The following post was previously published in an earlier edition of Marketing Insider.
marketers’ obsession with millennials makes less sense with each passing year.
According to the Bureau of Labor Statistics, there are 7.7 million more households headed by persons age 50+ (HH50+) than are headed by younger people (HH<50), 68.9 million vs. 61.1 million.
This imbalance has pushed the average age of U.S. heads of households from 48.8 ten years ago to 50.9 years now, and it has resulted in HH50+ spending more than HH<50 on consumer goods and services annually.
In the latest U.S. Consumer Expenditure Survey, HH50+ were responsible for 52% of all 2017 consumer expenditures. This is NOT an anomaly. HH50+ have been responsible for more than half of all consumer spending four years running.
The survey provides a wealth of evidence why 50+ has become a critical consumer segment. The data speaks for itself. Check out these ten
1. Consumer spending. In the last decade, the share of total
consumer spending among HH50+ has risen from 44% to 52%.
2. Spending momentum. HH50+ spend at nearly the same rate as HH<50, $59,236 per household versus $60,984, respectively. (So much for the myth that spending diminishes considerably after age 50.)
3. Spending gap. HH50+ spent $350 billion more than HH<50 in 2017. That gap is is four times what it was just two years ago, $92 billion.
4. National ramifications. HH50+ have a significant impact on the U.S. economy. From 2016 to 2017, 69% of the growth in total consumer spending was due to purchases made by HH50+.
5. Household income. HH50+ generate $67 billion more income annually than HH<50.
6. Accumulated wealth. In the past year, the net worth of HH50+ grew nearly three times faster than it did for HH<50 (up $20k vs $7.4k). As a result of the net worth growth among HH50+, 75% of the annual growth in U.S. household net worth is attributable to HH50+.
7. Category relevance. HH50+ dominate spending in several key categories, including life and other personal insurance (67% share of market), healthcare (65%), and new cars/trucks (54%). HH50+ also dominate spending in more surprising categories, including entertainment (53%) and personal care (51%)
8. Home ownership. HH50+ are more likely than HH<50 to own homes (77% vs. 47%) and less likely to carry a mortgage (45% vs. 79%), which frees up money to spend on a wide variety of home-related categories.
9. Home spending. HH50+ are responsible for more than half of all spending on pets (61%), household supplies (60%), vehicle repairs (60%), small appliances (58%), auto insurance (58%), major appliances (56%), audio/visual equipment/services (55%), household furnishings/equipment (54%), and food eaten at home (53%).
10. Population growth. Based on government population projections, HH50+ will grow at roughly twice the rate as HH<50 over the next five years, all but ensuring the continued spending dominance of HH50+.
Tell me again why millennials are the Holy Grail for marketers?
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