Most of us have heard that the population of the United States is aging – but usually, this trend has a negative connotation linked with shrinking Social Security dollars. For businesses, though, the fact that baby boomers will make up 50% of the population within the next few years heralds a big opportunity. This group commands the largest amount of spending power in the country, and has the fewest financial obligations. This article will present some recent data on baby boomer spending, and will show how targeting this population might be a very smart move.
Biggest Population and Spending Power
According to a mid-2012 Nielsen report, baby boomers are the “most valuable generation” in the United States. Adults born between 1946 and 1964 presently make up half of the population of the U.S., and that number is growing at a rate almost three times that of the 18-49 age demographic.
That’s all well and good, but how much money can adults who are heading into retirement really be spending, right? It turns out that answer is a lot. Nielsen found that baby boomers are essentially a goldmine for any business looking to increase their sales with targeted marketing. Why? Consider these stats:
- By 2017, adults over 50 will control a full 70% of all disposable cash in the United States.
- By 2022, the baby boomer generation will have inherited as much as $15 trillion from parents and older spouses.
- Just over two thirds of baby boomers surveyed by Nielson said that they plan to spend more time on their hobbies post-retirement, spending at a higher rate as they do so.
Spending Habits of Baby Boomers
So what, exactly, have baby boomers been doing with all of this disposable income? Outspending younger generations on pretty much everything is what they’ve been doing. Immersion Active compiled information from a number of studies and offers the following information:
- Older adults spend over $400 billion more than younger generations each year on consumer goods.
- Adults in the 55-64 age bracket are outspending younger adults in restaurant purchases, personal care, entertainment, and gift purchases.
- Baby boomer women spend upwards of $20 billion each year on clothing alone.
- Home-care is a big spending category for baby boomers: over a quarter of them invest in landscaping services, and they’re 21% more likely than other groups to spend over $10K on home improvements. A full 10% of national home improvement spending is currently going towards helping seniors make their homes more accessible as they age.
- An infographic from visual.ly also notes that baby boomers make up 47% of cruise guests, and about two-thirds of all museum visitors. Baby boomers are also just about tied with Generation X in terms of how many weekly online purchases they make, far outstripping the online purchases of Millennials.
Baby Boomer Women
This group in particular presents a huge opportunity for businesses offering relevant products and services. I have, of course, written extensively about the fact that women control upwards of 80% of household purchases, but women of the baby boomer generation control huge spending power and have the fewest obligations out of any age group of women. She-conomy’s “Facts on Women” page has a special focus on baby boomer women, and offers the following information:
- As a whole, women over the age of 50 have a combined net worth of $19 trillion.
- Women between the ages of 55 and 75 hold a unique position: having been tasked with looking after families in their younger years, now-empty nesters have become the biggest consumers of luxury, security, and convenience items in the country.
- Women over the age of 50 spend, on average, 250% of what the population in general spends in any given year, including purchases of technology-related items, cars, and various financial services.
So if you’re planning on marketing to older adults, be sure to focus heavily on your female audience, who are likely to be the biggest spenders. In any case, the baby boomer generation is one demographic you absolutely do not want to ignore, given their huge amounts of disposable income and desire to spend it in multiple categories. This group will only grow in coming years, so get on your baby boomer marketing strategies now before your competitors beat you to it.
Is your business marketing to baby boomers? What have you found the spending habits of older adults to be like?
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