“Because that’s where the money is.”
bank robber Willy Sutton when asked why he robbed banks
Older adults don’t spend money online.
Boomers outspend younger adults online 2:1 on a per-capita basis.
How many times have you heard a business say ‘I need to focus on the young because that is the future?’
<answer: every day, every hour, every minute>
I am certainly not opposed to building a business with the stamina to be successful in the future … but <and this is a HUGE but> … we seem to spend so much time talking about the future … or even the present only in terms of the recession and unemployment … we sometimes forget that people do spend money.
And lots of it.
And the fact that the present economy is really about the boomers.
This is a little group in the United States of about 80 million aged 45+.
It seems like the moment this group entered the workforce in the 1960s they began to transform America’s economy and politics and culture.
And it seems like they are continuing to do so.
The first of the estimated 80m Americans born between 1946 and 1964 turn 65 in 2011, the normal age for retirement. And while financing their retirement they are still out there and spending gobs of money.
Gobs <not a technical term>.
They are 80 million consumers earning $2.5 trillion annually with 2.5 times the discretionary spending power of any other group, holding 75% of the nation’s current wealth and standing to inherit between $14 and $20 trillion over the next 20 years.
The heck with the young & the future … it seems to me like a group worth targeting for a business.
We can all dither & debate about how to stimulate the economy and increase sales and how social media is destroying life as we know it and … well … whatever … but … there are 80 million people with money to spend, lives to live and things to do <after what most would consider a hard earned, well-deserved, relatively indulgent, fast paced life>.
Here are some 50something factoids <some of which may actually be slightly dated> to change your frame of reference:
– An American turns 50 every 7 seconds—that’s more than 12,500 people every day (U.S. Census).
– The senior age group is now, for the first time, the largest in terms of size and percent of the population in the U.S. This age group grew at a faster rate than the total population between 2000 and 2010, according to 2010 Census.
– More people were 65 years and over in 2010 than in any previous census. Between 2000 and 2010, the population 65 years and over increased at a faster rate (15.1%) than the total U.S population (9.7%).
– By 2015, those aged 50 and older will represent 45% of the U.S. population (AARP).
– Baby Boomers make up 35% of the American adult population (Scarborough).
– The 55+ age group controls more than three-fourths of America’s wealth (ICSC). This means they have more discretionary income (wealth) than any other age group (total income is estimated to be $900 billion).
– 78 million Americans who were 50 or older as of 2001 controlled 67% of the country’s wealth, or $28 trillion (U.S. Census and Federal Reserve).
– Boomers and seniors have seen a decrease in their median family net worth because of the recession but they still have a net worth 3x that younger generations (Economic Policy Institute).
– The 50+ have $2.4 trillion in annual income, which accounts for 42% of all after-tax income (U.S. Consumer Expenditure Survey).
– Adults 50 and older control about 70% of the aggregate net worth of all U.S. households (U.S. Consumer Expenditure Survey) – $7 trillion of wealth
– Baby Boomers outspend other generations by an estimated $400 billion each year on consumer goods & services (US Government Consumer Expenditure Survey).
– In 2009, spending by the 116 million U.S. consumers age 50 and older was $2.9 trillion, up 45% in the past 10 years (Bureau of Labor Statistics).
– Baby Boomers account for nearly $230 billion, or 55%, of consumer packaged goods sales (Nielsen).
– Boomers outspend younger adults online 2:1 on a per-capita basis (Forrester Research).
– Americans over 55 spend 50% of all vacation dollars in America (ICSC).
– 55-64 year old outspend the average consumer in nearly every category, including: food away from home, household furnishings, entertainment, personal care, and gifts (US Government Consumer Expenditure Survey).
– Women over 50 spend $21 Billion on clothes annually (US Government Consumer Expenditure Survey).
– Baby boomers take great pride in the appearance of their homes as 27% have had landscaping done in the past year and they are 21% more likely than all American adults to have spent $10,000 or more on home improvement in the past year (Scarborough).
– The NAHB predicts that the aging in place remodeling market to be $20-$25 billion.
That’s about 10% of the $214 billion home improvement industry.
– 96% of baby boomers participate in word-of-mouth or viral marketing by passing product or service information on to friends (ThirdAge and JWT Boom).
– Own 80% of all money in savings and loan associations
– Spend more disproportionately to their numbers.
– Account for 40% of total consumer demand
I will make one caveat here.
I am not suggesting ignoring the future market … simply pointing out that currently the economy is being driven by these happy few <lots of fews>.
Why do we ignore them?
Research findings tell us that, in general, employees have negative attitudes toward the senior adult or “myth-interpret” their actions, values, needs or behavior.
Let me address some of the challenges this group faces … starting with unemployment.
It’s important to look at is who is unemployed.
According to recent New York Times and Bureau of Labor Statistics numbers, by far the largest group of unemployed is the 15-to-24 group at a whopping 16.7% followed by the 25 to 44 group at 8.2% and lastly … the good ole boomer/boomer-to-be’s … at only <easy to say if you’re employed … I know> 6.3%.
This means that the 50somethings are still employed <for the most part> and earning money and spending <for the most part>.
Attitudes <which will drive their behaviors>.
Attitudes … what is going on in their heads <those typically conservative, risk averse heads>.
Beyond some numbers let’s talk about the head.
This is a unique group of people.
Maybe better said … they aren’t unique … but they are certainly in a unique situation.
Let me explain.
Just as first time parents realize that there isn’t a “how to” guide to parenting written for them <and they are more likely to have to make it up as they go> boomers are hitting their 50’s without a ‘how to’ guide for aging.
