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Perspectives

Grasping and Tapping the Vast Aging Boomer Opportunity

2016-12-07


Consumer-facing companies are wise to learn about baby boomers’ needs, attitudes and behaviors in order to best cater to this flourishing and wealthy generation.

Consumer goods companies should consider recalibrating their marketing priorities, and place at least equal emphasis on attracting and retaining baby boomers as they do on millennials. While millennials — the largest-ever cohort of the 18-34 demographic — are important, we would argue that baby boomers — the 50-70 demographic — are equally so, due to their number, wealth, longevity, evolving spending patterns and ongoing search for meaning through lifestyle choices and acquisitions (homes, cars, etc.). 

The boomers’ “second coming of age” offers an enormous commercial opportunity for smart companies to capitalize on by creating and catering to new behaviors associated with entering later life — empty nesting, retirement and aging. Facing new challenges, fears and freedoms never experienced before in their lives, boomers are reconsidering the kinds of purchases they want to make and rethinking how they spend their time. Those behaviors require new models of marketing and thinking about approaching boomers, especially as they engage increasingly with technology at every step.

  • Huge marketing prospects, oddly neglected: Boomers — the generation born between 1946 and 1964, and once the largest generation on earth, with about 76 million people in the U.S. alone — are the wealthiest generation in history, owning roughly 70% of the wealth in the U.S. Not surprisingly, they spend more than any other demographic in an astonishing 94% of consumer goods categories, accounting for 50% of all dollars spent on consumer goods in the U.S. And they’re set to inherit $15 trillion in the next 20 years. Though the savings of many were hurt by the financial crisis — and many now plan to work past the age of retirement — they maintain a vast amount of wealth in their homes and savings. 

    Yet marketers have nearly entirely overlooked them. The only exception is when marketers focus on age-oriented products: incontinence treatments, emergency devices, anti-aging cream, Viagra, etc. Most companies have dismissed baby boomers as an unattractive demographic with little potential upside. Instead, capturing the youthful demographic has been marketing’s Holy Grail. 

  • A golden cohort for marketers: Our many studies into boomers’ lives, aspirations and behaviors show that reaching middle age and later life is inducing this generation to take stock of their lives, leading to major purchases and new lifestyles that they then stick with. Their willingness to reshape their lives and reinvent themselves makes them ideal target consumers for many industries, from automotive to consumer goods and wellness. The changes they make are not short-lived trends, but stable shifts, grounded in the way that boomers have grown up and aged, as well as how they see themselves and their roles today. When we combine boomers’ wealth and their willingness to reinvent themselves in older age, it’s easy to see how we should focus on the aging boom. 

Figure 1

  • Breaking the mold: Prevailing wisdom holds that spending patterns are relatively static after youth, but boomers now are at an interesting juncture where a time of great change (positive and negative) upends that pattern. As they reach older age, boomers are reassessing, resizing and reshaping their lives — and that means major purchases and new directions for their consumption in later life.

  • A techno-savvy generation: Contrary to popular stereotypes of boomers as technophobes, they are avid tech users, spending more time on technology than any other generation, and accounting for roughly one-third of all online and social media share. And technology is increasingly a part of their sense of self: They associate technology with freedom more than any other generation.

  • Interplay between digital and analog: Boomers weigh digital and analog relationships with retailers in different ways than other generations, especially millennials. One key finding is that they still value human service in addition to digital offerings. Boomers will happily spend hours researching online before making a purchase, but they are likely to turn to a physical store to seal the deal or learn more.

Take Action

Our research has identified the following key steps you can take to better target boomers and help them tackle later life head on: 

Create offerings that help baby boomers live out their dreams.

Such offerings will not only include more customizable, premium products, but will come with thorough service that helps boomers define and actualize their dream. 

Develop total offerings that help baby boomers take on change.

Companies can take full advantage of the second coming of age by developing total offerings that connect several products, services and related experiences targeted to help boomers adjust to later life or build and sustain their new behaviors, such as healthier eating, more exercise and hobbies. 

Create worlds around your offerings that keep boomers active and social. 

Creating in-person meet-ups, online discussions and interactive tools around your organization’s offerings gives boomers a forum to deepen their interests, meet people who share them, and feel relevant and social — which will lead to deeper engagement with your products.

Understand the interplay between baby boomers’ digital and analog lives.

Boomers are steeped in technology, but also appreciate the human touch of customer service. And with many of their behaviors, preferences and past purchases coming from the pre-digital era, companies need a deeper understanding of the way boomers operate in both the digital and analog worlds. 

Rethink your organization to more effectively target baby boomers.

Developing a unit or line of offerings focused on baby boomers — with at least some staff who are boomers themselves — will force your organization to take understanding boomers seriously, and enable the development of more detailed segmentations and relevant offerings.

This article was written by Filip Lau, Co-Founder and Partner of ReD Associates in Copenhagen, and Lester Lam, Vice President and Global Leader for Cognizant Digital Works Strategy Consulting.

To learn more, read our white paper “The Second Coming of Age” or visit Cognizant Digital Works or our partner, ReD Associates. 

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Grasping and Tapping the Vast Aging Boomer Opportunity