The young versus their older counterparts is a tale as old as time. But the balance is changing with a Boomer generation practicing wellness and experiencing longevity (the pandemic notwithstanding). So, who are the real market drivers today? Next-gens were the driving force before Covid. But now, as Gen Z and millennials race to find new career paths, mature consumers with money in the bank are undergoing a renaissance as a market power.
Before millennials were born, their Boomer parents, had the largest population numbers of any generation in history. Boomers may now have been eclipsed by next-gens in term of population size, but the older generation holds more than half of U.S. household wealth. Many are retired, so they are less heavily impacted by the tumultuous job market than their younger cohorts. And for those that haven’t retired? They aren’t going anywhere, and their incomes remain above average. Retirement is being redefined, and our workforce today has four generations working more or less side by side.
[callout]Marketers have always had a love affair with younger consumers, 18-34 years of age, but there is a subtle shift in the viability of that demographic. [/callout]
Boomer Spending Power
Aging consumers are playing an active role in the new retail landscape and are particularly relevant now that the market is ravaged by economic uncertainty. Marketers have always had a love affair with younger consumers, 18-34 years of age, but there is a subtle shift in the viability of that demographic. Older consumers’ finances are often more secure than next-gens –– who have less savings to draw upon in trying times and many still facing whopping student debt load. It’s no longer smart to simply discount Boomers, so let’s take a look at how they’re spending.
Factors that Influence Spending
Lockdown has had a different impact on different consumers. While some were laid off or had their hours reduced, others began working from home –– thereby eliminating many daily expenditures. Dining out was the highest spending category for Gen X and Boomers pre-pandemic. But where does that revenue go now that dining out is limited or no longer an option?
Millennials have long been the most impulsive spending generation. BizJournals reports that 82 percent of millennials buy a product the first time they see it if they really want it, and a 70 percent said they sometimes regret the purchases that they’ve made. However, the Covid-19 outbreak was a sharp kick in the derriere for those who postponed building up their nest eggs in favor of more immediate gratification. Millennials and Gen Z are now saving more than ever before in history. While this is fantastic for their personal finances, it also means that other generations are more likely to eclipse them in retail spending.
Companies are beginning to see a “Silver Surge” in spending from vaccinated Boomers. After a year in lockdown, Boomers have saved up their paychecks and are ready to check off those bucket list items. We’re talking cruises, travel around the world and dining out locally. Even cosmetics and apparel, which are traditionally low investment categories for Boomers, are expected to see a boost as newly vaccinated Boomers go out and live their dreams.
Social Activism Is Hit or Miss
We often discuss how Millennials and Gen Z demand a strong stance on social issues and measurable action from the companies they patronize. So, what about their predecessors? A brand’s affiliations may attract or repel Boomers, depending on the message. eMarketer reports that Boomers are less engaged by brands’ social activism than younger consumers. However, “the specifics of the cause are crucial. For instance, ‘Black Lives Matter’ as a principle has strong support among Boomers, but a specific proposal like ‘defund the police’ does not.”
Boomers have more trust in the system than younger generations and they tend to be less radical. For this reason, brands that are targeting mature consumers as well as next gens may want to segment their ads that speak to social justice issues –– relegating the more extreme messages for their younger customer base. But general demographic research doesn’t take the into account social leanings of any brand’s individual following. So, a deeper data dive may be necessary for brands for whom social justice is a core part of their mission statement.
Digital Usage Accelerates
Millennial purchasing behavior is still more highly influenced by digital media than older generations, but Boomers quickly closed that gap during lockdown. In May of 2020, 47 percent of Boomers had increased their digital spend since the start of the pandemic. Boomers also spent 30 percent more time in their most-used apps last year than they had the year prior. Despite this increased digital usage, however, Boomer online spend is still below the average across generations.
NRF reports that Boomers have shifted to online spending on personal care, pet supplies, clothing and groceries. More Boomers are buying mostly or entirely online as a direct result of Covid-19. Unvaccinated Boomers are still highly susceptible to the virus. BOPIS and grocery delivery have taken precedence for those that are, or still feel, unsafe in a traditional retail setting.
Boomers that are using digital channels want to see ads with images of people their own age that reflect their active lifestyles. They aren’t relegated to the hospital bed or doctor’s office, and ads targeting them shouldn’t be, either. The way we talk about Boomers is tone deaf at best, and it can be flat out offensive. It’s time that advertisers actually listened to this powerful customer base and began portraying them as they really are: out in the world, interfacing with their peers and family, and living their lives to the fullest.
The Way Forward
Boomers are poised to be the big movers and shakers of the post Covid-19 economy. Sure, white-collar millennials and Gen Zs who are living with their families to save cash will be incredibly relevant. Yet newly vaccinated Boomers have never had more motivation to pack all of the life experience they can get into every second. Retirement rates increased during the second half of 2020. Boomers now represent a demographic with the time and resources to make their bucket list dreams a reality.
Brands and retailers will overlook Boomers at their own peril. They need to figure out how to benefit from this powerful, driven customer base. Sourcing images that reflect their actual lifestyle and by manufacturing products that they can use to make their bucket list dreams a reality is a great place to start. Oh, and stop talking to them like their lives are already over… data shows that Boomers are just getting started.