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Sep 1, 2008
The study, "Generation Buy: A Close Look at the Boomer Consumer," was commissioned by TV Land, a division of Viacom Inc.'s MTV Networks. It was conducted by OTX, a global research firm. Larry W. Jones, president of TV Land, unveiled the study at the National Press Club, accompanied by Kim Alexis, host of TV Land's original reality series, "She's Got The Look," and Beverly Johnson, a judge on the same series.
Not only are 40 and 50 year olds spending more on themselves per month than Millennials and Gen Xers, they are spending twice as much as their younger cohorts on others in their lives. With so many people to shop for, boomers are making several multigenerational purchase decisions at once. And contrary to common assumptions, they are far less brand loyal than Millennials and Gen Xers.
"While we have always known that it's a mistake to underestimate the power of people in their 40s and 50s, Generation BUY once again shows us that Boomers are a major source of consumerism in this country," said Jones. "Knowing that this generation has so many dependants, the means to buy the products that appeal to them and the willingness to try new brands is powerful information to share with our marketing and advertising partners."
The information also has ramifications for retailers. "This research once again dispels myths about 40 and 50 somethings," said Laurel Wichert, VP of research for TV Land. "The lack of brand loyalty, coupled with their purchasing power, makes the 40 to 59 audience an extremely desirable target that should not be overlooked."
The study revealed three traits of the 40 to 59 year old consumer, which it calls, "Promiscuous Purchasers," "Free Agent Shoppers," and, "Savvy Switchers." More often than not the breadwinners in the household, Boomers make most or all of the family spending decisions.
With the large amount of purchase decisions they are making for others spanning multiple generations, they are, "Promiscuous Purchasers," according to the study's authors. The research found that people in this age group spend more than three times more per month on spouses than adults under 40. Those in the 40 to 59 group spend, on average, $514 a month on spouses, compared with an average of $169 by those under 40.
In a similar comparison with those under 40, the 40 to 59ers spend nearly twice as much per month on kids ($295 versus $158) and three times the amount per month on teen children ($494 versus $136). With so many purchase decisions to make for the household, these Promiscuous Purchasers are seen as an important marketing sector, even when they are not the prime target.
The study also found that 40 and 50 somethings are more open to new brands and less brand loyal than people under 40, making 40 to 59ers, "Free Agent Shoppers." More than one quarter of Boomers said they are not at all brand loyal, versus 21 percent of Gen X and Millennials.
In fact, Gen Y are the most likely to say that once they have made a commitment to a brand, they will stick with it, no matter what. The willingness of 40 and 50 year olds to buy new brands carries across virtually every product category, including electronics, personal care products, restaurants, automobiles and more.
When compared to the generation that came before them, these Free Agent Shoppers have very different spending habits. No longer will this age group buy the same products based on lifelong brand decisions, and spend less as they age. This demographic is redefining brand loyalty and determining purchase decisions based on the effectiveness of products.
Today's 40 and 50 somethings stick with a product for as long as it's good and fulfills their complex needs. They are not afraid to change for something they feel will improve their lives.
Baby Boomers consider themselves open minded and evolving. This is core to their identity and key to their purchasing behavior. Another key finding of the study is that while Boomers are very open to new brands, they will not switch just because something is new.
Adults 40 to 59 are, "Savvy Switchers." The overwhelming majority, 91 percent, want the brand to provide more value, versus 83 percent of Gen X and Millennials. Forty to 59ers want substance over style and care about the promise of a brand over the image of a brand.
Boomers will consider new brands if that brand is a better alternative. The product or service must be more useful, functional and provide the most benefit/value.
Unlike Millennials and Gen Xers, people in this group are less likely to be influenced by the notion that the brand is more prestigious or the latest style. Instead, their purchase decisions are based on reliability and quality. The product/service needs to have the best features, not necessarily the most features.
Since adults aged 40 to 59 tend to make purchasing decisions informed by what products and/or services will make life easier for them, it follows that the advertising that resonates with them is the kind that explains the product's capabilities and describes why the product is superior.
Boomers are less interested in teaser ads that create a mood but do not offer much in terms of substance. While this demographic is more likely to enjoy ads with humor than their younger cohorts are, ads with popular songs and celebrities are less appealing.
OTX is a global consumer research and consulting firm.
Topic: Business Strategies
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