Monday, November 22, 2010

We've Got Money

But you don't talk to us?

Big-Spending Baby Boomers Bend the Rules of Marketing

Chris Bonney knows precisely when marketers abandoned him: the day he turned 55.

Until then, the consultant from Virginia Beach says, his opinion on new products was valued by a major marketing research firm that crunches consumer preference data. It would ask him to respond to surveys almost daily. But after his 55th birthday, the e-mail surveys abruptly stopped.

"The minute I turned 55, it was like nobody cared anymore," Bonney says. "I didn't change from one day to the next, but as far as they were concerned, I'd aged out of relevance."

Marketers traditionally have lavished the most attention on the 18-to-34-year-old set, believing their brand loyalties are more malleable so they can be captured as lifetime customers.

It's as if marketers all wear the same blinders. Because so many marketing executives are under 40 -- or even under 30 -- many presume most consumers not only think like them, but want to be like them, says Matt Thornhill, 50, founder of The Boomer Project, a specialty research firm. "They forget that people over 50 still have dreams," he says.

The traditional thinking among marketers is that older folks spend less, have little interest in new products and have brand preferences set in stone. But across the USA, the 77 million members of the Baby Boom generation -- folks born from 1946 through 1964 -- are turning that conventional marketing wisdom on its head.

As Baby Boomers are aging and accumulating wealth, their spending is growing at a pace that's leaving younger generations far behind. Spending by the 116 million U.S. consumers age 50 and older was $2.9 trillion last year -- up 45% in the past 10 years. Meanwhile, the 182 million people younger than 50 spent $3.3 trillion last year -- up just 6% during the same decade, according to an analysis for USA TODAY of U.S. Bureau of Labor Statistics data by The Boomer Project.

And unlike the stereotype of older consumers being averse to new things, Boomers are among the biggest buyers of new technology and new cars.

"Life doesn't stop at 49," says Peg Hudson, 59, a radio station sales rep from Greenville, S.C.

All this has some marketers taking a new look at older buyers and testing new avenues and products to tap into this gold mine. Among them: Unilever, which makes Dove soap and Lipton tea; General Mills; Lincoln; investment firm Raymond James; Best Buy; and Maidenform. Instead of treating Boomers like damaged goods, marketers for these products are notably celebrating them.

"Most marketing that targets Boomers presumes there's something wrong with them that needs fixing," such as age spots, wrinkles or erectile dysfunction, Thornhill says. "It's malady-based. For the most part, it's not accurate."

About to get richer
Marketers who ignore Boomers do so at their peril. For one thing, Boomers are about to get a lot richer. Maybe not as rich as before the recession, but richer nonetheless.

People 50 and older will inherit an estimated $14 trillion to $20 trillion during the next 20 years.

"This is something that will never happen again," says Brent Bouchez, founder of consulting firm Agency Five-0, which specializes in adults 50 and older. "What's more, this group will probably not leave a lot of that money to the next generation."

Among the things Boomers most love to buy: new cars.

Last year, consumers 50 and older spent $87 billion on cars compared with $70 billion by those under age 50, reports the Consumer Expenditure Survey from the Bureau of Labor Statistics. They buy more new cars, spend more on the cars they buy -- and even buy cars for their kids and grandkids.

"But can you think of any carmaker that really focuses on the 50-plus segment?" asks Thornhill. "Cadillac doesn't even do it anymore. The whole auto category thinks people over 50 are invisible. I just can't explain this. There's a major change afoot that most marketers are missing."

What they're missing is not just the spending power Boomers have -- it's their sheer numbers. By 2030, there will be twice as many people over age 65 as now, Thornhill says. One in seven drivers now is over 65; by 2030 it will be one in four.

"This is demographic dynasty," Thornhill says. "If you don't have a strategy for making your product relevant to 50-plus consumers, you will have a very rough time over the next 20 years."

Crafting a strategy for age-specific products -- such as seniors-only condos on a golf course -- is relatively simple. But making mass-market products relevant to Boomers is more like walking a generational minefield.

Marketers have to be careful their ads don't make Boomers feel like old fogies, and avoid talking to them as if they're under 30.

Here's how some marketers are trying to avoid that fate and are courting Boomers:

• Make them feel good. There was heated debate at Unilever over a proposal to extend marketing of its 53-year-old Dove soap brand to men -- particularly men 35 and older.

"Let's say it wasn't an idea that everyone said 'yes' to," says Lisa Klauser, Unilever's consumer solutions vice president.

But executives ultimately bought into the idea that self-confident men wouldn't be shy about using Dove products to help with dry and aging skin. After all, many had been using their wives' Dove for years.

The Dove Men Plus Care line got its initial ad push in February's Super Bowl and already has nearly 3% of the bar and body wash market -- a big win.

"There were certainly people who were skeptical of the idea," says Klauser. Not anymore.

