Boomers Still Wield Spending Power
CHICAGO -- Millennials have been grabbing the spotlight as the new sought-after customer, but Baby Boomers still account for more than 50 percent of consumer packaged goods (CPG) spending.
Older consumers spent more than $200 billion across shopping channels in the last year alone, according to a new IRI Times & Trends report, Aging America: Carving Out Growth in Mature Markets. This figure will only grow as the population of Americans aged 65 and older is on track to double during the next 25 years, the report noted.
"By 2020, annual CPG spending by Boomers and seniors will surpass $230 billion," said Susan Viamari, editor of Thought Leadership at IRI. "Health care-related spending represents a significant share of overall CPG spending for mature shoppers, so it is crucial for CPG marketers to focus on proactive wellness and disease state management to activate these shoppers. With this type of spending on the table, even a fraction of one share point can easily translate into hundreds of millions of dollars."
Taking a closer look at their baskets, health and wellness resonates with these consumers. Baby Boomers are not only buying prescription medicine and shopping for typical health care products, but they are also investing in a healthier lifestyle. As a result, "healthier for you" products and services have emerged as a significant opportunity, according to the Chicago-based research firm.
IRI's latest New Product Pacesetters study found that "healthier for you" products are not limited to the health care aisle. The top-selling food launch for 2013 was Dannon Light & Fit Greek yogurt, a yogurt that has twice the protein of traditional yogurt, with only 80 calories. Among non-foods, the top spot went to L'Oreal's Advanced Haircare, a line of products that make hair more beautiful by enhancing hair health.
Like their CPG suppliers, retailers are innovating to serve this market, too. For example, drugstore chain Walgreens recently partnered with GlaxoSmithKline to launch "Sponsorship to Quit," a free online smoking cessation program, according to IRI.
In addition, older consumers are embracing proactive self-care items. They are investing disproportionately in a wide range of preventive care and simple health care solutions. Sales of products, such as gastrointestinal liquid, home health care/kits, vitamins and internal analgesics, are showing exceptional growth among the mature marketplace, the report explained.
"It's important to remember that mature consumers want to achieve and maintain wellness, but they are not interested in the latest fad," Viamari said. "When you have more than 9,500 new brands hitting retail shelves each year that are touting new ingredients and benefits, it can be overwhelming. That's why clear communication of product benefits, product uses and value is absolutely essential with these shoppers."
In terms of marketing, older consumers still rely heavily on traditional media, such as circulars, coupons from home, and in-store signs or displays when making brand decisions. However, marketers should not rule out digital media. More than 27 million people over the age of 55 are engaged in social networking, and nearly 71 percent of Boomers and 59 percent of seniors visit social networking sites on a daily basis.
"There's no question that the mature market is poised for significant growth," Viamari stated. "The trick for marketers is to get a good grasp on the aspirations, challenges and attitudes that mark this unique and mature marketplace."