Will retailers lose retiring boomers to experiences?

Discussion
Oct 10, 2016
Tom Ryan

The latest generation of senior citizens, increasingly consisting of retiring boomers, is proving to be healthier and wealthier than their predecessors. Much like Millennials, however, seniors are gravitating towards spending on experiences rather than on material goods.

According to Fung Global Retail & Technology’s report, “The Silvers Series V: Leisure Services for Seniors,” seniors in the U.S., U.K. and Japan allocate a higher portion of their consumption expenditure to leisure than the average person does.

Seniors’ greater spending on events, dining out and travel is being driven by two key factors: increased mobility and money. While all three regions are showing gains in life expectancy, senior households in the U.S. saw significant increases in their average wealth and income from 2000 through 2013, outpacing growth among younger demographics. Senior tours, fitness programs and businesses geared toward social activities such as movie theaters, restaurants and those offering classes or supporting hobbies are expected to benefit from the trend.

Fung’s Managing Director Deborah Weinswig notes in a press release that retailers, service providers and vendors “must rethink the ways in which they promote their offerings, and maybe even widen their target audience.”

A prior Fung report, “The Silvers Series IV: Retail Reconfiguration for Seniors,” shows that older consumers may just have less material buying needs. Among categories, seniors over-index significantly in books and slightly in household supplies (such as cleaning products), but under-index significantly in the major categories of apparel/footwear and food at home.

But the report also points to a few ways stores are making shopping more of a social opportunity for seniors:

  • Japan’s Aeon Mall, one of the first malls to specifically target maturing customers, offers about 140 leisure activities, such as hula dancing and calligraphy. Customers can also find companions through a “Begins Partner” program;
  • British retailer Debenhams finds that older customers are the primary group that prefers coffee and hot food offerings. Sales from concessions are now substantially higher than those from women’s apparel.

 

DISCUSSION QUESTIONS: How are the needs and desires of retiring boomers altering sales opportunities for retailers? Should stores and malls be thinking of ways to make shopping more social to attract seniors?

Braintrust
"The next wave of goods may be Boomertech."
"The one area where retailers of all types can win is in creating events around themes that make sense to us and INVITE us Boomers into your stores."
"But let’s be clear, this is not the “experience” where we all wear the same colored tour hat, sit in the same seat on a bus day after day..."

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18 Comments on "Will retailers lose retiring boomers to experiences?"

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Max Goldberg
BrainTrust

Marketers may have moved away from Boomers to focus on Millennials, but retailers do so at their own risk. Boomers have been avid consumers their entire lives. As they retire they want less stuff and more enjoyment out of life. Thus the desire for experiences, not another pair of shoes. Most of the Boomers I know are looking for ways to simplify and downsize, leaving less room for things and an increased desire for doing.

Ken Lonyai
BrainTrust

Retailers will do well if they connect the dots between products and experiences. In other words, don’t just sell a garden rake, make it part of a fun in-store gardening demo that reveals pointers about growing more robust plants and even comes with a free plant. In that way, the product helps fulfill the experience with the store as the mechanism rather than the store as simply an outside party to the experience as in traditional retail.

Lyle Bunn (Ph.D. Hon)
BrainTrust

Sometimes a good retail experience is one that lacks confusion, frustration and the troublesome elements that keep a shopper from getting what they need. Boomers have a bias to the “need” end of needs and wants in life, and rightly wants are commonly “want”-based. So retailers should focus on smoothing the wrinkles of shopping and help to be a part of fulfilling Boomer experiences outside the store. Boomers are learning to be more like Millennials and will teach Generation Z about shopping, so the focus that retailers place on these demographics will show higher rewards across all segments. Cross-generational brands such as Lego are the ones to watch as product attraction and selection fun moves forward. (Fun = positive experience.)

