BrainTrust Query: The Disappearing Boomers
By Bill Emerson, president, Emerson Advisors
Kimberly-Clark, in conjunction with Walgreens and Rite-Aid, has a project to understand and learn from what the shopping experience is like for seniors. Test subjects, according to an article in The Wall Street Journal, put on thick glasses to blur their vision, put unpopped popcorn in their shoes, and, tape their thumbs to their palms, all to emulate the senior experience.
The Baby Boomers, defined as those born between 1946 and 1964, are getting older, entering retirement age, and preparing to live on Social Security and investments. And their habits are changing. In a recent Gallup poll, the average daily spend by the Boomers has gone from $98/day in 2008 to $64/day in 2009. Obviously the recession has played into this, but the more important news is that the Boomers are no longer the biggest spenders.
So what should retailers and product manufacturers be focusing on to prepare for this inevitable trend? The real question is “Are the Boomers my target market?” If your business model today relies on the Boomers, here are some obvious things to consider:
Real Estate: If they are spending less and are less mobile, do you really need to have as many stores? Do you really need to open more?
Internet: How big is your Internet business? Can it replace the lower business in the stores? How easy is your website to navigate overall and particularly for people with diminished vision?
Sales and Inventory Plans: With the exception of big gains in market share, the days of “blowing the doors off” are probably over for anyone focused on the Boomers. Emphasis has to be on margin and profitability.
Navigation in the Store: How easy is it to get around the store? How easy would it be with a bum knee or with arthritis?
Fixturing: The so-called “strike zone” or most productive selling space is from 3′-6′ off the floor. This will no doubt become the “selling zone” over time, with all other areas becoming the “markdown staging zone.”
Apparel Sizing: Gravity always wins. The size scale will surely shift to the right over the coming years. Are you looking at and reacting to sales by size?
Apparel Silhouette: Sleeveless? Low rise? Cinch waist? Probably not big volume drivers in years to come for this market segment.
Product Packaging: The lawyers and Loss Prevention folks have made opening most packaging into a physical fitness routine. Do you think your customers will buy something they can’t open?
Labeling: If they can’t read the label or tell what it is, will they buy it? Ditto for ticketing, signage, and receipts.
While not immediate, these trends are surely going to have a profound impact on how many retailers and manufacturers operate over the coming years.
Discussion Questions: Do you think drastic changes will be needed for retailers to serve aging Boomers? In what areas do you see the most urgent need for change?