A "Booming" Opportunity
June 1, 2006
A “Booming” Opportunity
By Renee M. Covino
Are marketers focusing on the Baby Boomers of today? Ignoring them could be a trillion-dollar mistake.
“It’s not often that a group of 76 million people comes around that not only has money, but is willing to spend it.” That is Todd Hale, senior vice president of consumer insights for ACNielsen, speaking about a generation of spenders that candy marketers would be wise to get reacquainted with: the Baby Boomers, the oldest of whom are just turning 60, but still have a combined spending power of a whopping $1 trillion per year, according to Time and Business Week. Boomers also represent over 27 percent of the U.S. population and make up 46 million households.
And yet, some confusion surrounds this generation now that the eldest are starting to enter “senior” status — will they continue to spend their money?
Why wouldn’t they? — is the better question. They certainly have the wherewithal and the mindset to spend, say the experts. And they are used to being targeted by marketers. It would be a great mistake to brush them aside now — just when many of them are experiencing the empty nest syndrome with children flying off, and in many cases, parents dying off. How foolish of marketers to abandon these “ultimate consumers” now, just when they’re really focusing back on indulging themselves.
The problem is that prior to the Boomers, “many advertisers felt that the over-50 market is not worth pursuing. They focused on the 18- to 49-year-old marketplace; now, many are beginning to realize the spending power of Boomers,” explains Peter Koeppel, founder and president of Koeppel Direct, a direct response advertising agency based in Dallas that analyzes various target markets and finds better ways to reach them.
In his research, Koeppel also found that Boomers are surprisingly not very brand-loyal; something marketers just assumed of “older” generations. “Boomers are experimenters and are not locked into specific brands,” Koeppel maintains. “In fact, they are more willing to switch brands than other segments of the population.”
How might this relate to candy? Candy marketers shouldn’t assume that new items, limited editions, and even more “kid friendly” confections will be a turn-off to Boomers. They are not locked into favorite/nostalgic treats at the exclusion of trying something new; in fact, they have a very youthful attitude when it comes to product/brand experimentation. The industry should strongly consider marketing to them specifically when unveiling new brands/line extensions.
Other marketing surprises are revealed in a host of issues that surround the Baby Boomers.
The work issue
Contrary to popular belief, not everyone turning 60 is longing for retirement or event thinking a lot about it — least of all, the Baby Boomers. “Baby Boomers have delayed or transformed every life-stage transition they’ve ever been involved with, and they’re likely to do the same for retirement,” writes Peter Francese in a recent American Demographics report, which he founded as a regular section in Advertising Age. “Besides the fact that nearly one-third had later-born children that may need college tuition paid, there are other reasons why they will almost certainly delay retiring; the most important is that nearly 60 percent of older Baby Boomers are professional, managerial or other white-collar workers.”
The average income in households headed by 50-to-59-year-olds is $75,000 a year, and in many cases, they’re making more than that and enjoying their work, according to the American Demographics report.
“The Boomers have redefined every age they’ve moved through, so there’s no reason to believe they will not redefine the stereotypes of what it means to be retired,” said Pat Conroy, vice chairman and national managing principal for the consumer business practice at Deloitte & Touche, Indianapolis, in a recent New York Times article on advertising to Baby Boomers. “Depression babies saved, not spending unless it was necessary. But because this generation grew up in prosperity, they don’t have that bunker mentality. They’re not worried about putting money in the mattress.” As a result, he said, marketers will thrive by “appealing to the possibilities that lay ahead for them.”
The health issue
Another Boomer controversy is being uncovered in the area of health and nutrition. Conflicting information about fats, chocolate, and other buzz words connected to diet and health is leaving more than half “confused and mystified” about how to take care of themselves, finds a new survey of 1,086 Baby Boomers, “The Healthy Boomer Survey,” conducted on behalf of http://www.eatbetteramerica.com/.
Although Boomers are actively searching for simple ways to stay healthy, half of all Boomers surveyed find it difficult to stay current on all the new health and nutritional information. Additionally, more than four out of 10 Boomers are over-whelmed by all of the inconsistent health reports and they feel that they hear too much data about health and nutrition that is not relevant to them.
The message to candy marketers is this: Health and nutrition info shouldn’t be forced; if the confection is merely an indulgence, so be it. Boomers love to indulge.
Of course, that still leaves room for confections formulated with sugar substitutes and dark chocolate candies to push those health angles that are legitimate and fitting to this group.
