People born into each era experience a unique set of historical events, culture, and social influences that define it. These experiences collectively influence the attitudes, behaviors, experiences, and emotions of that age group. The Baby Boomers have been one of the most influential age groups for over half a century. As they enter their senior years, they represent a powerful force in the economy, especially for those in certain sectors. As a business owner, it is important to understand this age group and how to deliver your marketing message to them.
Who Are the Baby Boomers?
Boomers were born from 1946 through 1964. This is a generalization when it comes to marketing because those who were born at the end of the boomer years might resemble Gen X more than boomers, or they might be a blend of the two eras. These numbers are used as cutoff points more for convenience than anything else.
For instance, if you were born in December of 1964, you are technically a boomer, but your peers might have been Gen X and had more of an influence on you. You might identify more with Gen X values than boomer characteristics.
If you want to reach them with your products and services it is important to understand how this age group thinks and makes decisions. If you are a boomer, this article might help you understand your drives and motivations a little better, too.
Who Were the Boomers’ Parents?
Boomers are situated between the Silent Generation and Gen X. This age group consists of those who were born between 1928 and 1945. For the most part, they are the parents and grandparents of the boomers. This group experienced the Great Depression, the Great American Dust Bowl, and World War II. In numbers, they are smaller than the age groups before and those that came after them. For the most part, they were children of the McCarthy Era. They learned to cope by keeping silent and adhering to strictly defined social norms.
The parents of the boomers were all about working within the system instead of trying to change it. They believed in working hard and not raising any attention to yourself. They tended to play it safe and not take risks. They expect products to last a long time, and they want to feel like they “get their money’s worth.” They tend to be “thrifty,“ which can come in the form of hoarding tendencies and “saving for a rainy day.” As the boomers began to come into the world, they undoubtedly strived to teach these values to their children.
Causes of the Baby Boom
The end of World War II represented a time of growth and prosperity. As a result, birth rates spiked around the world. Historians theorize that there are several reasons for this. First, the Silent Generation had put off having children due to the uncertainties they faced. With the war and the Great Depression over, they now felt more confident that the world would be a better place to raise children.
The confidence of the Silent Era age groups was further increased by rises in wages, business growth, and an explosion of new products and services. Those returning from the military could take advantage of the new G.I. Bill that allowed them to buy affordable housing in developments on the outskirts of cities. This would lead to the rise of the idea of the perfect suburban family where the husband was the provider and the wife would stay at home to raise the children.
New forms of consumer credit would allow families to purchase an increasing number of consumer goods from television sets to convenience foods. Much of the advertising targeted their boomer children. As boomers aged, they became disgruntled with the cookie-cutter lifestyle that had been presented to them and a counterculture began to develop in the early 1960s.
Major Boomer Influences
Boomers lived through major divisions between the extreme left and conservatives. They came to value freedom and a sense of individuality. They did not want to be defined by society, and many of them felt alienated from the materialism of their parents. Boomers were famous for their freedom of expression, and unlike their parents who were satisfied to work within the system, they wanted to change the system.
The 1960s and 1970s were a time of riots and social upheaval. Boomers saw social injustices and wanted to change the system. These growing demands for systemic change were met with greater resistance to the change. Boomers were caught between the conservative beliefs of their parents and the desire for change. They lived through the Cold War, the draft, the Vietnam War, Civil Rights Movement, and Woodstock. They also became more environmentally conscious, saw the rise of feminism, equal rights, and wanted equality for all.
Family structures changed with more single parents and divorced households. This created economic challenges, and by the 2000s, boomers were now middle-aged and starting to think about retirement. They began working aggressively towards their goals. Salaries rose, and so did the standards of living, but then the recession hit in 2008. This would cause hardships and significantly reduce the retirement savings of boomers. For many, it would leave them having to start over again with not much time left.
What Drives Boomers
The experiences of boomers and the influences of their parents created a unique set of values, wants, and needs. As a whole, they want individual choice. They do not want to be fed one-size-fits-all solutions. They want to be recognized and treated as individuals. Rather than relying on “the system” to take care of them, boomers took matters into their own hands. They created their own opportunities for income, and they took control of their health through lifestyle changes.
A growing number of boomers pay attention to diet and exercise, driven by a desire to enjoy life to a greater degree as they age. They also have less confidence in “the system” to take care of them in their elder years. Boomers are not afraid to work hard to get what they want. Starting their own businesses and owning their own homes are high priorities for boomers. As a group, they are confident in their abilities and adapt to change easily. (7)
Boomers value having a positive attitude, working well with others, and avoiding conflicts. (7) Many of them also value social responsibility and environmental responsibility in the products, services, and brands they support. Compared to millennials, they are not as outspoken on these issues, but they tend to vote with their wallets. (7)
What Is In Store for Boomers?
Boomers were born into an age of economic growth and technological advances. Better food availability and better medical care have allowed boomers to enjoy a longer lifespan than previous age groups. Now, we have come to a time where boomers are entering retirement age in mass numbers. According to the U.S. Census Bureau, by 2034, older adults will outnumber those under the age of 18 for the first time in the history of the United States.
Many boomers have worked hard all of their lives and are now a major force in the economy. According to AARP, boomers spend $7 trillion every year on goods and services (2), and this is expected to rise to $13.5 trillion by 2032 (3) Younger boomers, who are now in their late 50s, represent 54% of personal net worth. (4) Unlike previous eras, they are a force to be reckoned with in the economy.
