The Baby Boomers
There are six generations alive in the U.S. today. Assuming that for the most part the GI and Silent Generations are retired, very soon we will have four very different generations (Baby Boomers (ages 51-70), Gen Xers (ages 35-50), Millennials (ages 15-35) and the newest iGeneration (now teenagers) working side-by-side for the first time in history. That’s due, in part, to the fact that people are living and working longer. These four generations will also be customers, with very different values, experiences and styles. They will likely also partake in very different kinds of activities. This is both exciting and challenging. How can a business manage such diverse audience of customers and employees? Knowledge is key.
Today, we’ll look at the Baby Boomers (born 1946-1964). Of all the generations living in the U.S. today, the most well-known and well-documented is probably the Baby Boomers. Born from 1946 to 1964, Baby Boomers were the children of either the GI Generation or the Silent Generation. The parents of Baby Boomers were patriotic, respectful of authority and accepting and trusting of government. Those parents also believed in absolutes, sacrificing for the greater good and following the rules. But the age of conformity, sacrifice and towing the line ended with the arrival of the Baby Boomers. Boomers are known to be mavericks, bucking trends and taking risks. What’s more, even what was known about this generation a decade ago is still evolving. Meet the “Me” Generation.
Big Generation Makes Big Waves
One simple reason why the Baby Boomer Generation has been studied and documented so faithfully is because of the sheer size of this group. There are approximately 80 million Baby Boomers in the U.S. today. By comparison, there are only 46 million Gen Xers, the generation following the Boomers, (which is an even smaller group than the Silent Generation that preceded the Boomers). Therefore, every business owner, manager and employee should really understand this cohort. In many ways, they revolutionized American culture.
Baby Boomers came of age during a time of major changes in the world. One of the biggest changes was the advent of television as a main medium of information and entertainment. The Baby Boomers were the first to grow up influenced by what was broadcast into living rooms, including images of the Vietnam War on the nightly news. They also watched the Watergate scandal unfold, forcing Nixon to resign. It was also the first generation to see space travel realized. And it was the generation that migrated, en masse, from blighted cities and came of age in new, clean, cookie-cutter suburban neighborhoods.
Surrounded by fresh suburban neighborhoods but seeing a tumultuous world around them, Baby Boomers became the first generation to openly challenge authority, questioning everything, rejecting the status quo, and demanding social change. In the midst of a Cold War, they turned their back on conflict. Finding their voice and collective energy, they were seen by some as idealistic. They opposed human rights violations and demanded government accountability. The fledgling Civil Rights movement of the 1950s flourished with Boomers in the 1960s. Sit-ins. Marches. Rallies. Boomers also protested the Vietnam War. College campuses became hotbeds of fresh perspectives and radical ideas. Counterculture movements and activities thrived. Whether out of idealism or rebelliousness, Boomers railed against the establishment in every way. Music. Art. Literature. Attire.
In turn, the Baby Boomer generation was also the first to say no to sacrifice and embrace selfish pursuits. They unapologetically focused on their own personal wellbeing, whether it was career success, self improvement, personal gratification, or health and wellness. Dubbed the “Me Generation”, many Baby Boomers focused on acquiring money, title and recognition for themselves. The term “Yuppie” originated in the 1980s when Baby Boomers were mostly in their 20s and early 30s. Short for “young urban professional” or “young upwardly-mobile professional”, the term referred to young college-educated adults who had jobs that paid well and lived and worked in or near a large city. The Boomer generation is considered one of the most privileged and pampered in U.S. history. With such a focus on ‘me’, it makes sense that Boomers were also the first group to embrace divorce.
The oldest Boomers are now starting to retire. By the end of 2015, Americans 50 and older will represent 45% of the population Over the next 20 years, 74+ million Baby Boomers are expected to retire; approximately one every eight seconds. How will these Boomers handle aging and retirement? How will it affect their purchasing habits? The Census Bureau shows that 38% of men and 27% of women ages 65-69 were still in the work force in 2013, and that means half were still working at age 67. Moreover, 27% of men and 19% of women age 70 and over were still working in 2013. So while Boomers may want to embrace retirement like the preceding Silent Generation, and don’t want to work til death like their GI Generation grandparents, they may be forced to work longer because the economic downturn wiped out a portion of their savings and a lot of the equity in their homes. Whereas before the Great Recession, Baby Boomers were the most affluent generation in America, after the Great Recession the Silent Generation became the most affluent. While the Silent Generation is comprised of cautious investors, the Baby Boomers are risk takers, which hurt them financially during the downturn. The good news is that the Bureau of Labor Statistics is reporting that job growth for people 55 and over is at 4.1%, which is four times the overall rate. The bad news is that a lot of those jobs are contract positions for limited amounts of time.
