Huffpost Business
THE BLOG

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors

Mark Bradbury Headshot

Can Boomers Save This Holiday Season?

Posted: Updated:
Print

As we enter another vital holiday season, one during which retailers stand to make 20 to 40 percent of their annual sales, marketers are under enormous pressure to spend advertising dollars wisely. Their stress is likely to be compounded in 2013, as pervasive economic uncertainty threatens Americans' commitment to holiday spending. Historically, marketers have courted younger consumers for holiday sales, and while that won't change this year, we are also likely to see marketers including the 50+ demographic in their game plans. For one simple reason -- in a post-recession world, they have come to realize that hitting year-end numbers means engaging consumers of all ages, not just younger ones.

Conventional wisdom dictates that people cut back on spending after age 50, but Boomers and older consumers have bucked this trend and earned their place at the marketing strategy table. Over the past three years, consumer spending among the 50+ set has increased by $181 billion, while spending among younger generations has dropped by $199 billion. Marketers simply can't afford to ignore this spending pattern, and can only benefit by increasing their 50+ ad budgets beyond the 10 percent they typically allocate to reaching this market.

Here are five key reasons marketers are taking a fresh look at the 50+ audience as a primary target for their marketing efforts:

1. Unrivaled Size and Spending Power
Let's start with the most important numbers. Fifty-plus Americans make up 44 percent of the adult population and, at nearly 107 million, are significantly greater than the Millennial (82 million) and Gen X (49 million) generations. While Millennials are burdened by college debt and an effective unemployment rate of 16 percent, 50+ consumers are thriving. They have a median net worth of $282,000, more than $100,000 greater than the median net worth of 18- to 49-year-olds ($176,000). Given their size and financial strength, it's no surprise that the 50+ demographic are responsible for nearly half of annual consumer expenditures, spending $2.9 trillion annually.

2. The 50+ Life Stage Triggers Heavy Spending
With money in the bank, children raised, educated and often starting families of their own, 50+ consumers are free to reinvent their lives in ways that were unthinkable to previous generations. They are taking advantage of this opportunity by making big-ticket purchases that reflect their dreams and desires at this life stage. Annually, they outpace other generations in foreign travel (spending $8 billion more) and home remodeling ($23 billion more). They buy more vacation homes. And, they are replacing the cars they needed with the vehicles they now want, including 73 percent of all hybrid cars and 34 percent of all motorcycles sold annually.

3. Boomers Heavily Influence (and Support) Millennial Spending
With lingering school debt and an anemic economy that provides limited opportunities to earn money, Millennials are unable to build their spending power the way previous generations of young adults did. In fact, 42 percent of this generation find their financial situations overwhelming, a trend that has resulted in roughly a quarter of adults age 18-30 moving back in with their parents. With their adult children financially strapped and back home, Boomers' financial strength will influence and underwrite Millennials' consumer decisions for years to come.

4. You Can Reach Them Digitally
The 50+ audience has embraced digital media as a tool that enhances their everyday lives and makes shopping easier. 75 million people 50+ access the Internet at home, up from 38 million ten years ago. According to a recent Google study, the 50+ set now spends more time online than they do watching television (19 hours a week vs. 16 watching TV). Social media is a major driver of their online use. In fact, adults 55-64 are exhibiting triple-digit growth in usage across the biggest social media sites, including Facebook (+110 percent), Twitter (+147 percent), and Google+ (+140 percent). Fifty-plus consumers are quickly embracing mobile -- they're seven times more likely now than three years ago to use mobile phones to go online (44 percent vs. 6 percent), and they spend 36 hours per month online using their mobile phones. Most importantly, the 50+ audience accounts for nearly 43 percent of online sales, which means that digital media plans will be highly effective when targeted directly for this population.

5. Long-Term Spending Domination
Reluctant to be defined by anyone but themselves, Boomers continue to create new norms for what it means to be age 50+. At the same time, medical science and healthier living have made it possible for Boomers to expect to live active, healthy, productive lives well into their 80s, 90s and beyond. As a result, rather than marking the beginning of the end, Boomers are recasting age 50 as a midpoint to an adult life that can easily last 30 to 40 more years. This is a game changer, as it creates an opportunity for marketers to influence spending for three or more decades beyond the three encapsulated by the 18- to 49-year-old consumers they exalt.

It is clear that 50+ Americans are the most powerful and stable consumer segment in the country, especially with Millennial spending on retreat. The winners of this 2013 holiday season will be the smart marketers who develop creative strategies around these facts and focus on building long-term relationships with the Boomer+ generation.