The Generations:
- Greatest Generation: born prior to 1946 (64 + years of age in 2009)
- Boomers: 1946 – 1964
- Generation X: 1965 – 1976
- Generation Y (Echo Boomers or Millennials): 1977-1994
- Generation Z: 1995-2012
Just back from presenting at the Aged and Community Services Association Conference and it reminded me of a post I did some time ago about Boomers…it’s still relevant so I thought an update was in order. The post was based in part on a research report from Nielsen around a subject that’s ‘near and dear’ to me.
Why do marketers’ misunderstand Baby Boomers ?
The over 50s are Australia’s fastest growing consumer segment, controlling the largest portion of Australia’s wealth, with the discretionary spending power estimated at over $218 billion.
In the USA ‘ they (Boomers) spend 38.5% of Consumer Packaged Goods (CPG) dollars. Yet it’s estimated that less than 5% of advertising dollars are currently targeted towards adults 35-64 years old (which includes the latter half of Generation X in addition to Boomers). With most marketers generally targeting 18-49 year olds, more than half of the affluent Boomer demographic is ignored entirely.’
The Nielsen report strongly suggests that younger consumers are losing their dominance and defies the often held view that Baby Boomers spend little, resist technology and are slow to adopt new products.
This prompted me to think about traditional demographics and how the marketplace is changing.
The Aging Population
In Australia, along with immigration, the environment and Work Choices, a regular topic is the aging population.
The United Nations reports that: ‘ Population aging is unprecedented, without parallel in the history of humanity. Increases in the proportions of older persons (60 years or older) are being accompanied by declines in the proportions of the young (under age 15). By 2050, the number of older persons in the world will exceed the number of young for the first time in history.’
On ‘our patch,’ the Asia Pacific Region, we have the oldest (Japan,) the fastest growing (Korea, Singapore, Taiwan) and the largest (China,) aging consumer populations in the world. The under 50 population in China will actually shrink by 117 million people over the 10 years to 2018.
The Treasury’s Intergenerational Report projects that over the next 40 years, the proportion of the population over 65 years will almost double to around 25 per cent. And Australian’s life expectancy is amongst the highest in the world...men 79 and women 84.
Economic factors
Another part of this equation is that Gen Y’s are making lifestyle choices and are having less children and are likely to have smaller salaries. In other words, the likely scenario is ‘a larger older population and a much slower-growing young one’, suggests Doug Anderson, Nielsen’s senior VP-research and thought leadership.
Technology
Another misperception is that youth is driving all the changes in technology and for some reason there is a presumption that boomers are being left behind. This is of course utter rubbish – with around 39% of the Australian online audience being 50+
Forbes reports that the USA boomers hold an amazing 70% of disposable income:
- The leading consumers in 119 out of 123 CPG (Consumer Packaged Goods) categories
- Spend more money on technology than Gen X or Gen Y – an average of $650 per month
- 40% of all customers who pay for wireless service
- Close to 100% own computers (and 41% own anApple)
- 53% of them are on Facebook (driven in part by the arrival of grandchildren – see below)
- 71% of Boomers go online every day
- 66% send text messages (albeit not quite as many as their teenagers and grandchildren)
- Spend $7 billion online annually
- Purchase 62.5% of new cars
- Purchase 80% of luxury travel
- Spend more than any other generation on health care and pharmaceuticals
- One in 7 boomers care for a parent or family member
The retirement age in Australia is 65 and I’m sure that boomers will continue to adapt and adopt new technologies.
All of this means that we are looking at a great number of people over the age of 65 in the coming decades and we need to understand what this means for marketers. Reaching and engaging with consumers has never been more complex and advertisers will have to adapt to their aging audience.
We are in a world where all products and services can’t easily be defined by the age of people who use them.
I cringe when I see ads targeting the ‘Over 55’s’ or stereotypical images flogging life insurance, gated communities or some cream to solve all your aging problems. The Nielsen report highlights that Boomers are not a homogenous group that can be neatly pigeonholed. Given that the defined Boomer period 1946 – 1964 has a 20 year difference between the youngest and oldest Boomers – we are looking at a very wide range of subsets with different tastes and buying habits etc.
Empty nesters, late parents, early retirees, grand parents and those still actively engaged in business – they’re all Boomers.
The fixation of marketing to a group solely based on ’ Age’ is already passe. We obviously need to know as much about our customers as possible to ensure that our messages are relevant and engaging. And how do we do that ?
Market Segmentation and increasingly personal/relevant communication are the keys.