The Boomer Project-Boomers Over 50


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FIVE “NEW” PRIORITIES FOR BOOMERS OVER 50, a presentation to the Hampton Roads Chapter of the American Marketing Association, . Boisseau Partners,

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The Boomer Project-Boomers Over 50

  1. 1. THE COMING BABY BOOMER BOOM: FIVE “NEW” PRIORITIES FOR BOOMERS OVER 50 INTRODUCTION Over the next four years, 17 million Boomers will turn 50 years old. And there’s nothing they can do to stop it. It’s estimated by Find/SVP that these newly minted “seniors” will spend $2 trillion annually on consumer goods and services. What’s your share? Baby Boomers have, from birth, been the economic engine of consumer goods and services. As they pass the half century mark, they remain the largest, most important demographic group in America. Boomers have always gotten what they’ve wanted, and unlike the “senior” generation ahead of them, they have not established unshakeable product buying habits and are “always looking for better products” (AARP/RoperASW Survey in May 2002). They have always experimented with products and services and enjoy trying new things. But life is changing for them now as they reach 50 and beyond. Until now, marketers have followed one of two courses when it came to targeting the 50 and over crowd. Either they’ve ignored them, focusing instead on the 18-49 segment, or they have targeted them, but done so by lumping everyone over 50 into the “senior” or “mature market” group – complete with ads and materials featuring gray-haired “active adults” leading “active lives.” Now, neither approach will work. You can’t afford to ignore Boomers over 50 (“Boomers” are those born between 1946 and 1964 – there are 78 million of them. “Boomers over 50” are about half of the total and about 4 million more join the club every year). There’s simply too much money in their hands. And you also can’t market to them like you’ve marketed to previous over 50 groups. They think, act and feel differently than any previous over 50 generation. The Boomer Project would like offer marketers targeting Boomers over 50 insights into the five “new” priorities that will shape Boomer spending over the next 10-20 years. Think of these as the basic instructions for how marketers should approach this new version of an ageless cohort. You know, the one with $2 trillion ready to spend. Differently.
  2. 2. THE COMING BABY BOOMER BOOM: FIVE “NEW” PRIORITIES FOR BOOMERS OVER 50 FIVE “NEW” PRIORITIES FOR BOOMERS OVER 50: 1. Personal: Look & Feel 2. Financial: Income & Independence 3. Nesting: Home & Hearth 4. Enjoyment: Life & Leisure 5. Experiences: Explore & Escape Life is different over 50. At least it has been for previous generations. For Boomers, though, as they pass 50 they view life as simply something that’s been experienced longer. At this new stage, life remains something that they want to make sure continues to be experienced – and, if possible, not just experienced well, but experienced better. So the priorities aren’t necessarily new to Boomers, but are revised versions of existing priorities, re-focused through the lens of 50 years on the planet. Let’s take a look at each one and the implications for marketers trying to connect with Boomers over 50. 1. PERSONAL: LOOK & FEEL Mick Jagger is 60. Robin Williams is 51. In November, Kim Basinger turns 50. In February, 2004, so do Christie Brinkley and John Travolta. The “Youth Culture” is finally getting old. But don’t worry, they “You Look aren’t going to act old, feel old or Mahvelous, Dahling” look old (have you seen Christie Brinkley recently?). For them, time has inevitably marched forward, turning the ageless Baby Boomer into an aging Baby Boomer. Yet despite this, Boomers still maintain the same fundamental cultural mindset that has shaped this group from the beginning: Young. They see themselves as 10-20 years younger than they actually are. They don’t think of themselves as old people who “think young” but as young people with grey hair and some wrinkles. They will start to see themselves as “old” when they hit 70. Until then, the “Me” generation still puts Number 1 as number one. How Boomers look and feel, inside and out, will be the top priority Boisseau Partners | Boomer Project 2 Richmond, Virginia 804.775.2184
  3. 3. THE COMING BABY BOOMER BOOM: FIVE “NEW” PRIORITIES FOR BOOMERS OVER 50 for their spending over the next 10-20 years. There’s no better and safer investment than in one’s self, and the navel-gazing Boomer generation will put their money where it matters most – in the mirror. IMPLICATIONS FOR MARKETERS: For marketers, the fact that Boomers want to look and feel young, healthy, vital and sexy means health care, fitness and “better-living- through-pharmaceuticals” will dominate spending patterns. Boomers have a simple goal: live longer and better. Yes, they agree it’s getting harder and harder to keep their figure or stay attractive. But that doesn’t mean they are going to stop trying. If anything, they’ll redouble their efforts. Physical health, mental health, apparel, cosmetics, botox, plastic surgery, Viagra, hair care, fitness centers, health food, Lasik surgery, teeth whiteners, spas and everything in-between will remain big businesses if they cater to the Boomer over 50 market. 