Commentary
Misconceptions About Boomers May Impact Your Bottom Line
- by Sherry Smith , Columnist, May 16, 2016
It seems like every day brings a new article with dos and don’ts for marketing to Millennials. I get it – it’s a big demographic which, collectively, wields great buying power that will grow as they pay off their student loans and settle into careers. For many brands, the focus on establishing relationships with these consumers is driven by the goal of maintaining their loyalty in the future. As a strategy, it makes total sense, unless your youth-driven approach winds up alienating a customer segment whose discretionary budgets are sizable in the here and now: Baby Boomers.
Not every brand needs to specifically target boomers, of course, but it’s still probably not a good idea to completely turn them off. U.S. Census Bureau statistics show that Boomers are no longer the largest living generation. However, they are still widely considered the most valuable. Those born between 1946 and 1964 accounted for 70% of the disposable income in the United States in 2012, and they will continue to be the wealthiest generation in the country until at least 2030, when they are still projected to hold a 44.5% share of net household wealth. Adding to the clear proof of Boomers’ immense consumer power, they drive almost 50% of all retail sales whereas Millennials represent a mere 10%.
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Still, the AARP estimates less than 10% of marketing dollars are spent targeting them.
There are multiple issues driving this discrepancy, but one that’s fairly easy to correct lies in marketers’ incorrect assumptions about this population. Boomers are not your elderly grandparents. Prince was a baby boomer. So was David Bowie. Johnny Depp, Demi Moore, Madonna, Oprah … all baby boomers. Not a single, crotchety, old fogy among them.
Are you guilty of falsely stereotyping what could be a valuable and sizable customer segment? Here are a few of the most common misconceptions:
1. Baby boomers are not tech-savvy
Both Steve Jobs and Bill Gates were born in the boomer years, and their generation was the first to experience the massive productivity increases that technology can drive.
Baby boomers are just as tech-oriented as are younger generations. Eighty-two percent of Boomers use Facebook, with 15.5% spending more than 11 hours per week on the site. Boomer women are also one of the fastest-growing categories on Pinterest. They also spend more time consuming and sharing content online than do other demographics.
There are, of course, some differences of which marketers should be aware. For example, boomers are more likely to use tablets and PCs than they are smartphones, and mobile web more often than apps. They also consume content from magazine and newspaper websites more frequently than do younger generations.
Key Takeaways: Baby boomers are technology-friendly, yet are not as reliant on mobile phones and much less open to mobile advertising. They favor Facebook for social networking and are avid sharers of content.
2. Baby boomers are reluctant to spend money and want to downsize
The annual U.S. Consumer Expenditure Survey shows adults 55-64 consistently outspending the average consumer in nearly every category. In fact, if taken as their own economy, the 100 million Americans who are aged 50 and over would rank the third largest in the world behind the U.S. and China. Boomers account for nearly half of all consumer packaged goods sales and generate $7 trillion a year in goods and services.
Most boomers aren’t living the quiet retired life many envision, either. Sixty-three percent still
have at least one person in the household working full time. When it does come to retirement, however, two-thirds plan to spend more time doing things like shopping, traveling and entertaining.
The days of moving to a retirement community in Florida also seem to be behind us. A survey conducted by the Demand Institute revealed 63% of boomers plan on “aging in place,” meaning staying in the home they’re already in. They plan on spending within those homes.
Key takeaways: Boomers aren’t broke or stingy, in fact they’re the only consumer segment that has really made gains in real income since the 1970s. They’ve saved and invested for decades and are ready to spend on what they want after years of focusing on needs.
3. Baby boomers are old fashioned
While it’s true that people tend to get more conservative with age, boomers aren’t necessarily the pearl-clutchers many may think. They are, after all, the generation of Woodstock and “turn on, tune in and drop out.”
Nielsen’s 2012 study called Baby boomers “media-loving, eternally optimistic, self-indulgent consumers.” Now that they’re rid of burdens like college tuition, mortgages, and child care expenses, they're looking to re-tool themselves and re-define their lives. Now rid of debts and obligations, they have the means to do it.
Boomers also see no reason to let go of their sexuality. A National Council on Aging survey reported that 74% of the men and 70% of the women who have regular intercourse past the age of 60 are even more satisfied that they were in their 40s.
Key Takeaways: Boomers are making youthfulness and vitality a priority as they age, considering retirement a door that’s opening and not the end of their relevance.
As you can see, boomers are a huge segment of the population and very powerful part of our economy. For marketers, it’s important to recognize whether misconceptions about this group are negatively impacting their bottom lines. Boomers are, in fact, modern and tech savvy, and they’ve got more money to spend than any other demographic.
The reason why marketers spend so heavily on Millenials is because they haven't yet established brand loyalty. Boomers have to a very large degree. Their buying habits have largely been estaablished, and they much lesss likely to change or be changed.
When marketers look in their wallets and realize that money made off a sale to a Millennial spends just as nicely as sale made to a Boomer, this intergenerational angst can slow down a bit. The boomers are aged and failing as consumers, at precisely the same age as their parent's failed years ago. The boomers are an aged demographic that doesn't try new things or think through new ideas anymore, just as their parents were at the same age. The younger demographics of Gen X (the ones marketers never did figure out) and the Millennials are the only growth markets available. There won't be any new boomers in the world (big shock, I know) and they won't be getting richer or buying new things. Let the future in for a second and stop be spoiled old brats about what is inevitable. Develop a sense of dignity, if nothing else.
