US: Ignore the baby boomers and you risk going bust
Advertisers insist on aiming their work at youthful consumers – but the people with money are middle-aged and getting ready to retire.
Youth may well not be the only thing that is wasted on the young. The latest demographic and consumer spending research from the US also suggests that millions of marketing dollars could be better spent targeting older consumers, rather than their children and grandchildren. It seems that marketers are still obsessed with youth and that, while they pay lip-service to the notion of capturing the “grey dollar” of the over-50s, very few actually spend their advertising money on this market. Most marketers still seem to believe that older consumers are too set in their ways to change brand loyalties, and that their brands’ future success lies with the American youth. In many cases, this seems to be a very short-sighted approach, based more on habit and theory than on truth – it is marketers themselves that are set in their ways. The 50-year-olds of today bear almost no resemblance in habits and attitudes to their parents and many marketing departments would be wise to look again at these people.
The American post-war baby boom of 1946 to 1964 saw the birth of 76 million children, the oldest of whom turn 56 this year. The US Census Bureau predicts that, by 2020, 47 per cent of the population will be aged over 49. According to the American Association of Retired Persons (AARP), the over-50s control 70 per cent of the net worth of the nation and 50 per cent of the disposable income – yet they receive less than ten per cent of the advertising messages. Not all over-40s are stuck in their ways or totally brand-loyal, and many people change their buying patterns as they age. The AARP research shows that loyalty varies by category rather than by age and that the over-45s now are more receptive to marketing messages than was once thought.
An impressive 43 per cent of 55to 64-year-olds use the Internet – a figure that will no doubt increase significantly as the baby boomers become the over-55s. These “silver surfers” also spend more time online than younger people and are more likely to actually buy something online: over-45s now account for a third of all Web purchases. According to MRI’s “Cyber Stats” report, older consumers’ interest in tracking their investments online is 41 per cent higher than that of the average adult and they are 20 per cent more likely to trade stocks, bonds or mutual funds over the Web. Other popular Web categories for the silver surfers include travel planning and health information. Yet most online advertisers are still concentrating on bringing the under-35s to their sites, even though this group is actually less likely to buy anything.
Still, there is no escaping the fact that Americans value youth and beauty very highly and the baby boomers are no exception. Products and services that promise to rejuvenate the body and mind – and ideally succeed in doing so – do big business among the US’s ageing population. Trend forecasters predict that “nutraceuticals” – foods containing “anti-ageing” additives, such as vitamin E and beta-carotene – will become increasingly popular, alongside Viagra-esque drugs and cholesterol-fighting foods.
Growing in popularity alongside these functional foods will be “cosmeceuticals” – anti-ageing cosmetics and youth hormone therapy. Cosmetic surgery is becoming ever more popular and acceptable among American women, ten per cent of whom will have had at least one cosmetic procedure by the age of 55 and a third of whom expect to undergo cosmetic surgery at some stage. Seven out of ten US women aged between 45 and 54 use dye to hide their grey hair, while large numbers of men continue to buy products that promise them they will either stop losing their hair or will grow back what they have lost. Both genders want their hearing aids to be inconspicuous and their bi-focal spectacles to appear single-focus. Cosmetic dentistry is experiencing a huge rise in demand from older people.
However, it is not just the body-preservation and beauty industries that will thrive thanks to the ageing baby boomers – these consumers also feel that their minds need work. The generation that made having a therapist socially acceptable will continue to share its inner demons. A recent poll by Del Webb – which builds and markets housing for US retirement communities – showed that a third of baby boomers think psychologists and psychiatrists will be important to them when they are older. There is also likely to be increased demand for the services of “life coaches” and other professionals dedicated to helping people navigate retirement and transition into a new phase of life.
The music industry – that bastion of youth – also has a lot to thank US baby boomers for: they were mainly responsible for the huge success of The Beatles “1” album last year, as well as the fact that ageing rockers such as The Rolling Stones are able to continue selling out venues. Many middle-aged consumers are more musically active today than they were ten years ago and are nostalgically reliving their youth through music.
Del Webb itself says it has noticed a huge shift in what older people are asking for in their homes, including a demand for “his and hers” offices. This reflects the fact that 80 per cent of those questioned in a recent AARP survey say they intend to carry on working at least part time into their seventh and eighth decades. After extensive research into what the baby boomers see as important facilities for use in their later years, Del Webb is now building computer labs, health spas and college classrooms on its properties. A recent New Yorker magazine cartoon illustrates these changes, showing a small boy looking up at an old woman sitting behind an enormous desk and saying: “Why Grandma, what a huge desk you have!”
With incomes a third higher than those of their parents’ generation, the baby boomers will increasingly have the money and time to explore the issues and products that concern and interest them. Those companies that tap into the potential of the healthiest and wealthiest American retired generation in history will certainly have a lot to smile about through their newly-whitened teeth.
Polly Devaney is a former Unilever executive now working as a freelance business writer