Report: Retailers missing out on big opportunities with Baby Boomers

New York -- Retailers in the United States are taking a huge risk by underestimating the buying power of the over-50 generation, according to a new report by the Fung Business Intelligence Centre.
 
The study, “A Booming Opportunity: Profiling from a Graying America,” finds that the aging Baby Boomers will continue to be a growing consumer market for the next 20 years.

"Just as they have at every other stage of their lives, Boomers are now redefining what it means to be old," said Deborah Weinswig, executive director-head of global retail and research at FBIC. "On the whole, they are healthier, richer and more active than previous generations of older Americans. Younger Boomers (ages 55 to 64) earn and spend more than the average U.S. consumer, and significantly more than the avidly courted Millennials."
 
On average, younger boomers outspend Millennials by nearly $8,000 annually and the typical consumer by $5,000, with spending occurring across most categories. Boomers will control more than half of all dollars spent on grocery foods in 2015, with a particular focus on health and wellness, and also spent $1,500 more than the average Millennial on eating at home, entertainment, household furnishings, pet supplies and personal care.

Yet just 10% of U.S. marketing dollars target this demographic as preconceived notions of aging linger, according to the report.

"A persistent myth about older adults is that they are baffled by high-tech devices and shun the digital world," the report noted.

The grandparent market also will be a huge source of potential retail sales, with reports estimating that the number of grandparents will increase from 65 million in 2010 to 80 million in 2020.

One rare area where Boomers have limited their purchases, women's apparel, may simply be the result of lack of product.
 
"Older women, especially those in professional jobs, are limiting apparel purchases because they are frustrated with the current styles and selections available, which seem to them as either too dated or too youthful," the report said. "Achieving the right balance for this customer is a tricky proposition, but we view this as a major opportunity for innovators in the industry."
 
Huge retail potential also exists in the beauty/skin care, fitness, entertainment and health-food markets, as well as in home furnishings and home improvements as Boomers fight aging, yet adapt their surroundings to accommodate different needs.
 
"Given its sheer size and economic clout, the 50-and-older demographic will remain the dominant and most influential consumer group for years to come," Weinswig said. "As they align their lifestyles with their needs Boomer consumers will continue to reshape the marketplace, opening up fresh opportunities for imaginative product development, tailored customer services and innovative marketing strategies. Forward-minded companies are rethinking the tired presumptions about older customers and finding new and lucrative ways to reach them."

For more information, and to download the full report, visit Deborahweinswig.com/publications.

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