• Make them feel hip. From 2007 to 2010, the average age of a new car buyer rose from 52 to 56. Lincoln saw its average buyer shoot past 60 in that time.

Lincoln's marketing challenge was to skew slightly younger -- into the mid-50s -- and also appeal to people in their 40s.

So it brought in 48-year-old "Mad Men" star John Slattery to help pitch its tech-loaded 2011 Lincoln MKX crossover SUV.

"Fiftysomethings can relate to him, but he's also cool to people in their 40s," says Matt VanDyke, marketing director for Lincoln.

The ads avoid conspicuous consumption and any "over-the-top characterization of luxury," says VanDyke. Instead, they focus on the MKX's Boomer-appealing intuitive technology. For example, ads show there's no volume knob on the radio -- you slide your finger across a touch bar.

• Make them feel smart. Raymond James is not a household name. So the investment firm decided it had to try outside-the-box marketing to capture Boomer attention.

Many Boomers are retiring without pensions, so managing their 401(k) and other retirement accounts is critical. "It's a huge need and a huge opportunity from a business standpoint," says marketing head Mike White.

So Raymond James recently began airing an ad with a woman who lives (and lives vigorously) to 187. She remarries at 100. And again, at 150. And she hang glides at 187.

Many Boomers seriously believe they may live into their 90s -- or beyond. "But if you told the same story about a woman who lived to be 90, it wouldn't be very interesting," says White.

Boomers relate to the woman who appears in the ad -- and actually is 80, says White. "They look at her and think: That'll be me in 20 years."

• Make them feel sexy. For Boomer women, "slimming, toning and smoothing becomes more relevant," says Lucille DeHart, chief marketer for women's lingerie maker Maidenform.

That's one reason the 88-year-old brand has created Boomer-appealing products intended to enhance one's shape and counteract gravity. Long gone are the days of girdles and corsets, replaced by undergarments with new materials -- and a new spin -- dubbed shapewear.

And sex appeal is part of the sell. Several months ago, Maidenform rolled out the Ultimate Push Up Bra -- a bra with lift, as well as enough padding to expand a woman's shape by two cup sizes. The bra is aimed at women ages 35 to 54 who "like the lift and definition," says DeHart.

The brand's shapewear also includes the all-in-one Fat Free Dressing line rolled out two years ago: tank tops and legging items that DeHart calls an "undergarment, shaping piece and apparel in one."

Key to selling these products, says DeHart, is to keep them fashionable. "We don't design older pieces for older people."

• Make them feel hungry. While Boomers may eat less as they age, they'll pay for quality. After hearing consumers say they wanted P.F. Chang's food at home, Unilever in April teamed with the Asian-food casual-dining chain on P.F. Chang's Home Menu meals for two. While they may seem a tad pricey for frozen meals at $7.99, Klauser says sales were nearly $14 million last month, so it's well on its way to becoming a $100 million-plus brand.

General Mills had a similar idea and, in September, rolled out Romano's Macaroni Grill frozen entrees for two.

Food marketers also are aware that Boomers' lives have changed, that some have health conditions that require diet changes and many are empty nesters. "We know the majority have had a trigger event that changes the way they interact with food," says John Haugen, vice president of health and wellness at General Mills.

So General Mills added a line of reduced-sodium Progresso soups. It's launched portion-control Green Giant veggies. And it's begun to increase type size on packaging targeted at Boomers.

• Make them feel techie. Boomers spend more on tech than anyone. They spent an average of $850 for their latest home computer -- $50 more than any other group, reports Forrester Research. "People presume that Gen Y is the most eager to adopt technology, but they don't have the spending power of Boomers," says Jacqueline Anderson, consumer insights analyst.

Bonney, the Virginia Beach Boomer, owns an iPhone, an iPod and a Mac. He particularly likes Apple's marketing because it speaks to his interests "and not to my age." Such thinking can help broaden any product's appeal. While few brands beyond the tech world think so successfully outside the box, Louis Vuitton, the designer brand, takes a similar tactic by featuring Bono in its newest print campaign and Madonna in a previous one.

Familiar celebs aside, few things capture Boomer interest more than tech. And few marketers are more aware of Boomers' tech interest than retailer Best Buy.

Spokeswoman Paula Baldwin says Best Buy tries to make its stores "touch and feel" places, which helps Boomers feel comfortable with new technologies. The chain's Geek Squad service -- which helps buyers set up new devices and get more out of them -- is heavily used by Boomers.

In a recent blog post, Best Buy CEO Brian Dunn, 51, who is a Boomer, noted, "I'm always caught off-guard by the assumption that Boomers hesitate to embrace technology."

Boomers do demand ease of use, he says. Apple's iPad "caused some bloggers to quip that this device is merely an iPhone for the elderly. To which I respond, 'You got a problem with that?' "

(Source: USA Today, 11/16/10)

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