U.S. RETAILERS MISSING “A BOOMING OPPORTUNITY”
Americans over 50 are healthier, more affluent than previous generations, yet remain underserved, says Fung Business Intelligence Centre’s
Deborah Weinswig in new report
NEW YORK (March 16, 2015) – Retailers in the United States are taking a huge risk by underestimating the buying power of the over-50 generation; in fact, the aging Baby Boomers will continue to be a growing consumer market for the next 20 years, says “A Booming Opportunity: Profiting from a Graying America,” a report issued today by the Fung Business Intelligence Centre.
The generation that ironically “didn’t trust anyone over 30” now ranges from 50 to
nearly 70 years old, but has radically different plans and attitudes from their parents for their senior years, says Deborah Weinswig, Executive Director-Head of Global Retail and Research at FBIC.
“Just as they have at every other stage of their lives, Boomers are now redefining what it means to be old,” Weinswig notes in the report. “On the whole, they are healthier, richer and more active than previous generations of older Americans. Younger Boomers (ages 55 to 64) earn and spend more than the average U.S. consumer, and significantly more than the avidly courted Millennials.”
The U.S. census reports that 12,500 Americans turn 50 every day, and the number of people aged 60 and older will rise 40 percent over the next 15 years. The median net worth of households headed by people aged 55 to 64 is $165,700, compared with Millennials’ net worth of $11,000, and these younger Boomers are in their prime earning years. The result is that on average, younger boomers outspend Millennials by nearly
$8,000 annually and the typical consumer by $5,000, with spending occurring across
most categories. Boomers will control more than half of all dollars spent on grocery foods this year, with a particular focus on health and wellness, and also spent $1,500 more than the average millennial on eating at home, entertainment, household furnishings, pet supplies and personal care.
Yet just 10 percent of U.S. marketing dollars target this demographic as preconceived notions of aging linger. Case in point: Boomers blast the stereotype of the older technophobe. The Census Bureau reports that nearly 87 percent of householders 45 to
64 years old own a computer, as do 65 percent of adults 65 and older.
“A persistent myth about older adults is that they are baffled by high-tech devices and shun the digital world,” the report says. “But Boomers have been enthusiastic users and creators of technology for their entire lives.”
The grandparent market also will be a huge source of potential retail sales, with reports estimating that the number of grandparents will increase from 65 million in 2010 to 80 million in 2020. One rare area where Boomers have limited their purchases, women’s apparel, may simply be the result of lack of product.
“Older women, especially those in professional jobs, are limiting apparel purchases because they are frustrated with the current styles and selections available, which seem to them as either too dated or too youthful,” the report says. “Achieving the right balance for this customer is a tricky proposition, but we view this as a major opportunity for innovators in the industry.”
Huge retail potential exists in the beauty/skin care, fitness, entertainment and health- food markets, as well as in home furnishings and home improvements as Boomers fight aging, yet adapt their surroundings to accommodate different needs.
“Given its sheer size and economic clout, the 50-and-older demographic will remain the dominant and most influential consumer group for years to come,” Weinswig concludes. “As they align their lifestyles with their needs Boomer consumers will continue to reshape the marketplace, opening up fresh opportunities for imaginative product development, tailored customer services and innovative marketing strategies. Forward-minded companies are rethinking the tired presumptions about older customers and finding new and lucrative ways to reach them.”
For more information, and to download the full report, visit www.deborahweinswig.com/publications/.
ABOUT THE FBIC GLOBAL RETAIL & TECHNOLOGY TEAM
Fung Business Intelligence Centre’s (FBIC) New York-based Global Retail &
Technology Team serves as the knowledge bank and think tank for the Fung Group. It identifies and follows emerging global retail and technology trends, and specializes in providing comprehensive insights and analysis by observing and studying these trends as they intersect at the retail interface worldwide. The team’s goal: to stay at the forefront of the retail revolution brought upon by the newest technology and be the leader in the collaborative knowledge communities.
ABOUT THE FUNG GROUP
Fung Holdings (1937) Limited, a privately-held business entity headquartered in Hong Kong, is the major shareholder of the Fung Group of companies, whose core businesses are engaged in trading, logistics, distribution and specialty retailing, including controlling interests in publicly-listed Li & Fung Limited (SEHK: 00494), Convenience Retail Asia Limited (SEHK: 00831) and Trinity Limited (SEHK: 00891).
CONTACT: Debra Hazel
Debra Hazel Communications