As everyone knows, no one likes to be ignored. Yet, many companies are doing just that to a huge demographic – the Baby Boomers – that still has a lot of buying power. For the last decade, marketers have been focused on the “it” demos: millennials and Gen Z. Although millennials officially outnumber boomers, we shouldn’t forget the spending power wielded by boomers.
While millennials have dominated headlines in recent years, baby boomers (those born between 1946 and 1964) have continued to dominate consumer spending in the U.S. In fact, consumers over 50 now account for more than half of all U.S. spending. They are also responsible for more spending growth over the past decade than any other generation, including the coveted millennials.
As a group, this over-50 crowd should continue to be a major force in U.S. consumer spending, especially as those over 60 years old drive growth over the next five to 10 years, according to Visa Business and Economic Insights.
This is happening for two reasons: demographics—there are simply more consumers over 60 than there were 10 years ago—and behavior. Baby boomers, compared to generations that preceded them, are retiring later, holding on to more debt, and maintaining budgets for travel and other discretionary treats.
Today’s baby boomers are some of the most technologically sophisticated and active groups in the world. They are traveling, spending time outdoors, going back to school, starting second and third careers, caring for grandchildren and parents, all the while staying relevant in politics, social media, and cultural changes. You want some proof of the baby boomers buying power? According to U.S. News & World Report, this demographic controls 70% of the country’s disposable income and spend $3.2 trillion a year.
Baby Boomers include the likes of George Clooney, Julianne Moore, Tom Cruise, Robert Downey, Jr., Lenny Kravitz, LL Cool J, Nicole Kidman, Brad Pitt, Barack Obama, Oprah, Deepak Chopra and Madonna. I don’t think anyone would suggest that these folks should be ignored, yet many are ignoring their entire generation.
Millennials and the Gen Z may have some money to spend now — but Baby Boomers have it yesterday, today and tomorrow. Their WWI generation parents are leaving them even more wealth, and they are ready to enjoy it by purchasing new homes, cars, boats, and other luxury goods they may have postponed purchasing while they were putting kids through college. Targeting boomers might not be as Instagram able as a millennial demo, but it is instantly gratifying.
Robert Passikoff, president of Brand Keys Inc., told the New York Times that “while the millennials are sharing stuff, boomers are buying stuff. If you are a brand, you are in business to make money, and a tweet or share or laugh online doesn’t translate into actual bottom-line dollars. Boomers are an audience that’s worth pursuing in virtually every category.”
Brands should target boomers by using an integrated media mix that includes radio, TV, email, and social media. According to Nielsen, baby boomers are the second heaviest users of the internet and more than half of boomers are active on Facebook. They also are a growing demographic on Instagram, and they are still one of the last demos that can be reached using direct mail and email marketing. Nielsen also found that “Boomers account for nearly $230 billion in sales for consumer-packaged goods.” The demo also spends close to $7 billion shopping ONLINE.
By 2020, there will be about 11 million1 more consumers over age 60. While the share of spending among younger consumers is expected to decline over the next 10 years, older boomers should gradually spend more with those aged 60+ reaching a 33 percent share of aggregate spending by 2025.
Industry forecasts show that Gen X and millennials will continue to be important consumer targets—as much for their current spending as for their longer-term loyalty—but the strongest future growth potential in spending lies firmly with baby boomers.
How and where are you targeting boomers?