Opportunities Abound for Marketers Who Target Older Americans
In 2012, A.C. Nielsen published a white paper titled, Boomers: Marketers’ Most Valuable Generation. Nielsen postulated that as more Boomers aged out of their prime income earning years, they would move from a life dedicated to making money to one that is directed at spending money. At that time, seniors controlled more than 70% of the total net worth of American households and represented 50% of all consumer spending, according to the U.S. Small Business Administration.
Fast-forward to 2023. Are Boomers still the most valuable market segment?
Demographic Growth of the Boomer Segment
To start, there are simply more Boomers in America than there used to be. 17.7% of the population is 65 or older, according to the Census Bureau. That’s up from 13% in 2010! And this trend will continue into the next decade.
Boomers Are Still Outpacing Younger Cohorts When It Comes to Spending!
As you might expect, Boomers continue to control 70% of total household net worth and still represent about 50% of consumer spending.
Furthermore, the Bank of America Institute published a research report in October stating that Boomer spending growth in 2023 remains significantly stronger than Millennial spending growth. There are a lot of reasons for this. First, Boomers receiving Social Security payments enjoyed an 8.7% cost-of-living adjustment in 2023 – the largest percentage increase in four decades – to offset the inflation America was experiencing. Conveniently for Boomers, inflation cooled at the same time, meaning that Social Security payments not only offset the cost of inflation, but it exceeded it! While Boomers won’t enjoy a similar windfall in 2024, they will enjoy an additional 3.2% bump.
And there are more contributors to buoy Boomer spending:
Boomers enjoy greater net worth than younger cohorts, presently holding roughly $80-trillion of assets versus around $14-trillion for Millennials. They are simply richer!
High interest rates earned on savings and investments put even more cash into Boomers’ pockets.
Boomers as a cohort have less debt to pay down than their younger counterparts. They are less likely to have student debt and are more likely to own their homes outright.
And while a lot of Boomer wealth will ultimately be passed down to future generations, it’s clearly available for Boomers to spend on themselves now.
If Boomers Were Their Own Country…
To put American Boomer wealth into perspective, if Americans 50+ were a country, they would constitute the WORLD’S THIRD LARGEST ECONOMY – behind the United States and China, but ahead of India, Japan, and Germany. Yet, marketers continue to ignore them. According to A.C. Nielsen, seniors are the target of only 10% of all marketing activity, despite the fact they represent 50% of all consumer spending, as mentioned above.
Recognizing the discretionary dollars Boomers collectively have at their disposal, there are product and service categories that are positioned for success when targeting this affluent demographic group:
Financial Products – Boomers sitting on extra cash are likely to look to financial products – like CDs and treasury bills offering high rates of return – to put that idle cash to work.
Home Improvement Products – Boomers are staying in their homes longer than previous generations, often owning their homes outright or are enjoying low mortgage rates. Their commitments to remaining in their homes along with a pile of spare cash can motivate Boomers to remodel and upgrade their homes. In many cases, their remodeling will focus on making enhancements to help them age in place more comfortably.
Travel – Boomers make up roughly 20% of the population but account for 80% of travel spending – that’s roughly $150-billion annually! Boomer travel represents:
31% of all leisure travel vacations
80% of all luxury travel
72% of all RV trips
70% of all cruise passengers
The Boomer generation is the first generation that does not see travel as a luxury. They are in a place in life where they prefer spending on experiences more than spending on goods – and as already stated, they have the resources to do so.
Entertainment – The Boomer lifestyle requires two ingredients: money and the time to spend it. Boomers, as a cohort, have plenty of both! This makes them ideal candidates for entertainment opportunities, ranging from restaurants and recreational activities to movies and the arts.
Health & Wellness – Obviously, older adults spend more on healthcare and they are certainly aware of how they feel health-wise. Any product or service that contributes to seniors’ wellness and keeps them out of a doctor’s office will get their attention.
Boomers remain the most valuable market segment in America. Yet, most marketers ignore them, targeting younger, less affluent consumer groups instead. There is great opportunity – and not so much competition – for those who pursue this high value market.