https://innovateuk.blog.gov.uk/2016/07/19/spending-the-kids-inheritance-what-it-means-for-uk-companies/

Spending the Kids Inheritance, what it means for UK companies

The Baby Boomers, who as youngsters invented flower power and the swinging sixties, are the leading edge of a change that will shape the consumer world for the foreseeable future. When they choose to retire, people now mostly in their 50s and 60s will be:

  • learning
  • travelling
  • exercising
  • eating well
  • buying the latest electronics

well into their 80s.

Mature couple taking a selfie on a plan

Innovate UK and ScienceWise conducted research into Baby Boomers

Baby Boomers are a diverse group with their experiences of social change varying greatly depending on:

  • wealth
  • class
  • education
  • health
  • employment
  • marital status

so I am wary about generalisations.

Innovate UK and ScienceWise worked together this year to collate information about how the most affluent third of this cohort are likely to behave as consumers.

I’d like to share some fascinating snippets we have learnt from a review of academic and market research, focussing on those who have the disposable income to spend on luxuries and where we can make some generalisations.

What’s interesting about the facts below is that they are evidence based, not simply assertions, and fairly unknown to many of the companies who are selling into the UK, US, Japanese and European markets.

Did you know:

  • In the US, 50% of population will be over 50 within couple of years: 10,000 people are retiring every day – and this will continue for 15 years. So 80 million baby boomers are shifting their everyday focus from work to home.
  • The over-50s account for about 47% of all UK consumer spending (up from 41% in 2003), worth £320bn a year.
  • Baby boomers account for nearly a quarter of the UK population and hold the majority of the UK’s personal wealth.
  • Baby boomers perceive themselves to be much more like their children and younger generations than like their parents or older generations.
  • They are tech savvy. 53% of US Baby boomers are on Facebook.
  • In the UK, people aged 50–74 are spending twice as much per year as the under 30s on theatre and cinema tickets.
  • Retirement for Boomers is not about retreating or stopping; if anything, it is about re-invention either through new work, volunteering, travel or learning.
  • 40% continue to work full time; 10% part-time. 19% are intellectually driven and may return to education in some form. 15% are still focused on getting rich.
  • More than older generations Boomers believe in spending their wealth rather than in saving and passing it on to future generations: SKiINg – Spending the Kids’ Inheritance.
  • Most Boomers think of their ageing identity in terms of how much time they have left rather than their actual age. This is linked to a ‘things to do before I die’ orientation and the current fashion for bucket lists. When people perceive remaining time as limited they tend to prioritise social goals that are emotionally meaningful to them.
  • Many Boomers are into environment and sustainability and many volunteer their time – with 22% looking for meaning, balance and spirituality in their lives.
  • Boomers who got hooked on books, fashion or music in their youth often continue and develop these interests in mid- and later-life, reflecting the 18% who are emotionally-driven and the 14% who are pleasure-driven – all wanting to live life to the full.
  • 12% focus more on healthy bodies and lifestyles with interests in diet and exercise – hence the rise of the MAMIL – the Middle-Aged Man In Lycra.
Middle-Aged Men In Lycra
Middle-Aged Men In Lycra

So, in summary, the Baby Boomer generation hold most of the wealth and account for half of all consumer spending.

When it comes to consumption, Baby Boomers are driven not only by their needs but by their passions and preferences, and most of all by what adds to their quality of life in terms of their experience of it.

Where their parents, brought up in war-time shortage or post-war austerity, might passively consume what they were allowed, Boomers actively seek out what they want.

Do I look like I need a chairlift? Mature woman surfing

What this means for business

Boomers have the money and desire to commission bespoke new products and services that extend their enjoyment of life for longer. They are willing to buy prototypes and be early adopters for what they want in terms of experiences, health, relationships and personal fulfilment.

  • By 2020 the global Baby Boomer market will be worth $15trn a year.
  • Learn from Japan. Japan’s boom in older healthy, wealthy retirees happened 15-25 years ago so we have a lot to learn from them. The baby boom happened about 5 years later in Germany and Poland, due to post war economic hardship. UK solutions may be adapted to do well there.
  • Boomers are increasingly part of the decision making process for products and services where they are not the customer but the source of funding – whether for their still dependent children or their elderly parents.
  • Segment the market in terms of lifestyle preferences rather than age – and don’t mention the ‘silver economy’: it doesn’t fit with how Baby Boomers see themselves. Waitrose understand that their customer base are less constrained by lack of time or money and have increased their range of high quality, British grown food products to reflect the desire of foodies for local, unusual and premium ingredients.
  • Boomers feel much younger than their chronological age – typically by some ten years or so – and they do not like to be targeted on account of their age alone, or at all. The Harley Davidson trike is designed specifically for the older rider but has retained the ‘cool factor’ and desirability.

Harley trike

  • Think about age neutral marketing, where a product is marketed and sold on its merits and to anyone who is interested in it. For example, the Ford Focus was designed with older adults in mind, from the seating arrangements to the paddle shift gear changes and parking sensors but it is marketed as a lifestyle product for all ages.
  • Health and wellbeing are key drivers of consumption. Sales of hair dyes, face creams, skin lotions and other self-care products targeting the ‘over-50 male’ have increased by over 400% in the last decade or so. Although the majority of older women do not use anti-wrinkle creams, over a third of women in their 60s do. Another big growth area is Boomer sex. LoveHoney, the online adult toy shop, has brought out a range of sex products aimed at older consumers called Swoon with retro-inspired packaging.
  • Two-thirds of Baby Boomers say that technology is a vital part of their lives and over 50% believe that technology has made their lives easier. They use the internet for email and researching information about goods, services and travel, internet banking, and online news and magazines.
  • Product design needs to take better account of age-related realities. For example, the sense of taste declines with age so food manufacturers need to find ways to boost flavour without using additional unhealthy ingredients such as sugar, salt and fat.
  • Companies will do well, that help Baby Boomers to overcome or delay the infirmities of age, make them less visible or more tolerable, or generally enable people to carry on their lives as they wish. Depend advertising says it all “Looks and fits like underwear. Protects like nothing else”
  • Likewise packaging needs to be easier to open (which would be better for all consumers): the average 70 year old has the grip strength of a 10 year old child.

Past generations were more accepting of their limitations. The Boomers don’t have that attitude. They demand and expect more.

You can follow me on Twitter: @FionnualaCostel

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