I am a boomer and I do not know if I should laugh or cry about the two previous comments. I have no idea what boomers you know but the ones I know are vibrant, interested participants of what is going on locally and globally. I for one (among many others) complain about the fact that it is difficult to find clothes, shoes or other apparel that I would like to wear and that isn't old fashioned or too youth orientated. I and many others are not always wedded to a brand however, if that brand provides the design, meets the need and the company provides excellent customer service, when needed then yes we will be following that brand. There really should not be a millenial vs boomer market mentality. We all need services and products perhaps some of the features might be different but it defintely is time for businesses to start considering the needs of the boomers and we all win in the marketplace.
Thank you for taking the time to comment. The point of this post on the "Engage: Boomers" blog is not to incite any inter-generational angst. I am simply pointing out that boomers are being ignored by advertisers/marketers, which can alienate them and drive away potential customers.
You are correct that there won't be any new boomers, but the idea that they won't be getting richer isn't necessarily so: The Nielsen report I mentioned projects that they will inherit an additional $13 trillion in the next 20 years.
I hope you will stay tuned for my next post, which will talk specifically about industries projected to benefit from boomer spending in the coming years.
Luisa, I'm on your team AND Sherry's team in terms of the spirit of the discussion. And what are these "old, brand-stubborn" boomers doing with smart phones anyway...shouldn't they be using
flip phones?
As 72-year-old “father of the Internet” Vint Cerf has been credited with saying about his peer group:
“We aren’t scared of technology. We invented it!”
A satire, obviously. Great.
Actually, boomers have been served since they were babies. Most items available are oriented to their buying power. It's the other market of those born after 1965 that has never been tapped. Ok, be vibrant, but if it isn't selling on my end, all I can do is say, "Go Girl, or whatever." Vibrant doesn't explain how and why to sell to boomers at all since their buying habits are very, very well developed at this point.
Hi Sherry, The boomers have already inherited the bulk of what they had coming to them, so I would not count on that little trickle left to do much good. The boomers inherited over 9 generation's of accumulated wealth, over 7/8ths of which has already been spent. Hopefully, those boomers still due to inherit have learned from those who have already spent whatever they had coming to them. The inheriting generation right now are the millennials who aren't in line to inherit much if current studies indicate the future. If those studies are correct, the Millennials won't inherit, they will earn, which I believe makes them a different kind of buyer -- a buyer who earned that dollar, not one who daddy-war-bucks sent a trust fund and who can afford get silly with the money. That's a different sale.
While there is nothing new in this piece, I applaud the iteration.
And ignore the first two comments.
Luisa, my answer to your question is do both. Laugh because of the incredible arrogance inherent in some of the statements posted that brook no debate---we are talking youth cult religion here.No other views are tolerated. Cry, because what was said probably reflects the opinions of many young people being "educated" at our colleges and universities these days.
What continually mystifies me is how an industry so wedded to target marketing can be so intellectually lazy by using such broad (20 year) periods to define "one" demographic. Born in 1955, those my age and younger were not drafted, few engaged in protests, and we share little with those born in the late 1940s. There should not be one Boomer demographic. The same goes for Millenials--those who grew up with teh Internet, and those who learned it as they grew. It's actually a weird bit of stereotyping.
Peter - here's an article that pretty clearly discusses the rhyme and reason around the division of generations: http://www.theatlantic.com/national/archive/2014/03/here-is-when-each-generation-begins-and-ends-according-to-facts/359589/
I'm really glad you're not my marketing guy Neil. Cause I've switched phone service, tv service, bought, for the first time ever, a car that was not Chevy, TV that was not Sony, Casual Chairs that were not La Z Boy (Very Boomer type brand) Food from Trader Joes and Natural Grocers.. NOT Safeway or Albertson's... do you see what I'm saying Neil? I'm 61. I try a lot of things. TV actually creates awareness that MAYBE there is something out there I may enjoy and by golly, I have the funds to go buy it. Unlike some of my Millenial friends who delay their gratification because they must SAVE UP. But you keep markeing away Neil. I probably won't see your advertisments anyway.
Wow.. and you are the ones helping to usher in this NEW age of marketing? I remember my 71 year old father in the late 90's sitting at his desktop trading stocks. Sorry, he must not have known what he was doing.
Lisa: Don't work yourself up. People like Anglyn more than likely have not owned/operated their own business. they talk like we did not work for anything we have. We were just given it. My bet? She is wearing a Feel The Bern shirt. Because she thinks what we earned was "Given To Us" she should get her fair share of free stuff too. (Seems I heard our President say we did not build anything, it's all been provided by the government) And enough of even discussing these boomers. They all gonna be dead soon, so let's hurry them up so us younger, smarter consumers are in charge. Lord help us. LOL
If Boomers aren't being addressed enough in ads, why is practically every tune playing in the background in most ads straight off their Top 40 playlist? It can't all be the result of expired copyrights.
Dear Michael Pursel, my business record is available, as are over 10 generations of my family history in business in US captialism if you are interested. I am quite experienced in running my own business over the past 15 years, even in rural start ups. No employer for over 15 years, thank you very much. Let me know when you are ready to make money in the Millennial's world. It seems the water is just right to me.
Exactly, diversify your appeal, diversify your customer. Millennial's money adds up just like the boomer's money does, at least on my spread sheet, lol.
Having been out removing trout for the last week, I need to say Ed.. I share your tears. Truth.