More than 34 percent of the U.S. population is over 50, and the over-65 demographic will increase 65 percent by 2030; seniors are living longer and spending more. Many retirees can expect to live 10 years longer than their parents. And these aren’t frail retirees.
These seniors tend to work later and play harder. From going out to dinner to traveling the world, more seniors are enjoying life. With this working and living longer comes buying power. But how much buying power do they have, and why aren’t marketers noticing?
Silver Economy Growing
Seniors contribute approximately $7.6 trillion to the economy worldwide. And according to the AARP, Americans over 50 represent the third-largest economy worldwide. With the aging population in the United States, that’s only going to grow. Indeed, the U.S. Census Bureau estimates that by 2050 there will be 83.7 million people in the United States 65 or older.These are the baby boomers, and they’re unique. Some still have kids at home, and some have parents who are still around. They’re often referred to as the “sandwich generation,” because they’re sandwiched in between, and sometimes taking care of, two generations.
Boomers also spend their dollars differently than their parents at the same age.
Baby Boomers Spend More
With boomers possessing 70 percent of the U.S. disposable income, they are the most affluent generation.The economy is feeling the presence of baby boomers. Credit card company Visa states that 50 percent of consumers in the United States are over 50. And they are outbuying the nation’s younger consumers in many areas. Baby boomers spend $548 billion a year. That’s more than any other generation.
For instance, half the computers in the country are purchased by boomers. They also buy two-thirds of the new cars sold annually. And these consumers don’t always shop at the brick-and-mortar stores.
Online Sales and Seniors
Most people have heard how millennials shop online and avoid brick-and-mortar stores. But seniors are also online, and they’re spending. Forty-nine percent of people between 52 and 70 spend 11 hours a week online. Forty-two percent of millennials spend 11 hours a week online.Gone is the grandma who couldn’t figure out the computer. Baby boomers not only know the computer but also shop, read their news, and go on social media to stay connected with friends and family. They also use the computer to book trips.
Spending Money Traveling
Baby boomers have more income to travel than Gen Zers and millennials. Seniors are the lifeblood of the travel industry. They spend $157 billion dollars annually on traveling.In 2019, before the pandemic shut down the industry, baby boomers spent an average of $6,600 apiece. They planned an average of four to five leisure trips. And 84 percent of these boomers planned and booked these trips online.
Seniors Embrace Technology
Sixty-eight percent of boomers own a smartphone, and 52 percent own a tablet. Moreover, according to AARP, tech spending among boomers is increasing yearly.Spending on tech for boomers in 2019 was $394 per person. In 2021, that number jumped to $1,144 per person. Purchases included smartphones and smart TVs. Forty-one percent of Apple computer sales come from boomers.
With smart TVs came a change in viewing habits. Whereas network TV and cable had always been mainstays of in-home entertainment, streaming services are now popular with baby boomers.
In 2019, 60 percent of seniors watched network TV. But in 2020, only 38 percent watched traditional television. Instead, seniors were purchasing streaming services like Netflix and Hulu.
Smart Homes on Rise
Boomers tend to own their homes. Seventy-seven percent of 55- to 64-year-olds own their home. And 81 percent of 65- to 74-year-olds own their own home. With homeownership comes investment. Many seniors are upgrading to smart homes.More than half of homeowners over 50 have smart home technology. And those who don’t have it are interested. According to a Harford and the MIT AgeLab study, 49 percent of those without smart homes plan to spend between $101 and $500 to upgrade their current home in a given year.
The three reasons given for smart home improvements were safety, saving energy, and convenience.
Marketing to Boomers
Millennials are the darlings of many marketers. The argument is that they haven’t chosen brand loyalty yet and have many years of shopping left. But boomers have many years of shopping left, and their purchasing power will only increase.According to the Center of Retirement Research at Boston College, boomers are expected to inherit $8.4 trillion by 2030. This inflates their disposable income even more. But some advertisers ignore this spending powerhouse by not showing ads depicting seniors. If they do represent seniors, it’s usually in stereotypical ways.
According to an AARP survey, almost two-thirds of companies did not plan on targeting boomers or any 50-plus consumers. Many advertising executives ignore seniors thinking they’re already brand loyal or, even worse, cheap.
But a study found that 70 percent of boomers would switch appliance brands, and, even more, would switch clothing preferences. And as for the cheap accusation, boomers make the most money and they spend.
Senior Spending for Years to Come
Baby boomers’ economic power is a tidal wave. They outspend every generation. Whether they need to or want to, they’re working longer. One result is that they have more disposable income. And they’re not afraid of spending it on travel, technology, home or whatever else meets their fancy.The Epoch Times Copyright © 2022 The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
