In the competitive world of retail, the word “millennials” is heard often and loudly. The question of how to appeal to the millennial buyer is at the forefront of discussions among retailers. However, in the quest to appeal to this important segment of consumers, it’s wise not to overlook another important segment: the Baby Boomer generation. While Baby Boomers have different interests to millennials, in certain ways marketing to Baby Boomers is more important and can be more financially rewarding.
Baby Boomers: Diamond Interest
Retailers, particularly online retailers, may find it difficult to obtain data about their consumers, such as their age. Due to the fact that millennials are more technology oriented than their older counterparts, retailers may believe that millennials purchase more online than do Baby Boomers. However, research is showing that this is not the case. According to a report from Limelight Networks, 49% of 52-70 year-olds spend 11 hours or more shopping online, while only 42% of those aged 19-35 spend the same amount of time. In addition, while Baby Boomers ranked shopping in their top four most important online activities, millennials ranked it fifth.
The Wallet Potential of the Older Generation
Marketing to Baby Boomers is extremely important as Boomers generate the largest portion of spending in the U.S., accounting for 51% of total spend. According to the AARP, Boomers spend approximately $7.6 trillion per year in the retail market. Experts say that marketing dollars would be better spent targeting Boomers than millennials due to the fact that in today’s generation, couples are waiting longer to get married, and fewer people are having children than ever before. This means that by the year 2047 the greater percentage of the population will be over 60, rather than under 15.
Currently the Baby Boomer generation, aged 50 and up, controls almost 70% of all disposable income flowing through the economy. In fact, according to a report by Consumer Expenditure Survey, Baby Boomers accounted for $2.4 trillion in annual income in 2016, and equivalent of 42% of all after-tax income in the United States.
Where the Two Shall Meet
It’s vital that retailers understand the differences in buying behavior between Boomers and Millennials. Boomers prefer multi-brand retailers and traditional stores, such as Costco and Home Depot, while millennials show a strong preference for app-based options. So how can retailers find a balance between the two – and should they? In many ways there is an overlap between the two diverse groups. Many Baby Boomers, having spent their younger years working hard for everything they have, are looking for an experience, something that enhances quality of life, which is very similar to the worldview of millennials.
So, what does all this mean for retailers? To whom should they market and how? Finding a middle ground for marketing to the two groups would be ideal. Why focus on one segment, to the detriment of the other? Rather, retailers should target their marketing strategies, focusing on which product lines sell best with each segment, which age group is spending their time on particular media channels, and using tools and resources that help to finetune the sales presentation in store and online. And remember, despite the endless advice about marketing to millennials, statistics show that the Baby Boomer generation are a key segment for diamond and jewelry retailers.