There are a number of ways that Boomers are different than preceding aging generations. First, unlike many elderly who moved to Florida decades ago, Census data shows that only 1.6% of Boomers moved across state lines in 2010. Most Boomers are staying put or moving within the vicinity of their old home. That may change as more Boomers retire. At the moment, the few Boomers who are retiring / moving are not heading to Florida. They are moving all over the country.
Also, needing to make up for lost time and net worth, Boomers are investing more in stocks. Beginning in 2013, Boomers jumped into the stock market as money in equity funds grew at the fastest pace since 2000. Boomers now own 54% of total mutual fund assets, according to the Investment Company Institute, raising the overall individual net worth of Americans to $70 trillion, a recovery from pre-bust levels. This has helped Boomers financially, allowing them to regain some of what they lost in the recession.
However, Boomers aren’t spending that money just yet. In fact, a 2011 report by Bankers Life and Casualty’s Center for a Secure Retirement says that half of Boomers have cut back on their spending and reduced credit card debt. A third of Boomers have paid off their mortgages. Many have cut their credit cards, closing accounts. This is likely a combination of a post recession hangover (shock from the loss of net worth and jobs) and a desire to have enough money saved to be able to retire. Moreover, Boomers don’t expect to inherit their wealth. An AARP study indicates that 80% of Boomers do not expect to inherit anything and less than 7% will inherit over $100,000 from parents. These factors will surely have an impact on the retail, financial, and real estate sectors.
In the same way that they won’t be retiring until later, this group is also not expected to slide quietly into old age. To their dismay, they are now the “old people” they rebelled against in their youth. Just as this group revolutionized lifestyles at every stage of life, it’s expected Boomers will – and are already beginning – to change what it means to be an aging and retired person in America. In fact, a term is already buzzing to redefine active aging Boomers with zip as Zoomers. In the world of Boomers, a Zoomer is a 65-year old person with the mind of a 45-year-old and heart of a teenager. However, most Boomers are not Zoomers. The same ‘me-focused’ Boomers, who were the first to embrace fitness, are also now in worse physical shape than their parents and grandparents. They are paying the price for their life of comfort. Unfortunately, Boomers lead the country in a wide range of measures including obesity, disability, high blood pressure, chronic illness and more. Companies focused on providing medical care, elder care, and pharmaceuticals should see an uptick as Boomers age.
Marketing to Baby Boomers
While the buying and online habits of Millennials seems to dominate the news, their buying power pales in comparison to the buying power wielded by Baby Boomers — approximately $3 trillion in just the U.S. alone. So while they aren’t spending as wildly as they used to, Baby Boomers do have money to spend. However, the strategies used to reach Gen Xers and Millennials probably won’t work for Boomers. Though an estimated 79% of Baby Boomers regularly use the Internet, less than half use Smartphones to check email or go online. However, the majority shop online and younger Boomers do engage in social media using a desktop, laptop or tablet computer. So mobile ads may not necessarily be the best way to reach Boomers, but online shopping, SEO, social media advertising, and paid ads on Google can be very effective with this audience.
Boomers like to do research and be well-informed before they purchase a product or service. When selling to Boomers, it is important to explain the product/service and its value, without being aggressive or patronizing. Explain how the product or service solves a problem. With this audience, it is important to tell the story of how the product/service makes life easier, better or more enjoyable. Marketing materials should include a phone number, an email address, social media links and the website so it is not just easy to find, but easy to read. When a Boomer reaches out with a question, respond quickly.
Also, leverage a Boomer client’s reach. Boomers are much more likely to refer a company that they like. In return, companies should reward customers with discounts or perks for referring family members and friends. It should also be made very easy for them to share a product or service through email, or social media.
Final words of caution. It is important to understand that not all Boomers are the same. As with marketing to any large group, the members of this generation can vary significantly, especially between the older and younger members of the group. A working 51-year-old Boomer is much more likely to be using a Smartphone to check email, monitor the home alarm, post to social media and more. Whereas, a 69-year-old retired Boomer may only use a cell phone to make calls and take photos. So, rather than targeting all Boomers, it is important to further segment the marketing to those most likely to purchase, or be interested in, the company’s products or services. Then the company should identify which communication channels will most effectively reach that audience segment and develop messaging that will appeal specifically to them. After all, the entire point of generational marketing is to deeply understand a demographic group’s profile in order to speak to them in a language that reaches them and that they understand.
Quote of the Week
“And in the end it’s not the years in your life that count. It’s the life in your years.” Abraham Lincoln
© 2015, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.