In 2012, A.C. Nielsen published a white paper titled, Boomers: Marketers’ Most Valuable Generation. Nielsen postulated that as more Boomers aged out of their prime income earning years, they would move from a life dedicated to making money to one that is directed at spending money. At that time, seniors controlled more than 70% of the total net worth of American households and represented 50% of all consumer spending, according to the U.S. Small Business Administration.
Fast-forward to 2023. Are Boomers still the most valuable market segment?
Demographic Growth of the Boomer Segment
To start, there are simply more Boomers in America than there used to be. 17.7% of the population is 65 or older, according to the Census Bureau. That’s up from 13% in 2010![1] And this trend will continue into the next decade.
Boomers Are Still Outpacing Younger Cohorts When It Comes to Spending!
As you might expect, Boomers continue to control 70% of total household net worth and still represent about 50% of consumer spending.
Furthermore, the Bank of America Institute published a research report in October stating that Boomer spending growth in 2023 remains significantly stronger than Millennial spending growth. There are a lot of reasons for this. First, Boomers receiving Social Security payments enjoyed an 8.7% cost-of-living adjustment in 2023 – the largest percentage increase in four decades – to offset the inflation America was experiencing. Conveniently for Boomers, inflation cooled at the same time, meaning that Social Security payments not only offset the cost of inflation, but it exceeded it! While Boomers won’t enjoy a similar windfall in 2024, they will enjoy an additional 3.2% bump.[2]
And there are more contributors to buoy Boomer spending:
If Boomers Were Their Own Country…
To put American Boomer wealth into perspective, if Americans 50+ were a country, they would constitute the WORLD’S THIRD LARGEST ECONOMY – behind the United States and China, but ahead of India, Japan, and Germany. Yet, marketers continue to ignore them. According to A.C. Nielsen, seniors are the target of only 10% of all marketing activity, despite the fact they represent 50% of all consumer spending, as mentioned above.
Opportunities Abound for Marketers Who Target Older Americans
Recognizing the discretionary dollars Boomers collectively have at their disposal, there are product and service categories that are positioned for success when targeting this affluent demographic group:
The Boomer generation is the first generation that does not see travel as a luxury. They are in a place in life where they prefer spending on experiences more than spending on goods – and as already stated, they have the resources to do so.
Boomers remain the most valuable market segment in America. Yet, most marketers ignore them, targeting younger, less affluent consumer groups instead. There is great opportunity – and not so much competition – for those who pursue this high value market.
[1] Gwynn Guilford; “The U.S. Economy’s Secret Weapon: Seniors with Money to Spend; Wall Street Journal; Oct. 8, 2023
[2] “Consumer Morsel;” Bank of America Institute Report; Oct. 24, 2023
[3] Ibid.