By 2008 the entire baby boomer generation will be over 50, making it the largest and most powerful demographic group in our society.
In Australia, the boomers hold more than two-fifths of Australia’s household wealth. So why on earth is everyone still obsessed with the 18 to 24 year old demographic?
As the baby boomers slip into their 50s they look set to revolutionize the whole meaning of retirement—just as they have led other social revolutions throughout their lives. Baby boom heroes such as Bowie, Dylan, Jagger, Page and Plant are all heading toward the great performer’s lounge in the sky, and it’s hard to imagine them, or the fans who jostled to get front row at their concerts, slipping into their woolly slippers and leaving their false teeth to soak before tucking in for a late one at 9 pm.
Older consumers used to be categorized as a single group called “senior citizens.”
Over time they have been labeled in a slightly more positive light: Silver Foxes, Third-agers or Third-mooners.
It’s perceptions not buzz words that need to change. Why is it marketers split the youth market into dozens of segments, yet turn around and treat millions of mature consumers as one? Success in this market doesn’t depend upon using the right vocabulary, but on developing a deeper understanding of the numerous parts that make up the older generation. This is no longer one single market that can be summarized by a single term. Today’s 50-year-olds are completely different from any other generation of 50-year-olds.
Worse still, marketers frequently make the mistake of lumping in the baby boomers with seniors in their marketing campaigns. There is a big distinction between marketing to what are termed “leading-edge” or “first wave” baby boomers in their 50s and 60s, and marketing to seniors. For example, leading-edge boomers are seeking financial independence, whereas seniors are more interested in physical independence. Failure to distinguish the difference is a death knell for any brand hoping to secure credibility with either group.
Isolating groups within this market is more difficult than analyzing younger categories because with age comes a more pronounced sense of individuality. This challenge is especially prevalent nowadays, where the rules on parenthood, employment and other social delineators have changed so dramatically during the last 50 years. Any disparity between the lively and the lackadaisical is colored by lifestyle choices characteristic of the last twenty years.
Primarily and prominently, people are having children later and staying employed longer. It’s just as natural now to find over-50s raising first children in infancy as it is for them to be admiring grandchildren. There are those entering early retirement, those still working, those starting entirely new careers, and those becoming new parents.
Jane de Teliga, fashion and style editor of The Australian Women’s Weekly, believes the shift both in lifestyle and life expectancy has had an important impact on the way in which boomers prefer to be approached. “Life expectancy has changed radically in the last 30 years. Women are expected to last through to their 80s, so it’s perfectly reasonable to be looking forward to a career change at 50 or 60. They’ve done their stint in the corporate world and are branching out to do other things.”
One principal group emerging have been coined The Wild Elderly, a label they would, no doubt outwardly detest, and secretly like. Many of these over-50s are kid-free, financially independent and are more often than not, single. Baby boomers, freed from the shackles of former responsibilities such as family and work, are looking for the fun and freedom found in driving sports cars, sailing around the Mediterranean and backpacking throughout Europe.
Thirty-five year old sixty year olds
De Teliga feels the pain of the misunderstood boomer. “We’re physically, mentally and emotionally very different from the generation of 30 years ago…. Our outlook, what we see our lives being. We’re the product of the 60s. We invented cool, and we won’t let it go. What retailers have to understand is that the boomers are never going to be old in their own mind; they are always going to think of themselves as cool.” Recent surveys suggest that three in four over-50s feel no more than 75 percent of their chronological age.
Income also appears to bear little relevance in an environment where over-50s’ spending power is often determined more by return on assets rather than earned income.
So, if the over-50s are spending up big, why does the marketing business still behave as though the Justin Timberlake fan club occupies the commanding heights of commerce?
De Teliga believes our advertising industry is partly to blame. “A lot of the marketers and designers don’t target us because the majority of them are in their 20s and early 30s and don’t understand our generation. People are still imagining that baby boomers equal classics. We’re the first people of this age that aren’t obliged to dress like matrons.”
Philip Putnam, a creative director at Desire, points out that marketing to the over-50s will be recognized as a key industry trend for the first decade of the 21st century. The potential returns “from tapping into the wealthiest generation in the world” are clearly demonstrated in the US where dedicated 50+ marketing (e.g., Nordstrom, Harley Davidson) has been underway for a decade.
Putnam says, “I think [Australian] advertisers and media are behind. People are still trying to work out where they’re going with it. It’s going to explode.”
According to the ABS, people aged over 45 represented only 45 percent of spending in most categories in 1989, but this figure will grow to 55 percent by 2009. People aged 45 to 54 represented 20.5 percent of spending on recreation in 1989; this had grown to 25.6 percent by 1999. The figures are very similar for food, clothing, and many other categories. Meanwhile, boomers’ parents, the Silent Generation, are dying off, and inheritances with spell the largest intergenerational wealth transfer in history.
In addition, according to the National Centre for Social and Economic Modeling, more than 37 percent of the nation‘s wealth is held by the four million Australians born between 1946 and 1960, up from 33 percent in 1986. In contrast, the share of total wealth held by 25 to 39-year-olds declined from 27 percent to 19 percent over the same period. People aged 45 to 64 also represent 52 percent of total population growth. No wonder researchers postulate the product of Australia‘s first 15-years post-war prosperity was the wealthiest generation of the 20th century.
From misconception to no conception
One perception that contributes to the mass resistance to this generation is that their brand preferences are calcified, they have an already overstocked larder, wardrobe and garage, and little interest in the kind of spending that makes marketers merry. Marketers who back the theory that consumer choices are locked in by the age of 35 are ignoring the essential truth that people constantly change—whatever their age. As people age, the rationales behind decision-making and choices change as well.
Putnam is defensive of an agency’s role in marketing to this generation, arguing that change must come from the source. “Before the advertising community considers how to communicate with older audiences, it either needs something to sell to them, or a client brief that specifies over-50s as a new targeting opportunity.”
Take financial services as another example. Recent UK brand launches include Egg, Smile, IF and Cahoot. None of these are targeted to the over-50s, despite the fact they are potentially a very lucrative market. So is it surprising that without the development of desirable and relevant financial products and services, the over-50s don’t change their bank accounts or investment options? Roberts suggests that the leaders of our banks, supermarkets and drug companies would gain a huge competitive advantage by adding disruptive innovations to their local offers and models.
Source: brandchannel.com
Contacts: paul@desire.au.com