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.
Starbucks to open 3,500 stores across Americas; unveiling new Express format
Seattle — Starbucks Corp. remains highly bullish on expansion. In remarks at the company’s annual shareholders meeting, the coffee giant revealed that over the next five years it plans to open 3,500 locations in its Americas region and 8,000 new stores in foreign markets. And just in case you were wondering … Starbucks noted that Shanghai has more Starbucks stores than any other city in the world in which it operates.
Speaking at the meeting, Cliff Burrows, group president of the Americas and Teavana, said the past year has been “a tremendous year for growth (for Starbucks) – in fact probably the best.”
“We are currently at just over 14,000 stores across the Americas and that number will grow by 3,500 over the next 5 years,” Burrows said.
Starbucks is opening a new smaller, take-away only footprint especially focused on meeting the demands of customers in urban locations during the morning peak. The first Express location is scheduled to open in the company’s second quarter, in New York, with four additional stores on tap by year end.
“This new format will open up new doors in places we haven’t been able to go before, “Burrows explained.
The company is also looking to grow its domestic food sales.
“By the end of 2019 we will double food sales in the Americas through breakfast, lunch, snacks and the Evenings program. We will grow our food business in the U.S. from 18% to 25% of revenues by the end of 2019 adding an additional $2 billion to our base business,” Burrows said.
On the international front, Starbucks said the China and Asia Pacific (CAP) region will account for over half Starbucks new store growth globally over the next five years, led by Japan and China.
China is Starbucks’ fastest-growing global market is China, where it plans to up its store count from the current 1,600 locations to 3,400 stores in the next five years.
Williams-Sonoma launches first mobile app
Williams-Sonoma is looking to appeal to its increasingly digital savvy customers with the launch of a free recipe tool for smartphones.
The retailer, in collaboration with Weldon Owen Publishing, a division of Bonnier Corp., and Culinate Inc., has released the Williams-Sonoma Recipe of the Day app on Apple's App Store.
"Chuck Williams, our founder, contributed to more than 100 cookbooks over the last three decades, and our new app will help share his passion and knowledge of cooking with a new generation of Williams-Sonoma fans," said Williams-Sonoma President Janet Hayes.
The app delivers a seasonally appropriate recipe every day of the year, from a selection of Williams-Sonoma's starters, salads, sides, soups, main dishes, and desserts. The app's built-in search tools allow users to filter recipes based on course, season, technique, ingredient, or dietary preference (vegetarian, vegan and gluten-free). A recently released iPad version of the application has been consistently featured by Apple as a "Best New App" and it has remained in the top 10 of most popular applications in the Food & Drink category.
The William-Sonoma Recipe of the Day app's highlights include:
- Recipe inspiration for every day of the year
- An easy-to-use search function allowing users to narrow searches by key ingredient, type of dish, cooking technique, and more
- Simple-to-use, smart shopping lists
- Color photographs
- Custom timers
- A favorites feature that keeps track of your favorite recipes
- All-inclusive functionality; no internet connection required (except for occasional subscription content updates)
Williams-Sonoma Recipe of the Day offers monthly or annual subscriptions. The base app, which is free to download from the App Store, includes a month's worth of recipes to give a sampling of what is available for subscribers. The recipes are organized using convenient calendar layouts that allow users to find the most recent recipes as well as browse previous recipes.Recipe of the Day aims to become the go-to app for home cooks seeking an answer to the perennial question, "What's for dinner tonight?"
Jennifer Newens, associate publisher of Weldon Owen, said: "The first Williams-Sonoma branded recipe app, Recipe of the Day, will not only resonate with readers familiar with the Williams-Sonoma branded cookbooks, but also with a new, digital-savvy audience who has yet to discover Williams-Sonoma recipes."
Williams-Sonoma operates more than 560 retail stores.