“Given the fact that a third of all Boomers are overweight and about 30 percent are obese, their growing affinity for sugar substitutes in place of the real thing makes sense,” says Hale. “With one in four Boomers monitoring what they eat, the reasoning why this group is 42 times more likely than the average household to purchase sugar substitutes becomes crystal clear.”
“Boomers, while just as likely to like candy as anyone, are also more health- and weight- conscious than many,” adds Mitchell Goozé, president of Customer Manufacturing Group, Inc., based in Santa Clara, Calif., and an expert on marketing, specifically in the health-food industry. “To that end, positioning the dark chocolate products as healthful would be optimal for them,” says Goozé.
The youth issue
It is the Boomers who have recently coined the phrase “60 is the new 40,” and clearly, they have always valued and probably always will value, youthful energy and spirit. But that doesn’t mean they wish they were 20 again, and marketers should understand the distinction.
Despite what some marketing messages have indicated, “Boomers aren’t obsessed with being young again, so ads targeting them don’t need to feature people in their 20s,” says Koeppel. There are more important factors than chronological age. “They want to look and be healthy; they want to live better.”
According to Time magazine, Boomers fully expect to live to 100.
“Boomers are going to age more gracefully than people think,” offers Chuck Nyren, creative strategist and consultant, as well as author of “Advertising to Baby Boomers.” “Don’t get me wrong, Baby Boomers still think we’re 15 years younger than we are, but we don’t think we’re kids anymore,” he says. It would be best if marketers just didn’t mention age — or getting older — in ads at all.”
Indeed, there is an aversion to age references with this group. Baby Boomers are “going into the ‘old age’ mentality kicking and screaming,” according to Cheryl Bridges, director of the Center for Retailing Studies at Texas A&M University. “One of the worst things marketers could do is emphasize their age. This generation grew up in the ‘60s and ‘70s. They were activists making big changes in the world regarding women’s rights, immigration, etc. They’re still savvy, and in their minds, youthful.”
“I don’t think any prior generation has wanted to be treated as if it were old, but there is a disconnect between age and how we, as Baby Boomers, behave and think. It’s dramatically different from the Bob Hope Generation before us,” says Goozé. “Our shopping behavior and buying patterns are much less ‘old’ that the previous generation.”
The value issue
Just because Baby Boomers like to indulge themselves, doesn’t mean they aren’t looking for a value. In fact, they are highly motivated by value, according to Zihlman. “Show a Boomer the value of what you’re charging them, and you have a much better chance of making that sale,” he says. “This is the whole idea behind Starbucks; it’s more expensive coffee, but Boomers, especially, perceive it as a great value. Perception and value works real well with Boomers.”
It’s true that this country’s biggest consumers “like to consume and show their affluence, maybe more so than other generations,” according to Koeppel. And so they place value on premium products. “Marketing premium chocolate, for instance, will work well on this generation; they’re used to buying upscale items,” he says. “Now they’re even more willing to experiment with new items that help them look and feel better, or just pick up their mood.”
But marketers should also remem-ber, “Free is still a powerful word to Boomers,” according to Edie Raether, another Boomer, and expert in marketing to Boomers with a recent book, “Forget Selling.” She says that the Boomer Generation is a group that likes “free sampling” and “free demonstrations.” Boomers also like bundling opportunities — products that are offered together at a value or limited offer, she adds.
The woman issue
The Boomer woman deserves marketing recognition all her own. Boomer women are taking on a greater role in managing not only their own money, but the entire family’s finances as well, according to Hale. “They are seven times more likely than the prior generation to share planning and financial decisions with their spouses,” he says. According to recent ACNielsen data, one in three women, or 33.3 percent, report they oversee family finances, compared to only 5 percent in 1962.
“Many Boomer women are at the peak of their earnings and love to spend; however, they are increasingly aware that they’re moving out of the marketing mainstream, and they’re not happy about it,” he warns. “Want to win the loyalty of these influential consumers? Give Boomer women the special treatment they feel they deserve.”
Maria Bailey is the author of “Trillion Dollar Moms: Marketing to a New Generation of Mothers” and spent over three years studying and researching the differences between Boomer women and Gen X, Gen Y and what she describes as Silver Birds. “We see that Boomer women are taking the time to reward themselves with health and self-exploration,” she says. “They are taking the time to discover the dietary needs of their bodies and finding alternatives that treat their bodies better.”
