The first baby boomers were conceived in 1946, after the troops returned
from World War II with, apparently, one thing on their minds. The boom
came to an end in 1964 with the enthusiastic acceptance of the birth
control pill. This generation of consumers became the biggest and
richest in history, breaking rules and flouting convention from the days
of Woodstock through to the yuppie years and the internet era.
It is also the generation that invented consumption culture. Emerging
from the privations of rationing in 1954, boomers learned to flirt with,
embrace and capriciously drop the brands that came their way, and
marketers have hung onto their coat tails ever since. To follow the
boomers was to follow the money.
This generation has led lives light on duty and high on thrills in a
time of relative peace and unprecedented prosperity – ‘a six-decade
party’ is how one boomer website describes it. But is it now hangover
time, as this generation starts to feel the physical effects of ageing
and the combination of demographics, debt and denial threatens to take
its toll?
From this year, British boomers will turn 60 at the rate of 2800 a day,
with, on average, a further 21 years on the clock left to run.
Perversely, it is the very size of the generation and its predicted
longevity that pose the economic problems. Who pays for their healthcare
and state benefits as the boomers age? Subsequent generations are
neither as big nor as prosperous. This tightens the dependency ratio,
leaving too few propping up too many for too long: the much-vaunted
demographic time bomb. The only way for governments to balance the books
is to slash welfare payments, force more patients to pay for medical
procedures and put the squeeze on state pensions. In other words, the
boomers will have to pay for themselves.
For a generation that has always tended toward a live-for-the-moment
ethos, its savings hole is inevitably a big one. A 2004 independent
government report assessed the total pensions shortfall at ú57bn.
Most boomers have money locked away in property – predicted to swell to
a collective value of ú1425bn by 2020, when the bulk of the cohort will
be over 60. The realisation is dawning, though, that their bricks and
mortar will be used neither to fund the good life nor to provide for
heirs: it will have to pay for the basics. According to a report from
The Prudential, 12.9m British boomers expect to use their property to
provide for their old age. With so many selling to downsize, or opting
for equity release, this is the one force that might finally depress
house prices. The Prudential predicts a double-whammy: bigger houses
will sell for less as supply exceeds demand, while those selling to
downsize will compete with first-time buyers for smaller properties,
pushing those prices up and leaving the boomers to pocket less than they
expected.
Compounding this coming financial squeeze is the boomer psychology.
Never mind average life spans: boomers think they are going to live and
stay active for ever. In a recent US survey, when asked to define ‘old
age’, most boomers quoted an age three years above the country’s average
age of death. Many fully expect to make it to 100. This denial of death
and an urge to stay in the thick of things throws the issue of finite
funds into sharp relief: so much time, so much to do, but not so much in
the kitty. Something has to give. Perhaps, after all these years,
boomers will do the thing they have never done: tighten their belts and
ease up on consumption. If so, the conventional wisdom on 60-something
marketing will be turned upside down.
The usual-suspect predictions for winner categories tend to focus on
financial services, leisure and travel. A greying but still
young-at-heart couple, hand-in-hand on a perfect beach, is the cliche
image for the many ‘silver-market’ seminars, but it is wide of the mark:
this been there, done that generation is unlikely to be found forking
out its dwindling reserves on a world cruise.
Health tourism, on the other hand, could be a big winner. For example,
Anita Hildreth, a boomer in her 50s, was told she was too young for the
new hip she needed to be provided on the NHS. To go private in this
country would mean an ú11,000 bill, so, following advice from her
specialist, she flew to Chennai, on India’s east coast, where the
surgeons are superb and the costs are low. For the operation and the
travel she paid ú5100.
Financial services targeting older consumers should hold up, as boomers
seek to ring-fence the resources they have, but look for losers among
branded essentials, fashion and leisure equipment as they prioritise
experience over acquisition and straightforward value over badge
values.
The rewards will go to those marketers who understand both the
psychology and circumstances of the boomers and find imaginative ways to
reconcile them. Richard Elliott, professor of marketing at Warwick
Business School, predicts the explosion of the hire market. Those
last-chance Harleys won’t be bought, they will be rented for the week,
or for the summer, and chalked up as another great life experience.