2. FINANCIAL: INCOME & INDEPENDENCE By age 50 most Boomers have reached their peak earning years and are eyeing the big “R” (retirement) in a matter of years. They have been salting away money in 401(k) plans and other investments. They’ve made progress in paying down their home mortgages and have even tapped into that equity for some wants and needs. In many cases, “The Living is they’ve been recipients of life Easy, Paying for it insurance payouts from the death of a is Hard” parent. They are about as cash rich, and debt-free, as they’ll ever be. But they are also getting squeezed financially in ways they could not have possibly foreseen: v The stock market shrinkage in recent years has turned their 401(k) into a 201(k). The resulting retirement nest egg is much smaller than anticipated, putting thoughts of early retirement off for now, and making them realize they really will have to fund their own retirement entirely. v College and education expenses for their children are even higher than anticipated and are growing year-to-year at a rate north of 20% (in most states). Boisseau Partners | Boomer Project 3 Richmond, Virginia 804.775.2184
  4. 4. THE COMING BABY BOOMER BOOM: FIVE “NEW” PRIORITIES FOR BOOMERS OVER 50 v Health care and living expenses for their aging and infirm parents are higher than anticipated. These new financial obligations and realities make managing their money more important than it has ever been before. Especially since they know that after their peak earning years they will hit their non- earning years. IMPLICATIONS FOR MARKETERS: Financial planning, estate planning and overall portfolio management services will grow in importance for all Boomers, whether they have income to preserve now or want to manage their money for their retirement. Mutual funds, annuities, products with inflation protection, insurance – including affordable long-term care insurance – and other financial tools will become increasingly important for Boomers over 50. So will investments with short-term potential. 3. NESTING: HOME & HEARTH Boomers are home owners. Boomers over 50 are home owners with low or no mortgages, so they have equity in their homes that they can use to improve it, enlarge it or replace it. American Demographics forecasts Boomers will buy an additional one million second homes by 2010. That means Boomers over 50 are going to spend billions to feather, or refeather their nests. They will want a functional and comfortable environment, one that’s practically carefree because they aren’t going to spend any time providing maintenance. They will want rooms “Home is where or features that enable them to live the Heart is” their fantasy lifestyle – gourmet kitchens, home theatre, home offices. As Boomers plan their retirement, they are deciding it’s more important to stay near family and friends versus relocating to a sunnier climate. Called “aging-in-place,” this is a boon for home remodelers and decorators, not necessarily in Florida or Arizona, but in locations with outdoor activities and scenery – Northern California, Colorado, Virginia and Texas will be popular spots. Those homes will have to be maintenance free, or gardening, cleaning and upkeep services will need to be readily available. Boisseau Partners | Boomer Project 4 Richmond, Virginia 804.775.2184
  5. 5. THE COMING BABY BOOMER BOOM: FIVE “NEW” PRIORITIES FOR BOOMERS OVER 50 IMPLICATIONS FOR MARKETERS: From homes to home décor to home maintenance, Boomers over 50 will be big spenders in coming years. Real estate developments that aren’t “retirement” or “active adult” communities, but high end, maintenance free, and close to activities and scenery will be the next wave. Functional home products, easy to see and use, and easy-to-buy maintenance programs will fly off the shelves. Home décor that delivers on the lifestyle fantasy of Boomers will be the next trend. All-in-all, anything to make the home more comfortable and enjoyable for Boomers will sell big over the next 10-20 years. 4. ENJOYMENT: LIFE & LEISURE Baby Boomers have always taken time for themselves and that won’t change as they become 50 and older. They are finding ways to enjoy their life and balance the demands on their time. Anything and everything they can do to better manage the stress in their lives, they are indulging in. From toffee nut lattes to dinner out at a high end restaurant, Boomers look for ways to make life more enjoyable. There are three components to daily life where priorities are changing: gizmos, apparel and entertainment. Boomers over 50 are spending their readily available disposable income on televisions, DVD players, surround sound systems, TiVo, automobiles, GPS navigation systems, OnStar and other gizmos to make life more pleasant on a daily basis. They are looking for time- saving and space-saving devices to reduce stress – from closet organizers to wireless home networks. Interestingly, Boomers once giggled at “Life isn’t meant to be their parents who couldn’t program the endured, but enjoyed” VCR or read the controls on the remote control. But as their own eyesight begins diminish-ing and technology keeps advancing, they won’t have any patience for products or devices that are too difficult to see or complicated to use. They are used to having products developed for their needs and capabilities. As they age, they don’t expect it to be any different. Boisseau Partners | Boomer Project 5 Richmond, Virginia 804.775.2184
