KEY TAKEAWAY: Older consumers, who hold trillions of dollars in spending power and make up a growing portion of the global population are often ignored by advertisers and it’s costing them.
Boomers
Baby Boomers—Americans born between 1946 and 1964—number 80 million, and have long been the most marketing-friendly consumers in the country’s history. Their sheer number has amplified their impact and transformed every product category they have embraced. Today, Boomers are rapidly growing out of the 18-49 cohort — long thought to be a sweet spot for marketers — but this generation is simply too big, valuable, and important for marketers to revert to the traditional “cut off” at age 49.
Marketers continue to prioritize youth despite Baby Boomers having a median income that’s more than twice as high as Millennials, a median net worth that’s more than 15 times higher, and an average monthly spend per household that’s more than 50% higher. What’s wrong with this picture?
Conventional wisdom says that Millennials (18-32 year olds) and Boomers (49-67 year olds) are more different than alike. But when it comes to shopping, exactly how wide is the generation gap? A new study of Millennial and Boomer purchasing trends conducted by Radius Global Market Research (Radius GMR) shows that while there are certainly differences, there are also some significant similarities between the two groups.
- The Internet is an everyday part of boomers’ and seniors’ lives; it is the top source for gathering information on topics of interest, outpacing TV and print media by a substantial margin. As an advertiser, it is critical to be present across many digital platforms in order to engage this audience. Online video, search, and social networks build upon each other.
Many of today’s marketers are beleaguered by the combined effect of elevated material costs and sagging recessionary demand. Technology is fragmenting media and the task of creating and delivering scaled messages is more complex than ever. At the same time, the lucrative Boomers are now exiting the 18-49 cohort with the same velocity that they entered it. 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. However the 50+ segment consists of close to 100 million consumers that control 70% of disposable income in the US.
Nielsen surveyed nearly 28,000 households between March 14, 2013, and May 6, 2013, and another 41,000 households between Nov. 14, 2013, and Jan. 16, 2014. Overall, rising food prices ranked No. 1 on our list of headwinds, as almost two-thirds of households (64%) said prices were a major factor limiting their spending in mid-2013, and more than half (52%) were still unhappy with prices in January 2014. In the face of headwinds, consumers responded with pragmatism, saying they made trade-offs or bought less. When it came to coping with headwinds, consumers said they tightened their belts across the board except when asked about responding to rising gas and food prices. Notably, 75 percent of respondents said higher fuel prices caused them to make fewer trips, whereas more expensive food prompted 65 percent to seek out better deals.