Posts Tagged ‘Baby Boomers’
The Baby Boom Generation collectively still has its hands on the lion’s share of disposable income in 2015, and this isn’t likely to change for a number of years even as they pass business and social leadership batons to Generation X.
So as a marketing manager or small businessperson, what can you sell as a product or provide as a service that would solve Boomer consumer problems or scratch their adventurous “I’m really still 25” itch?
Lots of research (just do a search online) can help guide you, but watch out for conflicting results, and draw your own conclusion rather than rely on the opinions of others, especially if you have a concentrated geographic target market with particular demographic profiles.
Fidelity has just issued a report that purports to bust some generally held assumptions about what drives Boomers into retirement, and how ready for it they truly are financially.
The upshot is that Boomers are a varied collection of people. They share similar challenges that come with age, but are diverse in their interests, and in the resources they can bring to bear to address the challenges. Read the rest of this entry »
The first survey is in, from research company Ipsos, that finds the members of Generation X outnumbering Baby Boomers among the 23% of the U.S. population Ipsos calls “Affluent.”*
- 37% of Affluents are Gen Xers (aged 34-50)
- 33% are Baby Boomers (aged 51-69)
- 25% are Millennials (18-33)
- 5% are Seniors (70+).
Net worth naturally lags income in shifting generations, so Seniors and Baby Boomers still hold the wealth, but Gen Xers are the children of Seniors, so that wealth may fall to them over the next ten years.
|American Affluents by Generation (At Least $100K HH Income)|
|Share of Affluent Population||Median Self-Reported Annual Net Worth|
|Baby Boomers (51-69)||
|Source: Ipsos, September 2015|
What does this mean for a company seeking affluent customers or clients? It may mean a shift in emphasis away from conspicuous consumption and “not acting their age” (Baby Boomer characteristics). Generation X is broadly more practical, skeptical and financially more conservative than Baby Boomers. They also bridge the gaps in habits, attitude and technological savvy between Baby Boomers and the Boomers’ Millennial children.
Also, by paying attention to Generation X explicitly in your marketing, you may actually surprise them and earn their loyalty (as far as this generation gives its loyalty!) This generation is a lost generation among marketers, with the spotlight (and dollar spend) moving directly from Boomers to Millennials.
For more on the mindsets and motivations of Generation Xers, read this article on their leadership styles to get a sense for how to talk to this underappreciated population cohort.
*To be affluent in Ipsos’ eyes, your household income must be at least $100,000. This is certainly arbitrary: That income for an urban New Yorker or San Franciscan would make them solidly middle class, but not affluent. In other parts of the country, $100,000 supports a better lifestyle.
I found this lovely quote in a recent article on MediaPost’s Boomer Blog:
“Let’s not forget that boomers account for nearly $230 billion in sales for consumer packaged good; they control nearly 70 percent of the nation’s disposal income and they stand to inherit $15 trillion in the next 20 years.”
If you want to focus your marketing on the people who can buy your product or service today, rather than in 20 years when they have serious money in their pockets (hello, Millennials), focus on Boomers as your most profitable consumer pool.
And they still listen to radio, because that was the new thing when they (including me) were young, and habits are hard to break unless you give us a really good reason to change. We still have that habit. Research would probably support the idea that Boomers are keeping AM/FM radio on the air, as younger generations move to more personalized audio sources.
That trend is affecting Boomers, too, of course. We like nothing better than to act young and adopt the latest trendy gizmo. But as we have aged, we do that less. So we will be listening to the radio a lot once we retire and start spending our inherited loot.
So think about Boomers, and think “radio” if that market segment makes sense and your product lends itself to a broad audience rather than a niche.
I focus a lot of client attention on Baby Boomers, because they have the disposible income today, and are still freer spenders than the generations that are succeeding them. If you have a need to make money today, you must focus on those people who have it.
Millennials do not yet have gobs of money to spend, so all the attention paid to them as “the coming thing” is still a bet on the future.
