Posts Tagged 'Baby Boomers'

Another post-mortem on Bon Ton Stores

Because Bon Ton Stores (soon to close at this writing) is based here in Milwaukee, I’ve paid close attention to the reasons behind its demise. Here are some thoughts from a recent RetailWire panel discussion:

One key lesson: The merger of two strong players will almost always work better than the combination of weaker stores. The Macy’s-May deal included the market share leader in almost every major city in the country, even though Macy’s was criticized at the time for changing the nameplates of chains like Marshall Field’s and Famous-Barr. Meanwhile, Bon-Ton’s acquisition of stores like Carson’s and Younkers (and then choosing to maintain “local” identities) was saddled by debt and by the lack of national scale or brand equity.

Milwaukee (where I live) is one of Bon-Ton’s two “headquarters” cities, and the home of its Boston Store nameplate. As an observer, I find the CEO revolving door was an issue and the company’s slow pace of e-commerce development (compared to Macy’s and Kohl’s) didn’t help either. And as a shopper, Boston Store’s content seemed overly focused on “career” Boomers who are retiring from the workforce, without a strategy to replace them with goods for younger customers.

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Boomers’ spending: Less stuff, more life

It’s fascinating to join discussions (like the following from RetailWire) about changing consumption patterns. One of the biggest? Baby boomers like me:

Retailers will continue to have opportunities to sell products related to health, wellness and fitness as Boomers try to chase their imagined “youth” well into their 70’s. But the overall premise of the conversation is correct: Boomers seem to be less interested in accumulating more “stuff” and more engaged in travel, dining and leisure. (This can extend to consumption of technology, another opportunity for retailers.) Their disposable income is also being pinched by rising healthcare costs.

At some point most people decide to spend on life experiences “while they can” rather than more possessions, unless those purchases are for their children and grandchildren. But even multigenerational spending is likely to be geared toward family “experiences” in the future…not a new phenomenon, by the way, even though we Boomers think we’re the first to undergo anything.

Gen Y, meet Gen Z

How do the children of Millennials differ from their parents (and Boomer grandparents) as consumers of the future? Here’s a comment I recently posted on RetailWire:

The article points out the many differences that separate Gen Z even from their Millennial (or Gen X) parents. It’s most important for retailers and marketers to consider that technology is like breathing to this group of current and future consumers, and rapid tech changes tend to be embraced rather than pushed away.

This may be the first generation since the Boomers that takes for granted new ways to consume goods and services. Boomers grew up getting information from TV and were no longer bound to shopping “downtown” as malls and discounters spread nationwide. There are parallels to Gen Z, and marketers need to figure this out while still catering to the consumption patterns of their parents and grandparents.

And here are some later thoughts specifically about Millennial spending patterns:

Eventually Millennials’ spending power will surpass Boomers’ on the basis of sheer numbers. And as more younger consumers move into their home-buying and child-rearing years, they will find that they will need to buy “stuff” (not just experiences)…just like their parents did. Meanwhile, the tables may have turned with Boomers’ diminished appetite for products, especially if their disposable income is pinched by lack of savings or tight retirement income.

As the article suggests, the other key issue is how to reach each group of customers. Boomers are probably still receptive to “old media” (TV, newspapers) for all the online shopping that they do. Their children want to receive their information in a completely different way, and any marketer not yet embracing mobile marketing is not following the money.

Millennials buying homes in the suburbs: Breaking news?

I answer the question in my headline below, in this brief comment from RetailWire. The bigger question is the long-term impact on consumer preferences as this trend unfolds:

Is it surprising the Millennials make up the largest segment of suburban home buyers? Not really, considering that they are outgrowing Baby Boomers in terms of sheer numbers at the same time that they are house-hunting for the first time. So I’m not sure how many conclusions you can draw from this bit of data.

As long as most American cities offer better school systems in their suburbs — along with more affordable housing and more space — it’s not unexpected that Millennials would be drawn to suburban living. (And it’s no coincidence that Boomers continue to downsize.) This will continue to drive the long-term strength of home-related businesses (furniture, DIY, home decor) beyond the short-term cyclical ups and downs of the housing market.

Ignore Millennials? Good luck with that!

RetailWire recently held an online panel discussion around the provocative findings of the “Forrester Report.” It’s premise is that marketers and retailers should focus on Boomers, not Millennials, because the older consumer has the spending power. I disagree:

The Forrester report creates a false choice between Millennials and Boomers. Unless your business model is targeted to a specific age and lifestyle demographic, you ignore either one at your own risk.

Yes, Boomers today have more disposable income than their children, after decades in the workforce and building up home equity. But statistics also suggest inadequate savings among this age group as they head into retirement age and as their lifestyle becomes constrained by fixed income.

Meanwhile, the sheer numbers of Millennials will overtake the Boomer generation in 2015. There is a vast difference between younger members of this age group (working their way through college, renting, not awash in disposable income) and the Millennials in their early-to-mid 30’s who have been in the workforce for a decade. As this population matures, has children and buys homes, its impact on spending patterns will be profound.

Amazon targets the over-50 set

Amazon has set up a “store within the store” called 50+: Active and Healthy. It pulls together several categories and products aimed at the aging Baby Boomer (myself included). RetailWire panelists gave this idea mixed reviews, but I think it’s well worth the effort on Amazon’s part:

Great idea, and there’s no doubt that Amazon has the patience and IT expertise to find out what works and what doesn’t work, and to adapt accordingly along with their vendor providers. While the sheer number of Millennials is starting to surpass the Boomer population, there is no doubting the older group’s buying power.

Outside of chain drug stores — who have an opportunity to appeal to Boomers in a more focused way — it’s hard to see a brick-and-mortar concept that can offer the breadth of assortment found on Amazon. But there are certainly any number of specialty retail and service concepts that could do a better job catering to this population instead of always chasing the young.

Did marketers just rediscover Baby Boomers?

A fascinating recent discussion on RetailWire about marketing to Baby Boomers. It’s becoming apparent that the media and advertising communities’ love affair with everything “young” is starting to be tempered by the sheer size and spending power of Baby Boomers. Here’s my point of view:

I don’t think that “youth positioning” is a mistake per se, if it helps a brand become more aspirational to a broader audience or if it is clearly targeted to the 25-49 age group. However, it’s no secret that Baby Boomers continue to be the largest and highest-spending demographic out there. We haven’t been ignored in terms of CPG product development or retail formats, but marketing to this audience has been strangely quiet outside of niche products and programming. We’ll see whether the changes described in the article are a passing fad or a long-term trend driven by pure economic interest on the part of advertisers.

 


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