At the recent Boomer Business Summit in Washington, DC, I shared the podium with Steve Parker, SVP Marketing, firstSTREET, a direct-marketing company targeting “Boomers & beyond” with “solutions to aging related problems.” We spoke at a session entitled a Broad View of Trends in Commerce: Who, Why and How They Will Buy, and delivered the important news that Baby Boomers (aged 52-70 years) still represent an important consumer demographic that marketers ignore at their peril.
Time to recognize Baby Boomer customers are still an important, high-spending demographic
My talk, Shopping Boomer-Style, focused on how retailers can tap the sizeable discretionary income Boomers still have to spend. Steve’s session, Trends in Commerce for the Longevity Economy, explained that while many of his company’s offerings aim toward the most senior of seniors, many Boomers are facing challenges like stiff joints, sore muscles, aching feet, less keen vision and weakening hearing. Everybody, sooner or later, becomes a lifeSTREET target customers, to paraphrase John Lennon, aging like life “is what happens to you when you’re busy making other plans.”
Look at Boomer’s Incomes
The income numbers tell the story about the still strong spending power of Boomers. With 2014 the most recent years available in the U.S. Census, the five-year periods reported do not exactly conform to the generational cohort, but any variations amount to rounding errors and so are good enough for ‘government work.’
Household incomes rise and fall predictably with age, reaching its peak from 45-to-54 years of age. In 2014 that means GenXers (45-49) and Boomers (50-54).
But looking at the number of households in each five-year age segment, the number of Boomer households 50-54 years (4.3 million) exceeds that of the 3.9 million GenXers aged 45-49 years.
And since the huge Boomer cohort is on the higher-end of the income range, and GenXers on the lower end, the total number of affluent households (top 20% from $100k+) remains heavily weighted toward Boomers (43% of total affluents) as compared with GenXers (34%).
Net/Net: Boomers will continue to dominate the affluent consumer segment for at least the next five-years, and probably the next ten, given their penchant to keep working and not retire as previous generations at 65 years.
Trends in Commerce for the Longevity Economy, according to Steve Parker, firstSTREET
In his talk, Steve made clear that the longevity market which his company targets includes Boomers, as well the over 70 year olds, members of the Swing and WWII generations. But no matter which cohort a marketer targets – Millennial, GenXer, Boomer or Swing/WWII shoppers — Steve says,
While we are only in the 3rd inning, the game is already over…Digital shopping has won and Amazon is the MVP. Everything else is niche or surviving in increasingly smaller pockets.
Shoppers of all ages have come online to disrupt every sector of the retail economy, offering 24/7 availability, immediacy, portability (thanks to mobile), interactively, price transparency, and the ability to precisely target customers. “Today all marketers try to differentiate by product, selection, price, delivery and guarantees,” Steve says. “But Amazon already has beat or matched all of us on ALL of these…or will soon.”
The ‘white space’ where marketers can differentiate and compete against the power of Amazon is service. Steve concludes, “Amazon is a self-service model. Seniors remember and prefer service.”
Service is the key, offering human interaction, relationship, understanding and empathy, all valued not just by the Boomers, but by everyone – young, old and middle-aged. Hard is it might try, Amazon can never beat it. The proof: Try to call Amazon to talk to a person about your order. Good luck!
Why Boomers – and Everybody Else – Likes to Shop on ‘Main Street,’ not the Malls
If Amazon is the competitor to beat and Baby Boomers still an important customer target, the way to compete is through service. This gives small specialty retailers a huge competitive advantage.
Yet, when you talk with retailers, they remain fixated on product exclusivity and price as their chief competitive challenges. But as Steve makes crystal clear that “game is already over.” Retailers cannot win on product or price anymore. The way to retail success and growth is through service and building personal relationships with their customers. The internet and social media is a tool to foster such relationships, but retailers must start on their shop floor.
That is what my new book, Shops that POP! 7 steps to Extraordinary Retail Success, is all about; how today shoppers’ needs have changes since anything they want to buy is immediately available online, and probably at lower cost. That turns the idea of shopping from being about buying a product to going to the store to have a shopping experience.
Today success at retail is less about WHAT you sell, and more about HOW you sell it. Retailers that don’t understand this are doomed to fail. Retailers need to create extraordinary customer experiences in their stores and specialty independents that personally know their customers have a huge advantage to exploit.
While ‘big box’ retailers and national chains have ‘big data’ about their customers and can use it to drill down to identify narrow customer segments and to specify products each customer is likely to need, they can’t look that customer in the eye, shake their hand and give them a smile that forges a personal bond that translates into customer loyalty for life.
More Help Marketing to Boomers
More resources are available to help you succeed marketing to Boomer customers:
- Download Boomer Presentations: If you’d like to see Steve’s or my presentation from the Boomer Business Summit, you can download a copy here. #BoomerSummit @WhatsNextBoomer
- 7 Steps to Retail Success: Order a copy of my new book, Shops that POP! to learn the 7 steps to retail success
- Find New Boomer Customers: Map a path to new Boomer customers by delving deeply into the needs, desires and motivations of your existing Boomer customers. Unity Marketing’s three step market research approach reveals the demographics of your customer base, their purchase behavior and spending patterns and their motivations and attitudes as consumers. These insights will give you a bridge to connect with new customers with similar needs and spending patterns and grow your business. Call me at 717-336-1600 or email firstname.lastname@example.org to get started.