However, it pays to understand the radical differences between generations if you have a product or service that all of them could buy.
So this article by Samantha Sharf on Forbes.com is a useful read, because it nails down what may be an enduring characteristic of Generation Y that anyone selling product over the next decade should keep top-of-mind:
Millennials have been tempered by the Great Recession, and may very well keep that sense of economic “fear” with them all their lives. Whereas Baby Boomers are inveterately optimisitic about the future because their formative years were free of significant economic malaises (Mid-70’s oil shocks being the only significant events), Millennials share with the Greatest Generation the idea that our economic house of cards cannot be entirely trusted.
Millennials are giving indications that they are going to be better savers of money than Baby Boomers, and a bit more risk-averse than Generation X.
This generation will remain less loyal to brands than older generations (partly because there is so much more choice, and information about those choices, instantly available to them through their web of connectivity.)
They will retain a need to have their lives and work tied to a meaningful cause. Intrinsic value of the work being done will matter more to them. Caveat here: Baby Boomers started out with this mindset, too, and it faded as the need to make money and raise families became paramount. So this need for meaninfulness could weaken with Millennials as well.
Ms. Sharf’s article is focused on how to make financial advisory services relevant and accessible to Millennials, who will have wealth to invest sooner in their lives than Baby Boomers did. How can your product or service relate to these emerging Millennial consumer characteristics?
- How does your value proposition help save the world? By this I don’t mean you have to cure cancer of resolve international conflicts, but do you work to save resources, keep carbon out of the air, be a good steward of your environment? Emphasize how you do that in your outreach.
- How practical are you? Why should your brand stay on their radar? What need do you solve for them that proves your worth? Spend less time simply establishing your brand, and relatively more on proving its worth with stories from your actual marketplace.
- How can you help them achieve their balance of social good and personal security? If they are less grandly aspirational than preceeding generations, reflect than sense of future ansgt in your messaging.
Because of their enforced tempering by the Great Recession, Millennials are indeed going to act much more like their grandparents than their parents in the marketplace. This is a characteristic that we all need to track closely as they fully mature into a consumer group with their own resources over the next decade.
As we get into the holiday season, retailers and other B2C companies are gearing up to grab their share of the discretionary spending that washes through our economy between now and early January. (And this year looks to be a decent year for spending!)
And who has the most money to spend discretionarily? Baby Boomers! Here are some data points I keep handy when talking about with clients about whom to target:
Consumers ages 47 – 66 (Baby Boomers) Facts:
- Dominate 119 out of 123 CPG categories
- 40% of customers paying for wireless service
- 41% own Apple computers
- 53% are on Facebook
- 40% most likely to use an iPhone
- Over age 50 spend $7 billion online annually
- Purchase 62.5% of new cars
- Purchase 80% of luxury travel
- 70% show up to vote in elections
- Boomers spend more money each month on technology than Gen X or Gen Y – an average of $650 per month
- Spend most on health care
- Spend most on pharmaceuticals
- One in 7 boomers care for a parent or family member
- 71% of Boomers go online every day
- 66% of Boomers send text messages
Find more on this data on MediaPost.
For the holidays in particular, the key point to factor into your holiday promotions is “Gifts for Baby Boomer Grandchildren”. Talk about a source of discretionary spending!
“The new crop of baby boomer grandparents is also doing more with, and for, their grandchildren, opening up their purses and wallets, and spending a collective total of $35 billion a year on their grandkids. On average, they spend $500 a year on grandchildren, up from $320 in 1992.” (ABC News)
Do you think such sums of money are a worthwhile target for your business? If so, inject some messaging in your marketing that makes clear that your offerings solve the ‘gifts for grandkids challenge’ for Baby Boomer grandparents:
- Educate them on the latest trends for each age group, which allows them to look savvy without having to ask. This is particularly true for Baby Boomers, who really do want to appear “with it.”
- Suggest which products or services fit a typical gift budget of $25-$100.
