Conventional wisdom has long held that when it comes to making money on a product, it pays to market it to young people. In our youth-obsessed society, this shouldn’t come as a surprise.
Companies typically focus on younger demographics not only because they could become customers for life but because they tend to be more tech-savvy and more willing to try new things. As the baby boomer generation enters its golden years, however, a major shift is occurring.
Baby boomers rule!
In 2015, there were more than 75.4 million baby boomers alive in the U.S.–and they aren’t done buying things. According to the AARP, in fact, as of 2013, the U.S. baby boomer generation constituted the third-largest economy in the world.
Every year, people who fall into this demographic engage in more than $7.6 trillion in economic activity. To say that they are out of the loop or not worth marketing to is a major mistake. At long last, companies are starting to realize this–and not just well-established companies that we’re all familiar with, either. These days, some of the hottest startups are deliberately catering to baby boomers, and that’s a trend that’s unlikely to stop any time soon.
As more startups recognize the incredible potential that exists in the baby boomer demographic, more companies are looking for ways to develop easy-to-use products that provide a useful service to seniors. In this way, baby boomers are making out well on this deal too.
Rather than focusing on developing slick, confusing products that millennials will love, many startups are focusing on the over-50 demographic from square one–and many have already done quite well for themselves as a result. Stitch, for example, is a type of social network that connects seniors. Designed to alleviate the isolation that many elderly people face, the app isn’t free. That hasn’t stopped it from becoming wildly popular, though, and it proves that baby boomers are happy to invest in tech products and services.
Plenty of lucrative opportunities
In baby boomers, marketers see many exciting opportunities. The baby boomer generation is considered to be a “sandwich generation” because many boomers concurrently care for aging parents as well as their own children. Not surprisingly, products and services that cater to the care giving market, which is expected to reach $72 billion by 2020, are becoming very popular. Additionally, many existing products and services are being revamped and reimagined in ways that improve seniors’ lives.
Given that the baby boomer market is larger than Japan’s, it makes sense that lots of businesses want to get in on the action. Not long ago, a startup introduced the Jitterbug Smart, a simplified smartphone for seniors that includes safety and health services. Another introduced an electric bike that makes cycling more accessible for the elderly. Other startups have focused on issues that matter to seniors, including home meal kits for special health needs, gyms for the over-50 set and home downsizing services. Other companies, like Glendale Senior Dining, have enjoyed incredible success by focusing on the unique dining needs of senior citizens.
So, does this mean that we should start seeing fewer young people marketing products and more spry seniors doing the honors? That remains to be seen. However, what is certain is that money talks–and baby boomers have plenty of it.
Companies that want to keep growing and expanding in the future are wise to shift their focus to the more than 70 million people who were born between 1946 and 1964 and whose ages currently fall between 53 and 71. For now and for the foreseeable future, these seniors will constitute the most powerful demographic in the country.
Companies that market effectively to them will be the big winners.