Ralph Jacobson
BrainTrust

Regardless of activities taken on by retirees, there will be markets of goods and services to respond to those activities. Tiny house boom? There are plenty of products to fulfill that trend. RV travel/living? Again, a whole new world of opportunity for retailers. This is simply a shift in market demand that CPG and retail brands will quickly learn to provide new product categories for.

Adrian Weidmann
BrainTrust

Baby Boomers have spent the past 40 to 50 years acquiring stuff. They’re (we’re!) now at a stage in our lives where we’re now figuring out how to declutter and simplify. Simple experiences rule the day. Retailers and brands should take a page out of the Millennial playbook and present the experiences Boomers will savor using their products and/or services. The luxury car brands have tapped into this messaging in their commercials.

Bill Hanifin
BrainTrust

Developing a strategy to attract Boomers into the future, retailers should consider not just Boomers themselves, but their sphere of influence in their families. Boomers become grandparents and stay connected with two generations of family as a result.

Retailers should continue to explore the creation of entertaining “how-tos” that support the purchase of a particular item, e.g. grilling classes for those buying a Big Green Egg. At the same time, creating connections across generations is a way to tap into the Boomer dollars that are spent as an investment in their own families. I like the Lego example suggested by one of our panelists and think there are many more across games, sports and even electronics.

Dick Seesel
BrainTrust

Retailers will continue to have opportunities to sell products related to health, wellness and fitness as Boomers try to chase their imagined “youth” well into their 70s. But the overall premise of the conversation is correct: Boomers seem to be less interested in accumulating more “stuff” and more engaged in travel, dining and leisure. (This can extend to consumption of technology, another opportunity for retailers.) Their disposable income is also being pinched by rising healthcare costs.

At some point most people decide to spend on life experiences “while they can” rather than more possessions, unless those purchases are for their children and grandchildren. But even multigenerational spending is likely to be geared toward family “experiences” in the future … not a new phenomenon, by the way, even though we Boomers think we’re the first to undergo anything.

Lee Kent
BrainTrust

I don’t know about the rest of the Boomers but this Boomer doesn’t want to buy one more thing for the house and rarely buys clothing unless there is an occasion coming up. My Boomer friends seem to be all about their hobbies, travel and grandchildren. Smart retailers will focus on those things if they want a piece of the Boomers’ pocket-book. I love the example of the gardening project. It plays right into the hobby idea.

Give us experiences that allow us to socialize, not spend a fortune, do something we enjoy, that are convenient and easy … and you’ve got us.

For my 2 cents.

Gene Detroyer
BrainTrust

Your comments are more than 2 cents. As per my post … buying is collecting — experiences are living.

Ian Percy
BrainTrust
You are both on target! Thank you. You triggered another thought and, if I may, learning something new is an experience too. But even here “learning” includes things beyond painting while you drink wine (though that was kind of fun — once) to things like learning to code, getting into serious academic study about a lifelong interest, etc. Let’s not underestimate what seniors can and want to handle. I had a neighbor write his first novel in his late 70s and he’s written four since. I helped him get a literary agent and in thanks he did a truly amazing oil painting for our dinning room. I had no idea he was that gifted. Because of that experience, I’m thinking about how to reach seniors who have devoted their life to inventing something amazing, or have discovered a phenomenon in this mysterious universe of ours … but because they are “just the old guy or woman next door” no one cares. A lot of seniors have died with an important solution or invention left in their garage — boxes of papers and gizmos — that even their kids don’t know what to do with. Wouldn’t it be great to give… Read more »
Robert DiPietro
BrainTrust

Boomers are focusing more on experiences than material purchases but that doesn’t mean the experiences don’t need supplies. Retailers should focus on marketing goods that support those experiences — a must-have travel jacket, tech that helps with your travel, etc. The next wave of goods may be Boomertech.

Liz Crawford
BrainTrust

I agree that Boomers are looking for ways to declutter, simplify and enjoy. Boomers are entering a new phase of life. Toward that end, it may be more productive for retailers to look to the need gaps among this cohort. What about a trade-in proposition? Like trading in an old car.

