2008 Consumer Spending Part 6

This time we take a look at the Baby Boomers:

Boomer Demographics: Five Things Retailers Must Know

Though members of the Baby-Boom generation are often lumped into a homogenous group by marketers, new research from STORES, the Boomer Project and BIGresearch uncovers differences among them that have important implications for retailers, STORES writes.

As a cohort, the 78 million Americans born between 1946 and 1964 spend an estimated $2.3 trillion each year on consumer goods and services.

An economic force to reckon with, Boomers lead differing lifestyles and are in different life stages; they also have diverse buying behaviors and varied political agendas.

Matt Thornhill, president and co-founder of the Boomer Project claims some retailers focus the bulk of their merchandising and marketing on young, less affluent adults. “Retailers that fail to acknowledge boomers today - thinking they’re past their spending prime - are limiting their success,” he is quoted as saying.

Below, findings of the research, as presented by STORES.

1. Older and Younger Boomers Are Different

The two groups have different frames of reference for decision-making, shopping, spending leisure time, cultural icons and involving themselves in media and popular culture.

Older Boomers (born 1946-1954) are more likely to…

• Remember John F. Kennedy’s assassination and the Vietnam War
• Have listened to Bob Dylan
• Be empty nesters (86%)
• Spend leisure time traveling and gardening

Younger Boomers (born 1955-1964) are more likely to…

• Remember Watergate and the Iranian hostage crisis as significant events in their younger years
• Have listened to Bruce Springsteen
• Still have someone under 18 living at home (36%)
• Participate, or have children who participate, in sports
• Spend time on kid-focused activities
• Say labels are more important to them while shopping (44% vs. 36% for older Boomers)

2. Single Boomers Have Clout

Though one-third of Baby Boomers, or 25 million people, head up single-income households, it doesnt mean theres only one person in the household. The average number of people in a single boomer’s household is 1.7; the average among married Boomers is 3.0.

Facts about single Boomers:

• 17% are divorced or separated.
• 3% are widowed.
• 14% never married.
• The average age is 51.
• The group consists of 48% men and 52% women.
• Their household incomes are 57% less than married Boomers’.
• They’re much more likely than married Boomers not to have preferences for particular retailers.

3. Boomers Value Both New and Traditional Media

Members of this generation use the internet, email and instant messaging. Some blog, some use iPods and many have PDAs. They also still read newspapers and listen to the radio, using a combination of both old and new media to make purchasing decisions:

• 95% watch TV, with 77% of their viewing occurring between 7:30 pm and 11 pm.
• Two-thirds subscribe to cable TV and are most likely to watch Discovery Channel, A&E, the Food Network, ESPN and Fox News.
• They don’t like reality shows.
• 76% listen to the radio - more than any other demographic.
• 49% listen to the radio during morning-drive time.
• Radio programming preference varies, from oldies to country to talk formats.
• 6% subscribe to satellite radio.
• 57% read their local daily newspaper regularly.
• 68% read their weekly community paper.
• 87% surf the internet, spending an average of 123 minutes online daily.
• 93% regularly or occasionally use the internet to research products before they buy them.
• 46% say online searches are triggered by traditional advertising or an article they’ve read; 45% are prompted by television or other broadcast media.

4. Grandparents Are Young, Active and Well off

Grandparents are frugal, but they are involved and ready to spend money on their grandchildren.

• 38% of Boomers, 28 million people, are grandparents. Another two million will join them this year.
• The average age of a Boomer grandparent is 53.4.
• More than 77% of boomer grandparents own their homes.
• 46% generate more than $50,000 in household income.
• More than a third belong to Sam’s Club, compared with 27% of all adults.
• Nearly 40% eat at a fast-food restaurant four or more times a month, and 24% say McDonald’s is where they eat most often.
• 35% say they exercise three times a week.
• 11% plan a major home renovation in the next six months.
• 50% say they plan to drive less because of high gas prices, yet 20% are considering a truck and 25% are considering an SUV.
• More than 25% plan to spend more money online over the next three months than they did in the same period last year.
• They buy toys for younger grandkids, then opt for gift cards as the kids get older.

5. U-Boomers Want Lots of Products at Reasonable Prices

Consultants McKinsey coined the phrase “U-Boomers” to describe the 24 million Baby Boomers who are “financially unprepared” yet unwilling to compromise demand for products and services. Though this segment is largely untapped by marketers, U-Boomers will account for almost 25% of total US consumption by 2015. Less-expensive, online delivery channels will make it easier to reach them.

Facts about U-Boomers:

• Two-thirds prefer to shop at bigger stores with lower prices.
• Roughly half prefer doing all their shopping at one store.

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