- If appropriate, position your product or service as having educational or developmental value for young people, which could allow the grandparent to feel they are materially contributing to the positive development of the child. This is more appropriate for Boomers with younger grandchildren, but could provide a supporting message for tech products for teenaged grandchildren.
In sum, be there to help, and to make them look good/with-it/smart while expressing their love through gifts.
When my wife first came to the U.S. from Ukraine in the late ’90s, one of the first purchases she made was a curling iron at a local pharmacy. She remembers being stunned by the challenge of choosing among ten different brands for this basic consumer item. Frankly, she was not pleased that the store made her do all the work. Why, she wondered, didn’t the store do more to winnow down the selection on her behalf?
From my native American perspective, consumer choice is good, but I saw her point: The store could have cut the options to five, say, and still have presented a sufficient range to satisfy most customers.
Today, that winnowing process is measurably more apparent. After years of expanding store sizes and stuffing shelves with “choice,” retailers are starting to reaccept some researching and winnowing responsibility in the face of demands from older generations, who apparently don’t want to wrestle with huge stores and extensive selections anymore.
A recent post on a Boomer Blog I follow explored this trend towards smaller stores that offer fewer choices while still emphasizing quality at a fair price. Older consumers seem to be voting with their dollars in support of this, as it meets their needs for less physically demanding spaces that don’t require lots of walking.
Oh, my aching knees!
Why is this important to all marketers? Because Boomers are retiring, and they will start demanding (as usual) that we accommodate their growing infirmities! They, and their parents, are moving their business to concepts like Tesco’s Fresh and Easy: Smaller stores with less broad selection, but enough choice to satisfy shoppers who trust that the retailer’s buyers keep the customers’ needs in mind.
Much as a newspaper editor selects which news goes to his or her readers, so stores are renewing their ability to add value by screening the hoards of available products more finely, and leaving less work for the customer in the aisle.
Retail shops may start emulating the online marketing experience.
If this trend plays out fully, we may even return to the general store concept, where you walk in with your list and a counter clerk does all the walking around to fill your order. Of course, the “clerk” may be a kiosk rather than a person — and that kiosk might have a chair in front of it. At that point your bricks and mortar store experience will feel just like your online shopping experience, an ironically full turn back to the “future!”
Saturday Night Live Producer Lorne Michaels has a well-earned reputation for staying relevant. He has kept his show on the air for close to 40 years by moving with his market. Staying “plugged in,” in effect.
So it makes complete sense that he currently keeps it “up to date” by going back in time: Boomer celebrities feature heavily in his line-up, and it is clear that Boomers are the viewers he seeks, now that you don’t have to stay up past midnight to watch, with shows available 24/7 in various ways.
It’s a good media play, as many of these Boomer icons (Elton John, Steve Tyler, even SNL graduates like Dana Carvey) also have contemporary or retro appeal to younger generations who actually stay up to watch it live. The focus, though, is clearly on getting Boomers back to watching the show, because that is where the money is for advertisers.
Michaels isn’t alone, either. The entire marketing profession is waking up to the fact that their rote system of focusing attention and budgets on the 18-45 age bracket is out of date. It was built by Boomers to talk to themselves (something they still do, but that’s another story.) Now the Boomers have moved out of that bracket, and have taken their money with them.
It took a while, because the marketing business is filled with young people, but the payers of the bills (their clients) have finally pushed enough to break the young, hip, tech-savvy focus back to “who has the money?”
That would be Boomers. Still our largest generation. Still our richest generation, and still not saving any of that money for retirement. Which is good for people who try to sell them stuff, if not the Boomers themselves!
Find more at the Engage: Boomers blog on MediaPost.
Wouldn’t you know it? Snipping over arcane details is not confined to politicians in Washington or your local state capitol. People in the marketing profession can’t agree on exactly how to define our major American demographic generational segments. Not that it makes a huge difference to marketing planning if you are careful, but your choice of consumer database vendor does carry some risk of shifting your target market demographics at the edges. This has an impact, not least on measuring the potential size of your audience (and therefore your potential return on investment.)