Trade-in your old sofa, chairs, curtains, whatever, in exchange for value toward new merchandise. Encourage them to start anew with furnishings, appliances and accessories that accommodate their new phase of life.

The old stuff could be donated, the resulting “discount” is the incentive for them to refresh.

Gene Detroyer
BrainTrust

My wife and I are Boomers. We need nothing more in the way of material things. We continually focus on experiences. When thinking about spending money the thoughts are always, “That could be a dinner out.” “That could be a vacation to … ” “That could be a stay-cation.” “We can take our grand-kids to … ” Unlike our parents, we find buying THINGS is not living, it is collecting.

Ian Percy
BrainTrust

Yes, “experience rules!” and retail needs to get on board with that or lose out big. But let’s be clear, this is not the “experience” where we all wear the same colored tour hat, sit in the same seat on a bus day after day and follow someone with flag who half the group can’t hear anyway. That may have been our parent’s happy experience but it is not what today’s seniors are looking for.

If retail is to create its version of experience it also needs to stop relying on technology. No one counts ordering something from Amazon as a treasured memory that they’ll proudly tell their grandchildren about. In short, give people something to talk about!

Anne Howe
BrainTrust

Retailers like REI and Dick’s Sporting Goods have been helpful partners in getting many Boomers I know (including me) ready for travel adventures. From steadier hiking shoes to more effective bug spray to shirts that help us avoid too much sun, we’ve been experiencing retail the way it should be — (read: HELPFUL).

I like Liz Crawford’s examples on trade-ins. Most of my fancy clothes have hit the resale shops and I spend that money on golf gear and greens fees and gardening.

The one area where retailers of all types can win is in creating events around themes that make sense to us and INVITE us Boomers into your stores. We’ve got time to be there.

Mark Heckman
BrainTrust

I am an advocate of brick-and-mortar retailers specifically focusing on managing the customer experience, whether it be for Boomers, Generation Xers or Millennials. The larger motivation for doing so represents a pure point of difference from those selling online or those occupying the “pure price” marketing position.

However, creating a shopping environment that appeals to shopper’s emotional and sensory needs requires a deep understanding of what truly motivates various shopper groups and applying that knowledge to shopper engagement.

I feel it begins with assigning a specific, senior-level individual that has both a background in shopper psychology and retail operations to that task. These folks are not easy to find, but are truly in position to harness the right information about shoppers and translate that knowledge in cogent, doable programs and practices.

Jerry Gelsomino
BrainTrust

As a qualified senior, I don’t have a need for more “stuff.” as a matter of fact I’m trying to empty all the storage around me. My bucket list, however, is growing with things I want to still “experience” in my life. I’m sure plenty of seniors feel the same way.

Susan O'Neal
BrainTrust
4 months 15 days ago
The marketing and retailing of consumers goods has always been about the selling of an “experience.” Most retailers have always understood this and have evolved to keep people in the store longer believing that experience will yield sales — wine tastings and food bars at Whole Foods, the high-end apparel retailer that offers you a glass of wine while you shop. But it’s not as as simple as that, retailers face two specific challenges: Balancing the competitive advantage (in many cases) of their in-store experience with the pressure to grow online sales and maintain the same experience. Turning those experiences into sales — an objective they share with the manufacturers of the products they sell. It used to be (still is) the primary objective of most advertising to promise that merely acquiring or consuming products will deliver the consumer’s desired experience of — say — being cool, or healthy or adventurous. This is still very true for many products. For example, healthy and organic food sales are on the rise but Americans still face an obesity epidemic. The act of buying and consuming the organic products by itself produces the “experience” of being healthy. What this article does a good… Read more »
wpDiscuz
Braintrust
"The next wave of goods may be Boomertech."
"The one area where retailers of all types can win is in creating events around themes that make sense to us and INVITE us Boomers into your stores."
"But let’s be clear, this is not the “experience” where we all wear the same colored tour hat, sit in the same seat on a bus day after day..."

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