Don’t Discount Baby Boomers

Despite focus on Millennials’ buying power and preferences, Boomers continue influence spending.

March 24, 2015

NEW YORK – While much of the focus on spending has been placed squarely in the hands of Millennials, it may be somewhat misplaced, as Baby Boomers are still the ones controlling 70% of the disposable income in the United States, according to U.S. News & World Report.

The news organization launched a recent analysis of the Baby Boomer generation to find out more about the habits and preferences of the demographic, which makes up a quarter of its web traffic, by combining audience surveys and analytics with market research to better understand this generation’s unique place in the market.

Some of the findings:

  • Overall, 55% of consumer packaged goods purchases are made by Boomers. The same percent of this group say they remain loyal to brands they like.
  • Baby Boomers are expected to live longer than any previous generation, and they remain proactive when it comes to their health.
  • When it comes to leisure purchases, 70% plan to take an overnight vacation in the next 12 months and 49% of Boomers plan to spend between $1,000 and $5,000 for their vacations in 2015.

Likewise, a new report by the Fung Business Intelligence Centre (FBIC) states that U.S. retailers, who may be swayed by the omnipresence of Millennial marketing, are taking a huge risk by underestimating the buying power of Boomers. The study, “A Booming Opportunity: Profiling from a Graying America,” finds that the aging Baby Boomers will continue to be a growing consumer market for the next 20 years.

"Just as they have at every other stage of their lives, Boomers are now redefining what it means to be old," said Deborah Weinswig, executive director-head of global retail and research at FBIC, in a press release. "On the whole, they are healthier, richer and more active than previous generations of older Americans. Younger Boomers (ages 55 to 64) earn and spend more than the average U.S. consumer, and significantly more than the avidly courted Millennials."

According to the FBIC study, younger boomers outspend Millennials by nearly $8,000 annually and the typical consumer by $5,000, with spending occurring across most categories. Boomers will control more than half of all dollars spent on grocery foods in 2015, with a particular focus on health and wellness, and also spent $1,500 more than the average Millennial on eating at home, entertainment, household furnishings, pet supplies and personal care.

Yet just 10% of U.S. marketing dollars target this demographic as preconceived notions of aging linger, according to the report. The grandparent market also will be a huge source of potential retail sales, with reports estimating that the number of grandparents will increase from 65 million in 2010 to 80 million in 2020. Huge retail potential also exists in the beauty/skin care, fitness, entertainment and health-food markets, as well as in home furnishings and home improvements as Boomers fight aging, yet adapt their surroundings to accommodate different needs.

For more on how convenience retailers can — and should — do more to attract this valuable demographic, read “Golden Age” in the October 2014 issue of NACS Magazine.

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