Turn on Fox News Channel or open up an “AARP Magazine,”two of the top media vehicles that cater to an older demographic, and based on advertising one might think that all anyone over age 50 cares about are arthritis and joint pain, erectile dysfunction, reverse mortgages, dumping stocks in favor of gold coins and how to avoid death by getting a walk-in bathtub.
However, retail brands and marketers are overlooking a veritable pot of gold as they chase after the rainbow of cash they believe is only associated with millennials and the even younger Gen Z audience. According to Nielsen’s “Boom Ager” report, the reality is Americans over age 55 control 70% of disposable income by age group, manage 83% U.S. household wealth and spend $5.6 trillion annually on consumer goods and services, almost three time more than younger generations. Boomers are also the generation that will experience the largest wealth transfer in our country’s history over the next 16 years inheriting $15 trillion.
While boomers are the generation that created consumerism, their purchasing habits and how they shop have changed. Today’s 50+ consumer—a blend of boomers and the oldest of the Gen X demographic—is spending money on health and wellness, but they are also investing in experiences, relationships and creating a functional home environment for the next potential 30-40 years of life. Below we take a look at a few key areas driving 50+ consumer shopping trends.
“Several years ago, retailers realized that to drive consumer consumption and acquisition they had to meet the customer where they were at and that really appealed to the 50+ consumer,” said Dr. Gail Kirby, a lecturer on retail trends at Santa Clara University’s Leavey School of Business. “This has now become the age of omnichannel marketing.”
Omnichannel marketing offers consumers choice and control by integrating their shopping experience whether the channel is mobile, online or bricks-and-mortar. Customers can browse online, check if local stores carry the item, click-and-collect to buy online and picking up in-store or opt for home delivery. Texts and email messages use the customer’s smartphone to share up-to-date shipping status, offer loyalty discount coupons or codes, and offer in-store returns for an online item purchase.
“Amazon has done more than disrupt retail, it has retailers struggling with ways to get customers to the store or at least have a connection between online and the traditional retail shopping environment, which is still how boomers want to shop,” adds Kirby.
A 2019 study conducted among 10,000 adults ages 18-75 by Blackhawk Network, a branded value company focused on retailer and consumer insights, found 82% of Gen Xers and boomers buy in-store at least monthly. Older shoppers still want to go into the store for the personalized customer service of talking to a sales rep or learning what is the latest fashion. As opposed to millennials, few 50+ consumers (only 12%) rely on reviews or even friend referrals when they shop. They want to learn from the experts what is trending and popular.
However, that study also found 4 in 10 people in this age group also shop online every month. In fact, Nielsen reported 8 million boomers spend more than 20 hours a week online and those over age 50 spend nearly $7 billion per year via e-commerce purchases. The benefits of shopping on demand, free shipping and same-day home delivery, drives 50+ consumers online – especially for shopping that is purely transactional, such as groceries, toiletries and household goods. According to the latest report by Forrester Research, the global online grocery market is predicted to double from $150 billion in 2017 to $334 billion by 2022. Blackhawk’s research found 60% of 50+ shoppers have ordered groceries online with at-home delivery—a rate higher than Gen Z and millennials.
According to a study conducted by Expedia and the Center for Generational Kinetics, 74% of Americans want to purchase experiences over products. The report concludes that as boomers enter an era of retirement, they are not slowing down but are pivoting to seek peak experiences built around relationships and sensory pleasures. Instead of purchasing “things” their shopping trends toward lasting memories.
One area where packaged experiences is taking off is in the leisure travel industry, which has long seen retirees as an attractive market. AARP estimates baby boomers spend more than $120 billion annually on vacation travel—but the types of trips have changed over the last few years. While sales of RVs to take road trips to see the Grand Canyon and the grandkids or cruise ship tickets to sail the Norwegian fjords are still popular, boomers are tapping into the experiential travel trend, a pursuit they share with the “echo boomer” millennials.
For instance, Airbnb, which launched its unique Experiences—one of a kind vacations designed and hosted by locals—recently promoted its “live like a British lord and lady” adventure to stay at Downton Abbey (known in real life as Highclere Castle). The offering was designed to tap into the fan base of the TV series, which reported that 52% of its 13 million weekly audience was over age 55, and tie into the debut of the “Downton Abbey” feature film. The Downton Abbey experience, with limited availability, sold out in 5 seconds of posting.
Last year, luxury brand LVMH, the multinational conglomerate home to labels such as Louis Vuitton, Tag Heuer and Christian Dior, acquired Belmond, the elite hospitality and travel company—packaging all-inclusive trips with unique customer shopping experiences. Chanel, another luxury brand which reports 80% of its customer base is women over the age of 50, is curating similar travel + fashion experiences.
At a time when only 5% of U.S. advertising dollars target 50+ consumers, there’s a significant opportunity for retailers looking to tap into this lucrative consumer group. And the Blackhawk study shows 92% of boomers are brand loyal if customer experience is up to their standards—so delivering on the shopping trends above can help them find the pot of gold in 50+consumers. Older customers have money to spend. The question is whether retailers will make an effort to understand the shopping trends and serve this valuable consumer.