Bailey just concluded a large obesity study in which many of these female Boomers “told us they get most of their nutritional information from product packaging,” she reports. “They are taking the time to read labels, and for candy marketers, this means that they must use packaging more effectively.”
A Boon for Savvy Marketers
When many economists discuss Boomers, the conversation often strays to the “drain” they’re imposing on the economy, the future of social security, and rising health care costs. Perhaps marketers would be wiser to focus on facts such as the following.
Every 7.5 seconds, one of the more than 76 million Boomers in the United States turns 50.
Boomers own 80 percent of U.S. financial assets.
They spend 50% of their disposable income.
Projecting current spending levels to the future, the 55+ households will drive 31 percent of all-outlet spending in 2015.
By 2030, they will drive 34 percent of all-outlet spending.
Touching Boomers with the Biggest Bang
Appealing to the Baby Boomer market today does not have to be a hit or miss endeavor. Here are some of their top “touchpoints” as defined by industry experts.
The Internet. Boomers love the Internet, and according to industry experts, a large percentage of them are online with a high-speed connection. “Sixty percent of the general population has high speed, so for the more affluent Baby Boomers, that percentage will be much higher,” confirms Peter Koeppel, founder and president of Koeppel Direct, a direct response advertising agency based in Dallas.
Television is also a “traditional Boomer medium,” but lately, many commercials on the Internet are driving them from TV to websites. “Over half of the people watching TV are also on the Internet at the same time,” says Koeppel.
“The Boomers are in effect using more media than anyone; they were brought up with traditional print plus TV, and now they’ve expanded online and are becoming more tech-savvy, so there are overall more ways to reach them,” Koeppel explains. Just be careful not to annoy them. According to Don Zihlman, principal of
StreetSmartSelling.com, “We’re a generation that grew up with television and electronic marketing and therefore don’t mind if there are ads on web pages, etc. But most of us can’t stand pop ups or things that flash at us.”
Packaging. Marketers should consider packaging when considering Baby Boomers — and from more than one angle, too. “Baby Boomers are really into the packaging, but we go two ways,” says Edie Raether, another Boomer, and expert in marketing to Boomers with a recent book, “Forget Selling.”
Her two-sided packaging ideas — reminding marketers that Boomers are still “environmental hippies at heart,” especially the older Boomers, and thus they like recycled and clean, “green” packaging. At the same time, “Baby Boomers are really into attractive wrappings, especially the younger ones; they like packages that symbolize pampering and glitz to some extent.”
There is one negative side to packaging that candy marketers need to steer clear of when focusing on this generation.
“In England, they’ve done a lot of studies about ‘wrap rage,’ and it goes much deeper than not being able to open a bottle of medicine, for instance. It’s anything, any consumer goods packaging that people have trouble opening, and as Baby Boomers are starting to age, they are very sensitive to this,” says Chuck Nyren, who just happens to be another Baby Boomer and also creative strategist and consultant, as well as author of “Advertising to Baby Boomers.” According to him, “bad packaging can make Baby Boomers feel incompetent; as marketers, you don’t want to remind this group of people that they don’t have the physical skills they had when they were younger.”
Experiential Shopping. Baby Boomers have always been an entitled group, and they are “interested in spending their money on worthwhile experiences,” says Cheryl Bridges, director of the Center for Retailing Studies at Texas A&M University. She believes that the candy industry could really hone in on this. Or retailers themselves might consider coming up with ways to incorporate candy into a merchandising experience.
“They might think up cooking classes with chocolate or how to organize a grandchild’s party around a candy theme, how to entertain with candy,” says Bridges.
Yellow Pages. Baby Boomers are big Yellow Pages users (boomer usage indexes at 109 vs. an average of 100), but even more are yellowpages.com Internet users (usage indexes at 115 for boomers), according to Ken Ray, VP of marketing for Bell South Advertising and Publishing.
So what could this medium (both in its print and online forms) do for retailers and candy marketers who want to attract more Baby Boomers? For one thing, they could think in terms of new listings under targeted headings such as “Premium chocolate baskets” around Mother’s Day. “The beauty of the Internet and yellowpages.com is marketers can make continual changes to their sites, depending on the season, etc,” says Ray. As an example, coupons could be generated in late January, early February that offer 10 percent off Valentine’s Day candy.