Despite the youth obsession of our current culture, baby boomers represent one of the keys to economic prosperity in the coming decade, according to industry pundits as varied as marketing guru Faith Popcorn and economist Harry Dent. Born in the post-war period of 1946-1964, baby boomers are now in their peak spending years of 47 to 65. Small businesses may be wise to tailor some of their products and services to a segment that is 78 million strong. As you think about doing so, there are several things to keep in mind:
Quality Discernment. People who came of age during relatively prosperous times are used to a certain standard of comfort and reliability in goods and services. They expect state-of-the-art quality not only in their luxury cars and resort-level retirement communities, but in the medical services and technology products they purchase as well.
Spending Power. Since the boomer population represents a large percentage of households earning more than $100,000, they have the discretionary income to support their tastes. In fact, people in the 50- to 60-year-old age range represent about $1 trillion of annual spending power, which is nearly twice that of today’s 60 to 70 year olds. Additionally, baby boomers are expected to keep spending as they age as they are likely to continue to work in their chosen field, start a second or third career, remarry, or receive an inheritance from their own parents.
Brand Flexibility. Older boomers, who grew up in The Sixties, maintain a dedication to individualism and experimentation. Studies have shown that boomers are more likely to abandon brand loyalty in favor of a new and innovative offering than other market segments. This represents a new way of thinking, as people in network television advertising used to view people over 50 as inconsequential because they were too set in their ways. However, according to a survey by Leo J. Shapiro & Associates LLC cited in a 2005 Businessweek article, “48 percent of shoppers aged 50 to 59 said they would probably switch brands of consumer electronics, compared with 40% of all respondents. And 56% of people in this group would try another brand of health-and-beauty product, more than the 51% figure overall.”
Speak Their Language. Marketing to baby boomers should be executed in their language. The annals are filled with marketing failures that tried to appeal to older consumers desire to hold onto their youth, e.g. Mitsubishi’s ad campaign showing older adults dancing to indie rock music and Gap’s showing older actors in their advertisements without actually retooling their product line to fit the average shape of an older consumer. By contrast, cosmetics companies that celebrate the beauty of the older woman’s non-plastic-surgery-enhanced face have realized significant revenue streams from the boomer market.
Recognize the Opportunities. Small businesses analyzing whether their products or services would appeal to baby boomers should take a look at what older Americans are actually buying. There are the obvious opportunities for small businesses that cater to the real estate, vacation planning and healthcare needs of this generation. However, boomers are also buying hardware, software and mobile phones in record numbers in order to remain engaged with far-flung children and grandchildren; seeking investment advice as they tap into their retirement funds; hitting the roads, seas and air in new RVs, boats and aircraft; seeking to remain vital with custom-tailored vitamin regimens and fitness-related services; and taking advantage of the “empty nest” by re-embracing their love lives and cultural interests.
Small businesses in almost every industry should consider evolving to serve the baby boomer market. They will find that they have a receptive and economically viable audience for many years to come.