The first boomers began to retire in 2012, but their retirement will be different from the way previous eras have spent their golden years. Boomers saw their parents work hard all of their life and then retire at the age of 65. There were more younger workers to make up for each retiree. Lifespans were shorter, so each retiree would have to be supported for a shorter time. Now, they are living between 10-25 years longer than their parents, so their retirement period will be longer, and the workforce ratios of younger workers to retirees have shifted.
Another difference in how boomers retire is that they are healthier, have more money, and many of them are enjoying an active lifestyle that includes travel and adventure. They are not satisfied to sit back and watch television for long hours of the day. They are moving to small towns instead of retirement communities where they are starting their own businesses and choosing to continue working. (5)
Are You Ready to Take Advantage of the Longevity Economy?
This change in the way boomers retire has developed what is now called the “longevity economy.” Boomers are not passively sitting around watching the years go by. They are moving to cities where there are more opportunities for entertainment and cultural attractions, but for many, this is not by choice. Many of them have little to no retirement savings. They are choosing to move to places where they can take advantage of public transportation and lower costs of living. (5)
According to a recent study, one-third of all boomers plan to retire after age 70, and some do not plan to retire at all. (6) Nearly 45 percent of all boomers currently have no retirement savings. (6) Of those, many did have retirement savings at one time but lost them for some reason. Many of them who are still working also report that they have not taken advantage of contribution plans like 401Ks with company matching. (6) What this means is that they are healthier, living longer, and staying in the workforce longer, but they do not have the savings level and preparation for retirement of previous age groups.
Another factor that influences boomers is that the investment strategy that worked for their parents and grandparents will not work for them. Boomers are faced with higher inflation and secure, low-risk investments, such as bonds and CDs, will not work for them. They often have to take advantage of riskier investments with a higher potential for gain. (5) Fortunately, they now have more opportunities for investments that might help to fill the gap.
Meeting the Challenges of an Aging Boomer Market Segment
The situation that boomers face presents both challenges and opportunities. While boomers crave activities, social connections, and experiences, they also are on a tight budget. Those who can spark the interest of boomers and give them what they want at a reasonable price are set to take advantage of these opportunities.
Catering to the social needs of boomers presents many opportunities to capture the attention of this age group. Another area that holds promise is providing for their medical needs as they age. Products that help them maintain their independence longer and have a better quality of life is another important area that offers a wealth of opportunities.
Financial services is another area that will appeal to many boomers. Many of them feel that they have some catching up to do when it comes to preparing for retirement. Boomers know that the strategies that worked for their parents will not work for them, but many of them do not know where to start.
Financial advisors and wealth-building products that cater to the needs of boomers are another area that will appeal to a growing number of this age group. They are more open to taking risks than the Silent Era age group, but they are still not willing to carelessly throw their money away either.
By now, you should have a good idea of where boomers have been and where they are going. For those who are ready, boomers have a lot to contribute to the economy and offer excellent opportunities for those who are willing to take the time to understand them. Whether you are a boomer yourself, or you want to know more about how to connect with them in your business, hopefully, this article has given you a better understanding and a place to start.
Boomers are unique, and you will find that those born earlier are quite different from those born in the later years of the era. They are less homogeneous than previous age groups, and your strategy for attracting them needs to take a more personal approach.
If you can appeal to their sense of individuality, then you have a good start. Most of all, you need to offer them quality over quantity, and you cannot expect them to be as concerned about keeping up with the crowd. If you keep these things in mind, you are set for taking advantage of these opportunities and for providing the products and services that will allow them to enjoy a better quality of life in future decades.
References
(1) United States Census Bureau. “2020 Census Will Help Policymakers Prepare for the Incoming Wave of Aging Boomers.” https://www.census.gov/library/stories/2019/12/by-2030-all-baby-boomers-will-be-age-65-or-older.html
(2) AARP. “AARP Announces Longevity Economy Accounts for $7.6 Trillion in Economic Activity Up From $7.1 Trillion in 2013.” https://press.aarp.org/2016-09-20-AARP-Announces-Longevity-Economy-Accounts-for-7-6-Trillion-in-Economic-Activity-Up-From-7-1-Trillion-in-2013
(3) Forbes. “This Marketplace Is Over $7 Trillion And Rising—Seven New Products And Services This Consumer Will Need From Future Entrepreneurs.” https://www.forbes.com/sites/bernhardschroeder/2020/05/14/this-marketplace-is-over-7-trillion-and-rising-seven-new-products-and-services-this-consumer-will-need-from-future-entrepreneurs/
(4) Marketing charts. “Baby Boomers Possess the Majority of US Household Wealth.” https://www.marketingcharts.com/demographics-and-audiences/household-income-107999
(5) Investopedia. Baby Boomer. https://www.investopedia.com/terms/b/baby_boomer.asp
(6) Insured Retirement Institute. “Boomer Expectations for Retirement 2019.” https://www.myirionline.org/docs/default-source/default-document-library/iri_babyboomers_whitepaper_2019_final.pdf
(7) SeniorLiving.org. “The Baby Boomer Generation.” https://www.seniorliving.org/life/baby-boomers/