To quote Dan Coates, President of YPulse, who wrote about this issue recently:
“Unfortunately, mapping out the size of each generation isn’t as straightforward as it should be. As you look up Generation Y on the web, some of the first words you’ll read are: “There is no consensus over the exact birth dates that define Gen Y, also known by some as echo boomers and Millennials.””
This disagreement on how to size this key consumer segment, or even what to call “Gen Y,” extends to the research sources you may reach out to. Click here for an example of how two sources disagree on how to define American generations.
The lesson: Make your own definitions of your target market free of demographic labeling straightjackets, and then go find out how to reach them. Once you can clearly describe who you want, any vendor worth paying is going to be able to sort through the industry shorthand labels and find you what you seek.
Market research can clarify the consumer world for marketers, yet obfuscate it at the same time. The best approach is often to troll through research results looking for correlations.
So it is with two items I saw today:
For Retail, Social Media doesn’t work
Gen X, Gen Y rely on research, less on loyalty
The first article clearly had an arresting headline for marketers: What??? Social media, our favorite obsession, doesn’t work?
The truth within the numbers reported by market research company ForSee Results was more nuanced: Social media was cited by only 5% of respondents as the primary influence in their buying decision-making. E-mail, on the other hand, drove the actions of 19%. This was in a survey of 10,000 people, so this result has to be taken seriously, but also with the usual grain of salt. Let’s look at the overall summary:
- 38% cited brand familiarity as their dominant influencer
- 19% cited promotional e-mails
- 8% – Search engine results
- 8% – Ads
- 8% – Word of Mouth
- 5% – Social media
- 4% – Shopping/product review sites
- 3% – Blogs
The dramatic conclusion that social media is “less effective” is a decent conclusion, but not a damning one: All aspects of marketing influence the consumer, and their primary motivator is usually just the final motivator. Social media is closer to advertising (or more accurately, PR) in its benefits for a marketer, and less likely to drive immediate action. E-mail, on the other hand, is much more of a lead generation activity. So, these results make sense seen that way.
ForSee is measuring a reasonable reality: Consumers are in love with social media for its social power, connecting with friends and family. They still don’t see it as a primary channel for communicating with companies. And may never admit it. However, for retailers “being there” is still additive to their marketing mix, as long as they stay consistent and track results closely.
Now, if you add the results of the smaller study from “Gen X, Gen Y rely on research,” you see a fuller picture: Younger generations are less loyal, says the report (so chipping away at that 38% figure led by branding cited above.) And they use product/shopping/consumer review sites, and internet search in general, to do that research. To quote from the article:
“Forty-three percent of respondents polled by the study said they do some type of research before they buy.”
“Ninety-four percent of consumers said online research positively influenced their decision to make a purchase, and nearly four in ten said they bought a product because of the research they found.”
Compare this to ForSee’s results, where research of all sorts was cited by only about 15% as their primary influencer.
(Marketers need to combine research to round out their understanding.)
Social media has a way to go in becoming a primary influencer in driving consumer behavior, but it has a role to play, and smart marketers will continue to test its potential as one part of their total marketing mix.
…But their lead is shrinking. The Pew Center has released their latest survey results on who uses what media channel to communicate or otherwise interact with the rest of the world, and there are no surprises.
It still makes interesting reading for those with any interest in delivering product/services messages to each generation.
I found it interesting, for example, that social networks are fulfilling the need to share that personal blogs have fulfilled, so the “personal blog” is declining among younger generations even as it still grows in older generations.
Will social networks successfully woo businesses in the same direction? The product/corporate blog is still a growing mainstay of consumer outreach, but Facebook and others are making a big push to position themselves as the place to be for community interaction.
For now, most corporate Facebook pages are echoes of their blogs (as is corporate Twitter use to a large extent.) As capabilities for sharing content improve on social networks, however, the website-base blog may begin to cede conversational “position” to the network channels (SEO needs aside).
Here is a link to the full survey summary.