Way to shop
When it comes to spending their money, what do boomers want? Bargains or high-end goods? Coupons or personal shoppers? Vacations on the cheap or luxurious getaways?
The answer? All of it.
Not for the first time, marketers and retailers alike are scrambling to understand the contradictions of the massive post war boomer generation that encompasses people born from 1946 to 1964.
The generation that drove cultural trends from Howdy Doody to the Beatles to the SUV is now defying traditional marketing ideas about how an aging population wants to live and shop. With the oldest of the nearly 90 million Canadian and American boomers turning 60 this year, retailers are being forced to rethink the premise that the fifty-plus crowd have mostly left their earning and spending years behind them.
Boomers are becoming first time parents in their 40s and going to graduate school in their 50s. Many plan to start second or third careers at an age when their parents were retiring. Boomers, in fact, thrive on change and reinvention. Take a look at technology: they did not grow up with the Internet but for many boomers it has become anecessity for shopping, catching the news, researching medical conditions and vacation destinations, finding old or new relationships and of course, scoring the best bargain.
And according to a report in The New York Times, the older boomers get, the younger they seem to feel. In a recent Roper survey, boomers under 50 were asked “how old is old?” Their answer was 68. And the perceived old age for boomers over 50? For them, it set in at 78.
In the past the lucrative age segment for marketers was considered 18 to 49. But the sheer number and spending power of the baby boom generation are forcing companies to break with tradition and keep them in their sights.
As reported in The National Post, Canadians aged 40 to 59 will earn close to double what those aged 27 to 39 will make in 2006. According to market researcher Euromonitor International, 32 per cent of Boomers earn more than $54,000 a year, making them the most richly compensated group of consumers. But this doesn’t mean they aren’t careful with their money, say industry consultants.
“Even though many of the Baby Boomers’ kids have left home and their financial circumstances may be improving, some are getting their kids through college and they have also come out of an era where they have been relatively frugal, and it takes a while to turn that around,” Ed Strapagiel of Toronto retail consultancy Kubas Consultants told The National Post.
In fact, adults aged 50-64 are more likely to use coupons and participate in special promotional offers and retailer reward programs, such as the Optimum points card from Shoppers Drug Mart.
And baby boomers are big comparison shoppers, seeking the best price on commodities such as paper towels – yet they will splurge on luxury items and upgrades to higher-end appliances, such as $699 barbecues.
Reflecting this trend, the Toronto-based luxury retailer Holt Renfrew has implemented several Boomer-friendly initiatives in recent years and as a result, is enjoying unprecedented sales growth. These incentives include creature comforts such as an in-store spa, concierge service and gourmet restaurant. Holts has also doubled the number of personal shoppers at its nine stores in the past two years, a free service that has become enormously popular.
Other retailers have come up with offerings for “budget-conscious, luxury-loving” boomers. Last Christmas, for example, US discount giant Sam’s Club offered an inflatable entertainment centre with a screen measuring 13 feet by 15 feet for $6,999 (US) and an 82-carat diamond wreath necklace for $263,574 (US). All this in the same place where you can get a great price on a case of dishwasher detergent.
Other retailers to give a nod to boomers include the Canadian-based Reitmans which has recently launched a new chain at women over 40. And at Home Depot Canada Inc., the do-it-yourself home improvement retailer has embraced an increasing number of “do-it-for-me” boomer customers.
“[Baby Boomers] were one of the segments that we started services for, not because they can’t do it but because they’ve ‘been there, done that,’ and they can afford it,” said Nick Cowling, head of public affairs for the retailer.
The Canadian division of Home Depot now installs kitchens, bathrooms, windows, flooring and a number of other home renovation projects. And the company has partnered with Canada’s Association for the Fifty-Plus (CARP) to recruit retirees, especially retired plumbers, building contractors and other trades people to work as floor associates.
Home Depot has also targeted older customers with initiatives such as the ‘Independent Living’ program, developed for customers who want to stay in their homes as they age. The program is geared to revamping living space to accommodate safety ramps, wheelchairs and other devices.
“Boomers are determined not to go into a nursing home – ever,” says David Cravit, Senior Vice President, The 50Plus Group, which operates www.50plus.com and produces this newsletter. “They intend to live independently – and this will trigger a boom in products and services that enable them to do that. Watch for a flood of new technology around the issue of medical monitoring. This trend is just getting started.”