Raoul Pinnell, chairman at Shell Brands International, believes mobility
will be a hugely important consideration for members of this generation
as they head into their seventh decade. ‘We are looking at value and
service propositions to keep them loyal,’ he says. Both are based on
afternoon times when business falls off and the elderly tend to be the
main customers. ‘The value proposition is to offer deals for that part
of the day; the other idea is to provide attendant service at the pumps
for those hours, so customers won’t have to get out of their cars.’
The voluntary sector will burgeon, too, as retired boomers seek new
outlets for their intellectual and social energies. Just don’t expect it
all to be altruistic; this is, after all, the so-called ‘me generation’.
Boomers will be doughty activists in the fight to protect their state
pensions and maximise their rights – and political parties will need to
engage with them, because by 2025 over-60s will outnumber the under-25s
for the first time. Expect social and political marketing to surge, and
watch for a high-profile figure to be appointed minister for ageing.
Despite their political clout, boomers will have a fight on their hands.
The generation that vowed never to trust anyone over 30 will find
younger generations equally unsympathetic to their suddenly reduced
circumstances. Those boomer traits – selfishness, hedonism, insouciance
– threaten to boomerang and wound their credibility. Or will this be
just one more challenge the boomers will take in their stride? James
Murphy, associate director of The Future Foundation, thinks so. ‘They
won’t be so dependent on welfare and won’t really retire – they will
just move into new roles,’ he says, citing newsreader Anna Ford’s
retirement at 62 from the BBC, only to be snapped up as a director of
Sainsbury’s.
While Ms Ford’s choices are not open to everyone, Murphy’s point has
resonance. This generation tends to surprise, thrive and change the
rules to suit itself. Marketers looking to make money from them will
need to be clever.
BOOMER BRANDS
1940s: The first boomers, born in 1946, were bottle-fed OsterMilk and
weaned on Farex, brands that survive today. Teething pains were soothed
with Steadman’s Powders, a foul-tasting cure-all.
1950s: With wartime food rationing finally ending in 1954,
eight-year-old boomers could tuck into Spam Luncheon Meat – a salty mix
of chopped pork shoulder and ham that soon sold its billionth can
worldwide. In 1957, aged 11, they read The Topper, a comic produced in a
novel double-size format.
1960s: As trendy teenagers in 1964 they hung out in Wimpy bars and tuned
in to the original pirate station Radio Caroline. They came of age in
1967 and spent their early-20s making love, sporting Mary Quant
cosmetics, devouring the contents of Vesta Curry packs and taking to the
road in the ubiquitous VW Combi – the hippy bus of choice.
1970s: In 1978, aged 32, the boomers went transatlantic aboard the Laker
Skytrain, the brave but doomed low-cost airline venture that would later
inspire Richard Branson.
1980s: Riding the bull market in the mid-80s, 30-something boomers wore
Reebok and got a deep tan with Bergasol – two things consumers are less
inclined to do now. A few pioneered the Motorola ‘brick phone’, which
weighed about a kilo and cost ú1400.
1990s: In 1991 at the age of 45, they discovered Dell. In 1996, as they
hit 50, they engaged with BUPA as a claimant for the first time.
2000s: By the turn of 2000, aged 54, the attractions of Clairol’s Nice
‘n Easy range of hair colourants became all too apparent.
2010+: Who knows, by 2010 the boomers may be discussing the merits of
Smith & Nephew hips and knees. But look on the bright side, boomers –
it’s the price you pay for not dying before you get old.
DOS & DON’TS
Do understand boomers’ delusions. They do not accept their bodies are
deteriorating.
Don’t be taken in. 70% will have a chronic condition or disability by
65. They will need help to deal with physical impairment, such as
extra-large instrument panels in cars, but it will need to be presented
as cool design.
Do innovate. 65% of over-55s agreed with the statement ‘I welcome all
technological advances for everyday living’.
Don’t take loyalty for granted. They are more likely to switch brands
than previous 60-plus consumers.
Do segment. There are winners, losers, mavericks, mainstreams, actives,
passives, as for all cohorts.
Don’t refer to ‘grey’ or ‘silver’ consumers. It is a sure-fire way to
get the marketing wrong.
SOURCE: brandrepublic.com