elderly increases. This can lead to a situation where the welfare system becomes overloaded and unable to provide the necessary services.


To address these challenges, several solutions must be put into play:


  • Increased labor immigration: Attracting skilled labor from abroad can help alleviate the labor shortage. However, this requires comprehensive integration policies and support for newcomers so they can quickly contribute to society.
  • Automation and technology: Investing in technology and automation can help maintain productivity even with fewer working hands. Robotics and AI can take over in many areas, but this also requires investment in education and upskilling of the current workforce.
  • Improvement of birth rates: Although not a quick fix, long-term initiatives to make it easier and more attractive to have children will be necessary. This includes financial incentives, better parental leave and childcare arrangements, and a cultural shift regarding the perception of family and career.
  • Changes in welfare structure: If birth rates cannot be raised to the necessary level, it may be necessary to reform the welfare state. This could include raising retirement ages, changes in healthcare financing, and a greater degree of private participation in welfare services.


Impact on products and services

The declining fertility, both globally and in Denmark, has far-reaching consequences, not only for societal structures but also for industries that sell clothing, shoes, and equipment for babies and children. With fewer births, these markets may experience a significant decline in demand, forcing companies to adapt to the new demographic realities. One of the most immediate consequences is the reduced demand for products aimed at newborns and toddlers. Fewer births mean parents will buy fewer strollers, baby clothes, and other necessary equipment. This can result in sharper competition among manufacturers and retailers, who will fight over a smaller customer base. To survive, companies may need to differentiate themselves through unique products, higher quality, or better customer service.


Innovation, diversification, and export

Companies in the children’s clothing and equipment industry may be forced to innovate and diversify their product offerings. This could mean a move towards products with longer lifespans that can be used over extended periods, appealing to parents seeking value for money. Additionally, companies might begin focusing more on sustainable and environmentally friendly products, reflecting the changing values of the modern consumer.

Another strategy could be to shift focus to older children and teenagers. With a smaller proportion of young children, companies may find new growth areas by offering products and services for older children, which might require more advanced technology, fashion, or sports equipment. This shift could also include a focus on educational products that support children’s learning and development.

Globally, regions with higher birth rates will become even more important markets for manufacturers of baby and children’s equipment. Companies can increase their efforts to export to countries with growing populations, where demand remains high. This may require investments in international marketing, distribution, and adapting products to different cultural environments.

The declining fertility challenges the children’s clothing and equipment industry to think creatively and adapt to a new reality with lower demand. Through innovation, diversification, and focus on digital solutions, companies can find new opportunities for growth and success. At the same time, they must be aware of global market dynamics and adjust their strategies to changing demographic and cultural conditions.


Case: Creating growth yourself

At the New Retail Day conference in April 2024, CEO Kenneth Nørgaard gave a presentation titled ‘When You Have to Create Growth Yourself,’ referring to the declining birth rates. The market for baby equipment in Denmark is heavily dependent on new babies being born. Unfortunately, the outlook is bleak. Over the past eight years, the market has only seen an annual growth rate (CAGR) of 0.1 percent. During the same period, both Danish and foreign webshops have emerged, trying to capture market shares. The young target group also has a high tendency to buy used, further reducing growth in sales of new products. Thus, competition has increased significantly in a market with limited or no structural growth. BabySam focuses on Denmark’s smallest target group: first-time parents aged 27-32. There are about 185,000 in this group, with approximately 5,000 new additions each month and a similar number dropping out. This group is highly digital and makes significant investments in equipment in a short time, meaning that 75 percent of revenue comes from products for children aged 0-2 years. To meet their needs, BabySam emphasizes safety and quality, offering personal advice and competitive prices.