In order to truly understand an audience, marketers need to have the ability to identify consumerinsights that enable communication to customers as individuals. But are we paying too muchattention to the wrong generation? Perhaps an emerging generation like the millennials? It is important marketers don’t lose sight of current generations that have tremendous spending power.
For that reason, we will look into the 50+ group (boomers+) and understand how they buy, wherethey spend and what motivates their buying power.The most talked about consumers at the moment are the millennials and marketers look tounderstand how to interact with them and increase their spending power. According to a report byEpsilon titled ‘#marketingtomillennials: A guide to understanding today’s millennials’, the firstinherently digital generation has soaring expectations for brands and how they are engaged bythem. Brands too are constantly looking at ways to drive this highly influential group.
While there are 83 million millennials in the US, there are currently around 103 million people in theUS over the age of 50. Nielsen estimates that baby boomers (50–69) alone make up 70 percent of the nation’s disposable income. Does that mean marketers are making assumptions of their spending power and focusing only on emerging consumers?
‘Age is an attitude: marketing to the boomers+ population’, another report by Epsilon brings toattention, the baby boomers generation (those 50–69) as well as the silent generation (those 70+) on what they prefer and how to reach them.
Marketing to millennials and boomers+ are two categories that seem worlds apart, but they maynot be that different after all. Let’s bust a few myths:
Myth 1: Boomers+ are technologically challenged but millennials are all digital all the time
Baby boomers were in actuality, among the workforce during the disruptions of computers, email,the internet and technology. The AARP reported that 82 percent of baby boomers use the internet.As per the report by Epsilon, nearly half of all boomers + have computers. In addition, 34 per cent of babyboomers expenditure is through online channels as compared to 39 per cent expenditure for millennials.
Although millennials are pegged as ‘digital natives’, 53 per cent of millennials’ wallet is spent in retailstores, comparable to 49 percent of baby boomers’, meaning both groups have a presence in brick-and-mortar and online.
Findings from the analysis show Boomers+ are regular users of Facebook and are on par with theaverage population along with their preference of social channel. Boomers+ use Facebook toconnect with their children and grandchildren and to find their past allies as well. Millennials areusing Facebook to share photos with their older family members while millennials without childrenprefer Instagram.
Marketers need to let go of the assumption that boomers are not comfortable leveragingtechnology, while also keeping in mind that the digital space is not the sole place for millennials.What is important is to understand and devise a cross-channel engagement strategy that is fuelled by rich customer profiles and enables marketers to better recognize and reach customers.
Myth 2: Boomers+ make purchase decisions offline and millennials ignore direct mail
There is a clear difference between being online and buying online and boomers+ must not beoverlooked in the online channel.The research shows that high income/high net worth individuals aged 50–69 are more likely to havea higher percent of spend in the retail and online channel when compared to the average 50-69population – a sign that this group is moving into digital channels. With greater financial stability, itis more likely that the 70+ segments would shop via retail or online, based on mobility. An effectivedriver of news and discounts is email, a channel that also allows this group to stay in touch withfamily and friends.
This shows that boomers+ are using the online channel to inform their purchase decisions. Althoughthey are not transacting online, marketers can reach this audiences through omni-channel touchpoints during the purchase cycle.
Millennials exhibit cross-channel behaviours too – perhaps as expected, they leverage the web toresearch, review and comment, complain or praise. But a major part of their decision making lies inoffline tactics. The report shows that 42 per cent millennials use “old-school” printable coupons to makepurchases.
Marketers should keep in mind the multichannel approach to maximize efforts for both generations.
Myth 3: Boomers+ don’t spend or influence spending and millennials spend outside of their means
With a large chunk of the mature population moving to retirement, the assumption is that they stopspending. On the contrary, findings show that the average expenditure per baby boomer householdis $765 compared to millennials who spend $508 per household per month. (Even those 70+ spend on average $675 per month).
Marketers may not consider the 50+ generation to be their target audience but they can very well be influencers to purchase. They could be parents or grandparents who could be living with theirchildren thus becoming influencers.
There is an assumption that since millennials have lower average income and net worth than oldergenerations, they leverage by means of credit cards. However, only 17 percent of millennials of age 18–24 and 34 per cent of millennials of age 25–33 use credit cards. This compared to 68 percent of babyboomers who leverage credit cards. Marketers must also consider millennials who live with theirparents who spend less on rent and household expenses, thus allowing them to spend more onthemselves. It’s important to note that as millennials progress through life stages, their disposableincome decreases and their spending changes to be more in line with their life stage.
All consumers age and as they progress through life stages they behave differently. If a marketer is trying to increase customer lifetime value, it’s important that they don’t alienate an audiencebecause of where they are now (or will be in the future). Focusing on data and insights will help themarketer deliver more personalized marketing.
The author is President,Data Practice at Epsilon
Disclaimer: The views expressed here are solely those of the author and do not in any wayrepresent the views of exchange4media.com.