This article appeared in the 1996 Fall edition of The Strategic Solution, the newsletter of The Strategic Edge.
BABY BOOMERS GROW UP
Where did all of the time go? The first of the 78 million baby boomers, born from 1946 to 1964, turn 50 this year. Baby boomers have a unique set of beliefs and characteristics, vastly different from previous generations. This encompasses all aspects of life, affecting their beliefs about self, career, home, and leisure. Their life cycle change into mid-life will impact retailing in the next 20 years.
Baby boomers are more optimistic economically, largely since they did not experience the Great Depression. They are better educated; men continued in college to avoid the Vietnam war and more women, seeking equality, sought a college education. Women of this generation worked outside the home in greater numbers, even while raising young children. Baby boomers, especially the latter group, are more comfortable with technology, growing up within the age of computers. They are an individualistic generation, with a focus on self and a tendency to reject authority. Hectic lifestyles are common for baby boomers, with their leisure time infringed upon by the various demands of life.
As the baby boomers enter mid-life, they face normal emotional and physical transitions, yet some unusual financial and employment concerns. As boomers age, they will face some of the standard chronic health problems and face their own mortality. Yet, they will strive to control the aging process with beauty products and health treatments more so than former generations. Many baby boomers are facing layoffs as corporations downsize, rather than entering a period of economic certainty, job security, and one’s peak earning years. Their financial status is even more uncertain because baby boomers are a spending - not a saving - generation, who liberally use credit to finance purchases. This collective tenuous financial status is compounded by the fact that there is greater uncertainty of the availability and reliability of Social Security. And, with many subsidizing their own aging parents, this uncertainty is compounded.
Baby boomers are an important segment for retailers, not only because of the sheer size of the population segment, but also because people in this age group are typically big spenders. However, given some of the characteristics of baby boomers, retail patterns should continue to shift in the next 20 years.
Baby boomers’ food shopping habits will continue to evolve. Traditional food shopping may decline, unless supermarkets continue to offer more specialty and prepared items. Even in mid-life, boomers are time-poor and seek conveniences to ease everyday life. This could continue to be a boon for restaurants, and especially those that mimic home-cooking. Even fast-food restaurants, bastions of youth and juvenile marketing, are courting the baby boomers. McDonalds recently introduced the Arch Deluxe specialty sandwich, specifically targeted at baby boomers, in an effort to retain a generation which had previously represented a loyal clientele.
As people mature, they spend more in drugstores, usually for prescription medicine. Drugstores should benefit from the aging boomers, not only for prescriptions, but also for health and beauty aids. This generation has a strong desire to counter the aging process and retain its youth. This group kept fit in their early years, and will continue to maintain a healthy lifestyle. Boomers’ aging will also support increased medical services, particularly such specialties as optometrists and plastic surgeons.
The highly educated baby boomer should support the continued growth of bookstores and high technology products, stores, and services. People are typically in their peak reading years in this age period anyway. This generation, especially those in the later years of the baby boom, is comfortable with computers. Baby boomers will buy computers and hi-tech products for themselves, their children and grandchildren. High technology can be used to sell other products and services which will then be perceived as more fun and entertaining, themselves.
The independent, self-focused mid-life baby boomer will spend money, cash or credit, on luxuries. Mid-life boomers will trade in their minivans for luxury sports cars. They will travel increasingly, especially as they become empty nesters. Jewelry stores may provide the trinkets and baubles to bring joy and fun to many mid-life women. If apparel manufacturers can better target the mid-life market, they could enjoy a resurgence. People in this age bracket are typically big apparel spenders.
With a generation of people who came of age concerned about the environment, manufacturers and retailers who emphasize their "green" friendly nature will succeed.
With the continued time pressures on baby boomers, the stress in their lives, and their lack of leisure time, retailing should be entertaining. This is not to suggest that every developer add an entertainment "component" to their mall. Rather, entertainment should be an integral part of the retail experience, itself.
Consider the size of the baby boomer population segment - 78 million - and their exceptional buying power. The next 20 years can represent a "golden" opportunity for retailers if they appropriately target baby boomers with products and services which appeal to their unique wants and needs.
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