Why Senior Citizens Are Pivotal to Ethnic Consumer Spending

Boomers and Seniors hold key to ethnic consumer spendingChildren have long held sway in regards to purchases made by the average American household--especially in regards to food and beverage products. Recent years, however, have seen moms' purchasing decisions increasingly influenced more by the internet and social media and less by the mouths of babes. According to market research publisher Packaged Facts, U.S. moms and the $200 billion they spend annually on food alone for their households are now so tuned into blogs and mobile apps when making purchasing decisions that marketers have had to significantly change how they engage moms as shoppers.

Yet with the steady rise of multigenerational households in the U.S., Baby Boomer (age 50-69) and senior citizen (age 70+) grandparents living with their adult children, grandchildren, and/or other family members are expected to wield substantial influence on the domestic front--at least from a purely financial standpoint. Packaged Facts data indicate that many Baby Boomers and senior citizens are generally much more likely to live in affluent households.

An article by Georgia Witkin that appeared on Grandparents.com asserts that "grandparents control more than three quarters of the nation's wealth." Moms may reign as the $200 billion queens of the food retail kingdom, but according to the national study, The Grandparent Economy, it's clear that grandparents en masse have become a fiscal force in other areas by spending:

  • $32 billion on their grandchildren's education

  • $11 billion on clothes for their grandchildren

  • $6 billion on toys

  • Nearly $700 million on diapers.

The message to marketers is clear: Advertise to the gracefully graying head of house, and you likely reach the entire home. This is true even in multigenerational households headed by minority Boomers and seniors. Though older African American adults typically don’t reside in affluent homes like various other Baby Boomers and seniors, they cannot be ignored by retail marketers as they still hold substantial sway as consumers in multigenerational household and shopping is very much front of mind for them.

Findings by market research company GfK MRI reveal that Baby Boomer African Americans are more likely to value having material possessions and a lot of money (44.8% compared to 34.0% for non-blacks).

Likewise, African American seniors were more likely to echo that sentiment (38.1% compared to 27.5% for non-blacks). Packaged Facts data reveal that African American Boomers are 31% above the norm to claim that they intend to make a big ticket purchase (i.e., a car, a major appliance, etc.) within the next 30 days.

According to the Census Bureau's American Community Survey, 4.3 million--or 5.6%--of the 76 million family households in the U.S. are multigenerational households. Among these multigenerational households, roughly 65% included a head of household, a child, and a grandchild. Multigenerational households have long been a part of the American family structure, but the establishment of these homes increased significantly during the recession as flocks of adult children moved back in with their parents during the recession (mostly for financial reasons).

Even with improvements to the economy, multigenerational households persist, especially among minorities. According to the Census Bureau, the percentage of multigenerational homes ranged from 3.7% for non-Hispanic White households to 13.0% for Native Hawaiian and Pacific Islanders. Over 10% of Hispanic and American Indian and Alaska Native households were multigenerational, while over 9% of African American and Asian households were the same.

According to an upcoming report by Packaged Facts on black consumers, African Americans are 12% above the norm for living in households with 3-4 adults. That number jumps to 55% above for African American Millennials between ages 18-34, who also are 82% above when living in households with 5 or more adults. But there is a "strength in numbers logic" to these arrangements, even when it comes to older African American adults.

Those living in multigenerational households are often better able to pool their resources together to counteract various overt deficiencies in their individual wealth. Marketers must seek to better understand how attitudes and beliefs vary--and they indeed often vary widely--between generations of African American adults, especially if adults from multiple generations reside in a household headed by a financially secure Boomer or senior African American adult.

To continue the discussion on the ethnic consumer spending market, join the new Packaged Facts LinkedIn group. It will be a great environment for engagement on a variety of topics surrounding the economics of minority households. Click below to join the group.

Join Minority Consumer Spending LinkedIn Group

 

Daniel Granderson

Daniel Granderson
Research Analyst

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Topics: Demographics