A Booming Opportunity

In 2006, the oldest of the Baby Boomers turned 60. Reams of data foretold how this affluent demographic would continue to spend freely into their senior years. Never would they save money like their Depression-era parents.Four years later, Boomer cash is still flowing. But outside of categories tied to health, nutrition and aging, few CPGs are targeting older Boomers (born 1946-1954).The prevailing theory among ad agencies and consultants is that product marketers are reluctant to move beyond the comfortable "mom-with-kids" target that has served them well for decades. "It's a curious phenomenon," says Brent Bouchez, founder of New York-based Agency Five-O, which specializes in Boomer marketing. "Historically, they haven't been a target. But marketers are stuck in another time thinking that these people are like their parents. They have a 30-year-old mentality that you don't talk to people over 50. There is much money out there that is not being tapped."According to McKinsey & Co., by 2015, Boomers will command nearly 60% of net U.S. wealth and 40% of spending. Financial services, travel and, to some degree, automotive, are among the few industries that aggressively market to aging Boomers. Pew Research Center reports in its Pew Internet and American Life Project that adults over 50 years of age account for 80% of all luxury travel spending.The list of retail products companies that target Boomers is very short. In apparel, VF Corp. markets jeans for the 50-plus figure, while JCPenney has updated some of its older-skewing, private-label apparel lines. In electronics, Best Buy's Geek Squad patiently -- and successfully -- is helping older, tech-challenged consumers solve computer woes.But in CPG, the idea that older Boomers drink beer, eat snacks or do laundry is close to nonexistent. Mega marketers interviewed for this story like Anheuser-Busch, Brown-Forman, Unilever, ConAgra and Alberto Culver say they do not currently have specific programs or studies linked to this age group, even though all have brands that have strong appeal among older Boomers.Most marketing that targets older Boomers comes from companies whose products relate to health or aging. Entities include Bayer Aspirin, Kimberly-Clark (Poise and Depend), Procter & Gamble's Olay (anti-aging creams), General Mills (Fiber One cereal) and many vitamin and supplement suppliers.Demo GrowthSuppliers that are not going after older Boomers today are missing some lucrative opportunities. Tomorrow, they could be missing huge numbers of consumers.By 2036, Nielsen predicts households with children will outnumber those 65 and older without children by just 5 million, compared to a 17 million difference in 2007.Over the next decade alone, the 18- to 49-year-old segment will only grow by 3% (factoring in immigration and death), says Matt Thornhill, president of the Richmond, Va.-based Boomer Project, a research and consulting firm. But the 50-plus group will grow 22%."Companies will wake up to the need to target older consumers when there is pain," adds Thornhill. "With the recession, we have already seen an increase in calls from companies seeking help. If you're a consumer products company, you'd better have a 50-plus strategy."Thornhill believes consumer products are at the beginning of the curve in terms of change. Since the economy was strong during the mid 2000s, little thought was given to new markets. "It took people awhile to target Hispanics," he adds. "It was the same type of situation." Retail HabitsThe Integer Group, Denver, surveyed Boomer shoppers as part of its ongoing study called "The Checkout" and learned 54% of the segment regularly shops without a list, leaving them ripe for in-store advertising.Looking at other pre-shop habits, 70% are influenced by the store circular and 40% find coupons to be "extremely" or "very" influential. In-store, six out of 10 respondents said they purchased the exact product and brand that corresponded to the in-store ad with the highest recall, which is a higher percentage compared to other age groups, according to the study.Unlike older seniors, Boomers are not super frugal. Their concept of value incorporates price, quality and effectiveness as well as convenience. "This is part of their ROI," says Harold Baum, managing director of Brooklyn, N.Y.-based Dyna Tabs, a supplier of flavored, liquid-based supplements popular among people who have trouble swallowing pills.This well-educated group is less brand loyal than their parents. If they find a better way to achieve a desired result, they will readily try a new product. "But older seniors only change what they're buying if somebody brings something to their attention," says Baum.According to The Integer Group's survey, 70% are willing to trade down when buying OTC medicines; 45% will trade down in the frozen treats/desserts category; 38% in laundry detergent; and 31% in health and beauty.Boomers are also a happier, less serious group than older seniors. They want more out of life than food on the table. "They look at all the struggles their parents' generation had with the World Wars and the Depression, and they want to look good, feel good and enjoy life," says Baum.Kimberly-Clark Corp., Irving, Texas, has conducted research on reaching older shoppers, citing statistics that eyesight starts to decline at age 65. The company also studies its products for shopability and ease of use."We have a training class called 'Senior Sensitivity' that we send everybody to," says Deb Hannah, senior brand manager, adult feminine care shopper marketing. "We simulate different aging characteristics, including eye conditions that cause colors to look similar. We even have glasses that make colors look the way they do to people with these conditions." Targeting BoomersGeneral Mills targets empty nesters with its Progresso soups as well as with single-serve versions of Green Giant vegetables and Wanchai Ferry entrees. General Mills views Boomers -- along with Millennials and ethnic consumers -- as keys to future growth.White Plains, N.Y.-based The Dannon Co. uses mother and daughter images in advertising Activia, its probiotic yogurt. Michael Neuwirth, senior director of public relations, says while ads are not Boomer-specific, they hone in on the value of getting a product recommendation from a family member.Boomer Project's Thornhill says life stage is a great way to target. "But don't assume that by knowing Boomers' ages you know what life stage they're in," he says. "You can be 46 or 64 and have kids in college."Even with health-oriented products, age is not always the focus. Marty Baum, principal at Edgewood Consulting in Parsippany, N.J., says many OTC clients prefer to focus on the malady, not the consumer's age. "It's about what they're suffering from and their attitudes toward their suffering," he adds.Nevertheless, he says OTC suppliers are keeping older Boomers in mind by making packaging easier to read for customers who forget their glasses. Edgewood's clients include Merck and Bayer, and the firm focuses on category management support, strategy and brand management.Boomers like the convenience aspect of drugstores, says Baum. "They will pay a little more because they can park in front and go through the store in a minimum amount of time." Thornhill adds, "Walgreens is looking at how they're merchandising and displaying products and how they are doing in-store lighting so not to discourage older shoppers. Target put a bigger font on its RX bottle. We will see more of that."Kimberly-Clark has also re-engineered packaging. Its Depend logo has been made smaller and more discreet. Poise packaging now resembles feminine hygiene packaging; this creates a sense of familiarity for women who may be uncomfortable purchasing an incontinence product."There is pretty significant denial about entering the category," says Hannah. Poise is aimed at women suffering from urine leakage; Depend provides more comprehensive protection.Products themselves have been re-engineered to have a less institutional feel, says Blake Boulden, brand manager for Depend. This year, Depend launched gender-specific products (it had been unisex). The disposable products now resemble "regular" underwear. They sport prints and colors and are rolled up in clear packaging "like Jockey or Hanes," adds Hannah. The company is also discouraging use of the word "diaper." Ads, which used to show a granny on a Harley, now use more realistic scenarios in which consumers strive for personal achievement in a job, hobby or other endeavor. Most changes have taken place over the past two years.Since much consumer research is conducted around the point-of-purchase, K-C is working with retailers to design appropriate signage and informational materials. K-C also offers free sample packs via doctors' offices. Packs contain products with different protection levels so consumers can determine which one is right.

A Booming Opportunity

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