The “Baby Boomers” are Still Booming

The leading edge of the Baby Boomers, including Cher, Sally Fields, Donald Trump, and this writer, turns 55 this year. Born between 1946 and 1964, these 37 to 55 year olds make up a segment of the population that is still the fastest growing market in the country, and will continue to be well into this new century. For the past 25 years the Boomers’ ranks have grown far beyond those in any other age group, even leaving the nation’s prized youth market in the dust. Nearly 82 million strong, comprising a third of the American population, this group of our society is very significant to business, because it is also the segment with the highest percentage of discretionary income. The Boomers will live longer and are making more money than their parents did. They are the industry and professional leaders as well as the civic and government leaders. They have the money and they spend the money. The Baby Boomers are changing the definition of old age. Knowing the buying power of this huge market, what they expect and how to reach them can help you capture their business.

The Boomers, with over $100,000 average net worth and a median annual household income of over $60,000, are gainfully employed with established careers. The discretionary income of the older group, 45 to 55, is growing annually because their children are out of college, with families of their own. These Boomers over 45 have been described as “Beyonders” because they are beyond orthodontists, college bills, payment plans and mortgages. They have the disposable income to invest in retirement, to buy cars and boats and second homes. The “Beyonders” have 80% of the personal wealth in financial institutions, spend 50% of all discretionary dollars, hold half of the credit cards issued, buy 48% of all luxury cars, and make up 80% of the luxury travel market. And they’re still working, making more money and not about to retire.

Much has been said about the Baby Boomers’ retirement and its effect on Social Security, the health care system and the economy. Well, the Boomers aren’t as ready to retire as some may think. They aren’t looking for a gold watch and a pension check like their parents did. Retirement as we know it, is going to have a whole new look because tens of millions of Boomers plan to work beyond age 65. It is estimated that 80% of the Boomers want to work at least part time in their retirement. Only 16% feel they will not work at all. Close to half say they expect to devote more time to community activities and volunteer work after they retire. All in all Boomers are optimistic about their retirement years.

The Baby Boomers’ definition of their retirement seems to include a large measure of self reliance, which challenges assertions that held they were only concerned about the present. Less than half are counting on Social Security as a major income source and only 15% are expecting to rely on it for all their financial retirement needs They don’t want to depend on their children. Nearly 70% of the Boomers are looking towards self-directed income sources such as IRAs and 401(k)s for their retirement. Six in ten are counting on money from savings and investments as retirement income and two thirds of them are satisfied with the amount of money they are putting away.

Besides putting money away, the Boomers are spending it at a record pace, enjoying their life style. They are the least price conscious market, preferring quality and value instead. Being the largest segment of home owners, Boomers are furniture, appliance and home improvement product buyers. In many cases, this affluent group owns more than one home. Leisure related products are high on their lists, as well as recreation and entertainment. They generate the highest travel volume in the country, registering more than 260 million trips last year alone. They spend more on their trips than other age groups, averaging $460 per trip, excluding transportation to their destination. Boomers make up over 70% of cruise passengers.

The Boomers are also grandparents and are responsible for billions of dollars spent on toys and clothes for their grandchildren. Over 60 million grandmas and grandpas spent an average of $700 per grandchild in 2000, compared to $250 in 1988. That spending will increase dramatically in the coming years as more Boomers become grandparents; 72 million in 2005, 80 million in 2010, a 30% increase over 2000.

As Boomers age, they will be joining the ranks of the real “wired generation,” the 55+ crowd that is the fastest-growing market of computer purchasers. They are the most active users of the internet, with 71% on line. And they’re not just surfing, they’re shopping and buying. 92% have shopped on line, nearly 80% have made purchases.

Other hot categories for Baby Boomers are automotive, health and grooming products, hearing aids (they heard a lot of loud, rock music), home electronics, restaurants, real estate and retirement housing. The Boomers aren’t looking for “their father’s Oldsmobile”, they’re buying sports cars, SUVs, Harleys, boats, RVs, jet skis and snow mobiles. This “Pepsi Generation...for those who think young,” wants to keep looking and feeling as young as possible. They may be getting older, but they invented “cool” and they’d like to stay that way, so they’re buying record numbers of health and beauty products. They’re updating their sound systems, buying up their old albums on CD and looking forward to HDTV. Boomers are responsible to a great degree for the growing trend of out of home eating...they’re filling up the seats in restaurants even when they don’t get a senior discount. And they are starting to think about selling the big house and getting something smaller, with only about 21% planning to move to a new geographic location.

You’ll find the Boomers reading newspapers (Boomers make up the highest percentage of newspaper readers); listening to radio, especially news/talk, classic rock and standards; and watching television. This is the generation that used to watch test patterns when TV was first introduced...now they’re watching dozens of channels every day, especially news (early news because they’re going to bed earlier than they used to). The Baby Boomers are still the largest, most affluent marketing segment in business today. Reach them and put a Boom in your business.

5/31/01