My Blog

Part one: Today's hot new market is old folks.

Want to sell cruises? New cars? Fashions? Better learn to talk fluent geezer. 'Cause old folks are the hottest market for those and a lot of other product and service categories.

Old folks? Seriously? Isn't today's hottest market all those affluent 18-34-year-olds?

Actually, no. Because there aren't "all those" affluent 18-34-year-olds. Except for Larry Page, Sergey Brin, Mark Zuckerberg and a handful of other killer app innovators, most 18-34's have minimal bank accounts and maxed-out Visa cards.

CBS President Les Moonves put it into perspective: "Advertisers demand 18-34-year-old upscale viewers. There are no upscale 18-34-year-olds – except my children. And they have to ask me for money."

Boomers and folks over 63 (the upper range of the boomers) are 38% of America's population, but they control 79% of the nation's wealth. That leaves just 21% of the wealth in the hands of the 62% of the population under 44 years old (the young-side cut-off for boomers). Do the math. The average boomer-and-older controls six times as much wealth as the average of Gen X, Gen Next and everyone else who comes after them.

Census data shows that net worth peaks at age 60 for every income segment of American society. (The only anomaly is the lowest 10%, where net worth peaks at 60, declines, then starts to rise again at 75. At age 88, the lowest 10% reach a second, slightly higher, net worth peak.)

Those product categories we mentioned earlier?

- 38% of people over 50 booked leisure travel last year.
- Half of all new car sales are to people over 50. (There are, of course, exceptions. All of the - BrainPosse principals' children drive much nicer – and much newer – cars than we do.)
- Boomers spend $47 billion on clothes annually, more than double teens' fashion spending.

You can also throw in financial services, healthcare, white-tablecloth dining and upscale appliances, because boomers-and-olders buy a great deal more of those than younger folks.

There's a lot of "common knowledge" about boomer-and-older behavior. Some really is knowledge. Some is nonsense.

They're technophobes. False. And kinda true. According to Media Audit, boomers spend an average of 123 minutes a day on line. Which is precisely the national average. iMedia Connection reports that as many as 58.62% of visitors to some game sites are over 55. The Pew Internet and American Life study shows a sharp divide in internet usage between boomers and 65+ people. While 72% of boomers are on line, only 37% of those over 65 are. (Those "olders" who are on line spend an average of 89 minutes a day surfing, e-mailing, gaming, shopping etc.) As boomers age into the 65-and-over segment, they'll bring their significant internet involvement with them. So better take a look at the type size on your web site.

They watch every penny. Not so much. And getting less so. Retirees are 6% more likely to dine out at a full-service restaurant than average adults. Now 13.1% of new cars are purchased by retirees, up from 11.1% just five years ago. Retirees' share of hotel stays is up 10% in five years.

All boomers are wealthy. Not so much either. Although income and net worth increase with age up until 60, there are still stratifications within the boomers-and-older group. A Focalyst study identified a subset of boomers – boomer elites. They're defined as those with a pre-tax household income of $150,000 or more or a retirement household income of $100,000 or more. The boomer elites are college-educated, married, and have savings and/or investments. They spend anywhere from two-thirds more to twice as much as average boomers on big ticket items like furniture, travel and high tech toys. Only about 10% of all boomers made it into this group. So If you're selling Tahitian vacations, up-market carpet or Mercedes Benzes, you can't just target "old." You still have to segment for "rich," too.

They're glued to the tube. True. The U.S. Department of Labor's American Time Use Survey shows that TV viewing increases with age. Except for the 35-44 group's slight dip from the level of the 25-34-year-olds, people watch more TV as they get older. 45-54-year-olds watch 3.09 hours a day. 55-64-year-olds watch 3.59 hours. 65-74-year-olds watch 4.07 hours. And those over 75 watch 4.28 hours. In fact, Retirement Living, a cable TV channel for boomers-and-olders, now reaches 29 million households. So better not switch the entire TV budget to the web just yet.

They're the last of the ink-on-paper newspaper readers. True. 52% of people 50-64 read newspapers. 60% of people over 60 do. and readership skews higher as household income increases. 61% of people with household incomes of $75,000 and above read newspapers. So running your message through a Mergenthaler or Regioman press makes a lot of sense if you're going after the boomer-and-older market.

They're not in the market. Very, very false. The myth was that boomers-and-older had already acquired everything they need, and are not as acquisitive as folks under 44. And in any event, they weren't going to be around long enough to be worth pursuing as a market.

In a recent MSNBC posting, car-industry analyst John Wolkonowicz said "Camry buyers are, on average, in their low- to mid-fifties. If Toyota doesn't change their trajectory, the Camry will become the Oldsmobile or Buick of 20 years from now. Their customers will be dying out of the market every day." Yes, but: The Wall Street Journal reported that 7 of the 13 cars which an average American household buys are bought after the head of household turns 50. So ignoring the 50+ consumer means missing out on just over half a household's vehicle purchases. Oh, and it's the more profitable half. Households headed by 55-64-year-olds spend 20% more on new cars and trucks than those headed by 25-34-year-olds according to an Advertising Age article by marketing guru Marti Barletta.

They're brand loyal. False. American Demographics reports that 48% of consumer electronics shoppers 50-59 said they would probably change brands. A CNW Market Research study shows that 70% of the 55-and-older buyers of Chrysler 300s were not previous owners of Chrysler products. The idea that boomer-and-older consumers have made lifetime brand commitments, like pairs of grey wolves mating 'til death do them part, is not based on data. At least not any data of which we're aware. So if you're counting on a loyal customer base staying loyal, you might want to reconsider your assumption. And if you think the boomer-and-older market isn't worth going after because they can't be wooed away from the brands they're buying now, think again.

You're already reaching them. Maybe. But maybe not. American Demographics estimates that only 10% of marketing communications is targeted to the 50-and-older audiences who represent 38% of the population, control 41% of discretionary spending and have 79% of America's wealth. That leaves a tremendous opening for brands who go after this massive and under-reached market aggressively and effectively.