  6. 6. THE COMING BABY BOOMER BOOM: FIVE “NEW” PRIORITIES FOR BOOMERS OVER 50 When it comes to apparel, they are ready to splurge on themselves with clothes and shoes, but are finding the selection less and less appealing – women’s clothes are designed and cut either for stick- thin waifs or mature matrons. Try as they might, Boomer women over 50 aren’t the same shape or size as they were when they were in their twenties. Yet they can’t find appealing clothes or shoes that fit their self-image and their waist-line. Daily entertainment decisions revolve around staying home or going out – for meals, for movies, for sporting activities. Boomers over 50 can leave the children at home alone (if they still have any at home), so little to no pre-planning is required. They are looking for daily “experiences” when they go out – at the restaurant, at the theatre, at the sporting event. They want minimum hassle and maximum enjoyment. Venues that cater to their needs will earn their entertainment dollar. IMPLICATIONS FOR MARKETERS: As the priorities and physical abilities for Boomers over 50 evolve, marketers will need to evolve how they package and promote their lifestyle, leisure and entertainment offerings. Boomers have money to spend, and are willing to spend it. But they have to feel as if they are getting maximum enjoyment out of the investment. Even though this is the group that once laughed about “The Clapper,” they now wonder why someone doesn’t make lights that are easier to turn on or off. They want to enjoy a nice dinner out, but don’t want to go to a noisy restaurant where they can’t enjoy their conversation. Bottom line, they won’t accept inferior products or experiences that don’t meet their changing needs. 5. EXPERIENCES: EXPLORE & ESCAPE Boomers over 50 also enjoy getting away from it all – either physically or mentally. Roughly three out of four Boomers over 50 consider themselves “travelers” and do so regularly, spending a forecasted $57 billion on travel by 2005. They travel for fun and adventure, to get away and to indulge. They are driven by what has always “He who driven the Boomer generation, Experiences the obtaining the most or best Most, Wins” “experiences.” A study by the Travel Industry Association and National Geographic Traveler identified four types of travelers which include Boisseau Partners | Boomer Project 6 Richmond, Virginia 804.775.2184
  7. 7. THE COMING BABY BOOMER BOOM: FIVE “NEW” PRIORITIES FOR BOOMERS OVER 50 Boomers over 50: adventure-loving, culture-loving, luxury-loving and outdoor sportsmen. In all cases, Boomers are escaping everyday stress and looking for ways to rejuvenate and recharge. Travel and tourism marketers, from hotels to attractions to cities to tour operators to activities, need to appeal to this cohort when they want to get away, taking into consideration that they are older and less physically able to do the things they once did on vacation – hang glide, climbing the tower at Notre Dame and so forth. Boomers over 50 are also still interested in improving themselves, so vacations where they can learn a new skill – photography, cooking, painting – will continue to be popular. For some segment, the “elder hostel” will remain an attractive option, but in general, this traveling group has money to spend and is willing to do so. IMPLICATIONS FOR MARKETERS: Packaging your travel-related products and services to appeal to Boomers over 50 will be critically important for your long-term growth. They have changing physical capabilities, and want to be accommodated, but don’t want to be treated like the elderly or handicapped. They want their vacations to be experiences they will enjoy and brag about. Even though they aren’t ready to sign up for bus tours and the early bird discounts, they do want to be treated in a way that shows you’re accommodating them. WHERE TO GO FROM HERE By now you’ve concluded that Boomers over 50 are a growing and important segment of the marketing pie, especially over the next 10- 20 years. For years, marketers have discounted anyone in their sixth decade. But those times are gone. To be successful, marketers need to be mindful of the new priorities of Boomers as they reach 50 and beyond. And how to speak to Boomers in advertising and marketing communications materials in a way that connects with them. They aren’t old people who think young. They are Boomers who are living longer. Boisseau Partners | Boomer Project 7 Richmond, Virginia 804.775.2184
  8. 8. THE COMING BABY BOOMER BOOM: FIVE “NEW” PRIORITIES FOR BOOMERS OVER 50 HOW THE BOOMER PROJECT CAN HELP With over thirty years of experience marketing to Baby Boomers, the Boomer Project knows a few things about how to effectively connect with this audience – even as they pass 50. We work with clients who want to form or maintain an important relationship with Boomers over 50, providing insight, techniques and approaches that resonate with Boomers. For example, we know how to create communications programs that: v Make travel, leisure or lifestyle products or services remarkably more appealing to Boomers over 50. v Position purchases that were at one time discretionary as more of a necessity for Boomers over 50. v Use youthful imagery and icons in a way that does not shout “this is for Boomers” but connects with them more so than any other audience. v Enhance the experiential benefits of your product or service. As marketers venture into this new territory trying to reach this changing cohort, the Boomer Project can help. To find out how, contact Matt Thornhill at the Boomer Project: 804- 775-2184 or Boisseau Partners | Boomer Project 8 Richmond, Virginia 804.775.2184