Go ahead Baby Boomers, make my decade. In fact make everyone’s decade. No really, we need you to. We’re counting on it because frankly our retail infrastructure may not survive without you. Yeah, yeah, Millennials are the future and Generation Xers are doing their part to build on the foundations paved by previous generations, but you Boomers still have the economic Midas Touch. Looking ahead even four years into the future, it’s evident that as go Boomers so goes America.
Travel with me if you will to the year 2020 — no DeLorean time machine necessary (my apologies to Marty McFly and Doc Brown). A sliver of clairvoyant market research courtesy of Packaged Facts’ American Consumers in 2020 is all we need for the journey.
As you can see, marketers and retailers are dealing with a very different consumer in 2020. On average, household heads are older, less likely to be non-Hispanic white, and are more likely to be women. The average consumer — except for those in multicultural population groups — is living in a smaller household and is probably even living on his or her own. Meanwhile, the kids and teens market has an increasingly multicultural look because of a sustained decline in the birth rate among non-Hispanic white women.
While the youth market has lost buying power due to the decline in the population of 18- to 24-year-olds, the population of the age 55+ group has increased by almost 11 million since 2015. On top of that, the aggregate income controlled by Boomers is a hefty $4.1 trillion. This amounts to 33 percent of total aggregate income in the U.S., up from 31 percent roughly five years ago. By comparison, the percentage of aggregate income at the disposal of Millennials is a mere 26 percent, up only 1 percent since 2015. Consequently, 2020 is the year of the Baby Boomer.
In past years, many marketers understandably persisted in targeting younger consumers in the interests of cementing their brand loyalty at a relatively early age. But that strategy may have been a tad shortsighted. In 2020, marketers targeting the youth demographic have found slim pickings, while companies offering products and services to older consumers have found better opportunities. Now more than perhaps any time in recent memory, most everyone considers Boomers to be an undervalued consumer segment with substantially greater assets compared to consumers in other age groups. In essence, robust consumer spending in 2020 has been heavily dependent on whether Boomers continue to spend on discretionary items.
Now I know what you’re thinking, “People get older, retire, and as a result consumer spending declines and focus shifts to necessities such as housing and healthcare. History has proven this time and time again.” But these Baby Boomers are slightly different than previous generations. Do they value the necessities in life? Certainly, but we saw even back in 2016 that older Americans were beginning to display an above-average propensity to spend on discretionary purchases such as furniture, entertainment, and new cars (especially recreational vehicles). Those tendencies have persisted into 2020!
In fact, in an age where technology has dampened consumer reliance on traditional forms of retailing, Boomers have been a ray of hope for brick-and-mortar retail outlets. The sheer size of the Boomer generation encompassing adults age 55-74 years old in 2020 gives them an advantage even over the seniors of the Silent Generation who are equally as likely to shop at brick-and-mortar stores. Younger Boomers in particular have registered an outsized impact on the profits of retailers, especially department, home furnishing, home improvement, and office supply / computer retail stores.
And as far as concerns about leaving the labor force, you’ll notice that many Boomers have reconfigured traditional definitions of retirement in ways that have only enhanced their spending power as they have aged. The notion of retiring at age 65 has increasingly been cast aside, even if that means working at least part-time for the purposes of income and health benefits. The motto for many Boomers has become “the best retirement program is to work as long as possible.” In many regards, the continued engagement of Boomers in the labor force over the past several years has had a positive impact on the economy. The desire — in some cases the need — of Boomers to remain employed has helped mitigate many of the effects of our nation’s slowing population growth coupled with our aging population.
So as we can see, Boomers are up to the task of safeguarding our future economic well-being. Should Boomers usurp the title of America’s greatest generation? Hard to say. But what’s for certain is that they embody one of the greatest hopes we have looking forward to the year 2020 and likely for a period beyond … well, at least until the Millennials put down their iPhones long enough to make a run at the title.
Find out more about American Consumers in 2020.
Daniel Granderson
Communications Manager
MarketResearch.com
