After a witty comical video about millennials, Maureen Azzato, chief brand officer and editor of HFN, addressed the differences between millennials, Boomers and Gen Xers for creators of new products for these groups. She pointed to demographic trends that marketers should focus on for the growth of consumers over the age of 50. Boomers have the greatest disposable income and are yet to inherit significant estates.
She introduced Peter Hubbell, CEO of BoomAgers, a former advertising agency executive with more than 30 years of experience with major international brands. Hubbell queried the audience to reveal that the room was primarily filled with Boomer listeners who believe they are living the most exciting period in their lives. At the same time, Boomers are surviving constant disruption as an interruption of the normal.
Disruption is nothing new; it’s constant. He began by telling the story of his 1980s work with reinvigorating the classic KitchenAid stand mixer when the challenge was to sell more of an appliance that was meant to last a lifetime. At that time, the disruption in home design presented the Great Room as a transformation of the traditional kitchen. Concurrently, the Food Network emerged and excited viewers about food. KitchenAid revitalized its iconic product with color and reformatted its marketing message to reflect the product’s status as a serious cook’s tool and a home décor item.
What Do the Numbers Tell Us about Boomers?
Hubbell outlined key statistics on global aging. The world’s population is aging rapidly, with massive impact on health, public finances and national policies. By 2050, the number of people over 65 worldwide is expected to double to 1.5 billion. Such adults will outnumber children under the age of 5. Hubbell calls the phenomenon The Longevity Economy, which is the sum of all economic activity serving the needs of Americans over 50. This economy equals $7.1 trillion, which is larger than any other country’s total economy, with the exception of China.
He sees businesses making deeply flawed strategic choices by aiming their marketing budgets toward millennials. Companies are seduced by the staggering potential of millennials, which distorts today’s reality. Yes, millennials are digitally native, social and connected and they are the future of consumption. Millennials may represent the future but the future isn’t here yet. Marketers must manage the gap between Boomers and millennials and deal with the true nature of consumer segments today.
What about Millennials?
The first group of millennials will enter their peak earning spending years in 2020, but most not until 2030. Today, 75% can only buy what they need, not what they want. 45% are not employed and 40% receive financial assistance from their Boomer parents, 23% bear college debt. Millennials are postponing milestones: in 1970 the median age for marriage was 23 and in 2010 it is 30.
Ownership to Access
Boomers aspired to the material life and yearned for houses, cars and luxury goods. The opposite is true for millennials: 60% of millennials are indifferent to owning a house, 85% don’t see owning a car as a priority and 90% are indifferent to luxury goods.
The old paradigm of ownership has transformed to a new paradigm of access. Welcome to the “sharing” economy. Millennials can change their closet forever by renting clothes and jewelry, skip hotels by couch surfing with locals, and rent Zipcars and call Uber for transportation choices. Detroit isn’t selling cars to millennials and may discover they are swimming naked when the tide goes out.
It’s Time to Fall in Love with Boomers Again
Boomers have the most and spend the most. They control over 70% of the nation’s purchasing power. They stand to inherit $15 billion in the next 15 years. They are not retiring and plan to work past 65 or don’t plan to retire at all. They are home-centric—they are exiting the workplace at the rate of 10,000 per day for the next 15 years and they are coming home. One-third of homes are occupied by at least one resident aged 60+ and 78% intend to age in place.
Not Getting Old, but Growing Old
The psychology of aging suggests that the older people get, the younger they feel. They are getting better with age and people of age believe they are ageless. Businesses must get better at marketing to age. Embrace the disruption in the world. Ask yourself, “How do I win them over?” These are the savviest, most experienced consumers out there.
Boomers associate joy and confidence with aging. They value physical, emotional and spiritual well being. At this stage of their lives, they have experience, wisdom and intelligence. They see aging as the future of living and they are mapping new purposes for their lives. They are not stopping—they are starting new directions. They are not retiring, but re-wiring. As the quantity of life remaining decreases, the focus on the quality of life increases. They are simplifying and streamlining. Boomers may be downsizing to get equity out of their homes and use that money for fun, but what they are really doing is embracing simplicity and refocusing. They are telling their kids to “Come get your stuff out of here, I want to be free of it. The dumpster has been scheduled.”
Creating New Strategies
Practical strategies can’t ignore consumers of the future who are the millennials. Who to choose with your limited resources? Millennials or boomers? The big spending years for millennials are 10-15 years away, by which time Boomers will be less relevant. Create strategies for how to bridge that gap.
The average age of a CEO is 57 and the average age of an ad agency account creative is 27. Who will you listen to? Some major brands that wanted to update their offerings have made poor choices by choosing millennials because they represent the future and in so doing, lost their core audience.
Market to a balanced portfolio. On Madison Avenue, a portfolio is a bag of a person’s best creative work. On Wall Street, financial advisors structure portfolios to diversify investments in order to maximize long-term gains and minimize risks. Madison Avenue can learn from Wall Street.
As with a balanced portfolio that includes cash or government bonds along with emerging market holdings, use analytics to identify discrete audiences for discrete, high-impact messages.
Millennials are a high risk/long term investment; Boomers are low risk/short term. Focus on your brand and determine what consumers want.
The Conversation Continues
Lively questions from the audience allowed Hubbell to expand on misconceptions about Boomer characteristics. On Boomers and Gen X segments—large population groups favor their established brands and buying habits. How do new brands and products get them to change brand preference?
Hubbell: These are two biases I often hear. People somehow still believe that the younger consumer is more valuable to a marketer because this is an opportunity to capture lifetime loyalty. But loyalty as a concept is under siege. Many believe that older people are set in their ways and actually the opposite is happening. Older is no more loyal than their younger counterparts, 72% of sales in Apple stores are to Boomers. This brand signals vitality.
On the social connectivity of millennials: Older women want a smartphone so they can see photos of their grandchildren. Do Boomers use Facebook to make purchases? Boomer media habits and practices still include heavy use of TV and print, but 82% of Boomers are on Youtube; the growth is dramatic. Boomers use Facebook heavily, they actually spend 10% more time than millennials on social networks to see what’s going with their friends, even though they are not creating and posting content. Boomer presence in digital is growing dramatically, but their digital behavior is very different. We may need a new language to describe this media mix, but it’s still sight, sound and motion messaging. Mass media is shifting to online video and pop-ups are everywhere.
In an industry focused on products, audience members asked about services. High tech in retail is increasing important, Hubbell described. Hover around the Apple Genius bar to see the percentage of Boomer customers. With aging in place, services are more important. A savvy retailer like Walgreen’s is no longer a mere purveyor of products but will continue to innovate more in home services. Boomers also care about experience in retail—they want to ask a person a question and not only engage with touch screens.
And of course, millennials and Boomers influence each other’s brand choices in a two-way dynamic. Mothers and daughters, and fathers with sons, still like to shop together!