A new report by Nielsen, the “Most Valuable Generation,” in collaboration with BoomAgers, shows that in five years, 50% of the U.S. population will be 50+. These consumers spend close to 50% of all CPG dollars yet less than 5% of advertising is geared towards them. These high potential consumers have been largely unaddressed by marketers and advertisers since they started to age out of the popular 18-49 cohort.
In the next five years, Boomers, born between 1946 and 1964, are set to control 70% of the disposable income in the U.S., and they stand to inherit $15 trillion in the next 20 years. As they age out of the work force, 67% of Boomers plan to spend more time on their hobbies and interests, moving from a life of making money to one that is spending money.
Taking their loyalty for granted, or forsaking them for being too loyal or set in their ways, are both risky approaches for marketers, opines the report.
The temptation of conventional marketing is to follow a traditional bias, notes the report. Typically, once a group of consumers reaches the so-called “cut-off” age of 49, marketers “go back to go”. They renew their focus on a new crop of 18-49’s and they start all over again. The goal is to build a fresh group of life-time loyalists and the strategy begins with an investment in penetration.
Marketing to youth is traditional marketing wisdom because of the enormous results that the 18-49 demographic has delivered in the past, a time when it was comprised of an unprecedented 80 million, marketing friendly Boomers. But now, the 50+ segment consists of close to 100 million consumers. Between now and 2030, the 18-49 segment is expected to grow +12%, while the 50+ segment will expand +34%.
63% of Boomers still have at least one person in the household working full time. Boomers make the most money and they spend what they make. Boomers account for:
Boomers’ brand loyalty levels are the same as other age groups. Boomers are no more likely to compare prices or use coupons than other consumers. Boomers’ brand loyalty is influenced more by household size/need than predisposition. This is evidenced by the fact that they are more brand loyal in categories that are likely to have different brands for different household members.
Internet users over the age of 50 are driving the growth of social networking as their usage of the social net has nearly doubled to 42% in the past year. 53% of Boomers are on Facebook.
They are also prolific online shoppers. A third of them shop online and the 50+ segment spends almost $7 billion when there. The Internet is their primary source of intelligence when comparison shopping for major purchases (e.g. cars or home furnishings). 42% of all travel is purchased online, and Boomers represent upwards of 80% of all premium travel.
Boomers are the most valuable generation in the history of marketing and they are too valuable to ignore, concludes the report. The numbers on Boomers are big, and they add up to something that is very compelling. The authors suggest that if they’re loyal consumers, do your best to keep them. If not, figure out a way to win them over before your competition does.
The complete report in PDF format is an interesting and valuable treatise, and can be accessed here.