And here is where it really gets unique.
Unlike first time parents who invariably looked to how their parents parented this group CANNOT look to their own parents’ behavior for guidance.
It’s a whole new world … or work, play & aging.
And I use aging as the key word because that is kind of it.
Everything revolves around this life stage thinking.
Sounds simplistic but it is.
Think about this.
About 2/3rds of boomers admit “realize that I am getting older and I think about it frequently.”
This isn’t a bad thing … or anything against “you are only as old as you feel” … this is a pragmatic truth.
And this pragmatic truth was made even more pragmatic by the recession <it puts additional pressure on some real aspects of life … ‘pragmatic doing’ versus ‘live life to its fullest doing’ in particular>.
And back to spending.
Boomers will spend gobs <and more gobs> of money trying to retain some aspect of youth:
The Health Conscious Boomer
• In the next ten years, U.S. baby boomers will increase their annual spending on wellness-based services from approximately $200M to $1 trillion (Paul Zane Pilzer, The Next Trillion).
• Americans 55+ are the fastest-growing age group among gym members, up more than 266% since 1987 (IBISWorld).
• 82% of adults aged 50+ who use the Internet research health and wellness information online (Pew and American Life Project).
• Throughout 2012, more than half of U.S. online consumers used fitness electronics, and more then one-third planned on buying a health-related gadget in 2013 (CEA).
Let me state unequivocally that no one … no generation … has ever really mastered the skill of aging gracefully … and this generation is particularly ill suited to handle this gracefully.
Boomers will go kicking & screaming … hmmmmmmmmmmmmm … but in a pragmatic way.
Pragmatic is a key word.
All generations become more pragmatic as they age.
That is a fact.
But their pragmatism is always blended by how their most productive years were lived. And that is where this generation of people vary from past generations.
Boomers are embracing their actually age <over 40% say they feel their age or older> but want to embrace their age the way they want to … not how Life may want to dictate.
In fact … they want to maybe not embrace … but rather impose their will on Life.
And as they impose their will … their age & experience will create challenges to business as they move from highly success ambitious almost ruthless amalgamates of youth … to relentless “I have value and hear me roar” personal uniqueness in their older years to businesses.
Reaching out to them must reflect a tone allowing some individual interpretation based upon their needs and desires.
Group labeling will be balked at <unless it is in reference to their younger success>.
In fact … businesses should be careful about labeling the aging boomers at all.
And while on attitudes … we have to realize their money comes with a chip … as in a chip on their shoulder.
More & more of the younger generation hold a grudge <if not some bitterness> against them:
“Baby boomers want everyone to keep kissing their collective butts, but the fact of the matter is you only have another ten to fifteen years of buying power…We gave the 50 plus age bracket Blackberry[s] at work, HA WHAT A JOKE.
The baby boomer generation is the most over-served, self-righteous, boo-hoo generation of the last 100 years.
Not only has it poisoned the planet…95% of all males over the age of 50 would rather be 35.
You are old and will be forgotten soon.
And it’s about time.”
All that said.
Boomers are booming and they are spending a shit load of money.
Unfortunately most businesses need to get their heads out of their asses because it is beset by what David Wolfe <an author on marketing to older customers> calls CYS <chronic youth syndrome>.
Businesses are afflicted with CYS … this crazy idea that youth rules the marketplace <no matter what you sell>.
We need to realize that boomers are shaping the values, attitudes and behaviors of the marketplace … either by embedding them or by creating something the young will reshape in their own vision.
Boomers want substance and reality as dictate by them … not by ‘what it is supposed to look like.’
They are going to create their own ‘aging’ rules.
They may not want age to be celebrated <per se> … because even they will admit that aging sucks … but they are going to do everything … and anything … to insure growing older will not be denigrated. This boomer generation may be the most vocal with regard to maintaining a sense <perception to others> of their value as time goes on.
Their version of aging will not reflect fantasy or some late life stage heroic theme but rather a defining of the here & now.
Frankly … this isn’t really any epiphany … this generation is only putting their own spin on what psychologist Maslow stated about aging attitudes:
– A superior perception of reality
– Less interest in material things and more interest in things that lead to experiences
– Increased acceptance of self, others and nature
– Increased wisdom
– Higher capacity for humor
– Increased spontaneity
– Increased resistance to hyperbole <give them the facts>
– Increased appreciation for friendships
– Increased desire to do for others
– Increased sense of fair play and fairness
– Increased creativity <revitalization of ‘self’>
– Increased desire for personal growth <gain knowledge>
– Some resilience to changing manifestations of the value system
I say all this because if you are a business … and you want some of the boomer money <which you would have to be absolutely crazy to not want> you have to try and understand the values and behavior, and buying motivators and satisfaction needs change as they get older.
I imagine the last thing to point out with regard to boomers and economy is that with their wealth … and some of their attitudes … whether we like it or not they will be influencing policy and government <which influences business and behavior>.
Boomer attitudes, preferences and the intensity of their feelings are playing an important role in the inertia that afflicts America <and Congress> because of their wariness of change.
An overwhelmingly white and non-Hispanic group, they see a society spinning out of control … and not because of them <like many young people believe>.
They see a society embracing social groups such as gays and lesbians who used to be outcasts in their youth … a society legalizing substances such as marijuana … all signs of social degradation <to them>.
We need to remember this also … because older folk are influential beyond their numbers with an outsized influence on governing <politics> as well as the economy.
But that is a different post for a different day.
If you have a business … the boomers have the money.
And they are spending it.
Ignore this at your own peril.