2. Introduction
Welcome to a unique time in the history of retail. A time when one
single customer segment enjoys unprecedented purchasing power –
not only for itself, but for three other distinct segments.
A unique and historic dynamic has emerged that enables retailers to
actually reach four different customer segments all through one
powerful new consumer: the new "Multi-Generational Shopper."
The Multi-Generational Shopper has substantial disposable income,
buys for themselves along with three other segments and, for the time
being, is underserved and undermarketed to by retailers.
In short, retailers are ignoring the biggest spenders of them all.
Retailers are doing very little to take advantage of this unique
opportunity. But this could be great news for you – and a chance to get
in early on perhaps the largest sales opportunity ever. The implications
for retailers who can successfully leverage this dynamic are huge in
terms of increased near-term sales and longer-term market share
dominance.
Meet the New Multi-Generational Shopper
The Multi-Generational Shopper overlaps with the Baby Boomer
segment. Whereas Boomers are recognized as 38–56-year-olds,
the Multi-Generational Shopper typically falls in the 45–64-year-old
category.
The Multi-Generational Shopper typically is distinguished by the
following characteristics:
• They have one or more elderly parents
• They have children in their 30’s
• They have an average of five grandchildren
And they spend money on goods and services for each one of these
segments.
That’s four generations, including themselves, all needing to be fed,
housed, clothed, medicated, entertained and provided for. Today, the
Multi-Generational Shopper is footing a larger piece of the bill for
everyone.
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3. This is a powerful population marketers must address. Yet historically,
marketers haven’t done a particularly effective job reaching this
segment. Very few marketers seem to have the Multi-Generational
Shopper on their strategic radar – unaware of the enormous influence
they have over the entire family’s buying behaviors.
This opportunity is largely untapped. Retailers simply don’t target these
people – unless the retailer is selling denture crème or some other
product designed specifically for the mature market. Retailers and their
agencies continue to adhere to the idea that all signs of economic life
end at about age 50. That’s how they tailor their marketing messages.
That’s how they buy media.
It’s true that the healthcare companies do a good job targeting those
50-60 years old, but only as buyers making decisions for themselves.
Retailers, particularly today’s drug stores and department stores with
multi-generational merchandise, are missing a huge sales opportunity
by failing to acknowledge the multi-generational shopper in promotions
and marketing.
As a forward-thinking retailer, you need to act now, before your
competition, so you can take advantage of this emerging and huge
sales opportunity today, and own substantial market share for years to
come.
Enormous Buying Power
Have you ever thought about how much buying influence and power
this 50-something-year old shopper has over other consumer
segments? On any given day, they might buy baby furniture for a
grandchild, a digital camera for an adult child, a first computer for their
elderly parents, and pick out a new car for themselves.
Multi-Generational Shoppers just might be the biggest spenders of all,
yet most retailers haven’t been paying attention. They have the money
to buy what’s being sold today, and they’re spending it on all
generations within their family. Yet, retailers continue to target the
coveted 18-to-34-year-old and 25-to-49-year-old age groups. If that’s
you…you’re missing out.
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4. Consider the following statistics:
• The total buying power within the mature market will
increase from about $1.6 trillion in 2002 to 2.1 trillion in 2007.
(Packaged Facts)
• The buying power of those aged 55-to-64 will grow faster than
any other age group, and will reach $1.3 trillion by 2007.
(Packaged Facts)
• In 2002, those aged 55-to-64 were responsible for 55.1% of
all buying within the mature market. The buying power of this
segment will grow faster than any other age group and will
reach $1.3 trillion by 2007. (Packaged Facts)
• There are 45.6 million grandparents aged 55+, who spent
a total of $22.8 billion on their grandchildren in 2002.
This is predicted to climb 30.9% to $29.8 billion in 2007.
(Packaged Facts: 2003)
• 37% of Baby Boomers in the near future will be responsible
financially for parents or children during retirement.
(Allstate Financial)
This one shopper can generate four separate revenue streams for
your business. For every one Multi-Generational Shopper to which
you market, you’re actually promoting your products to four different
segments.
Yet, their formidable spending power, this segment remains largely
underserved. And, this new generation of Multi-Generational Shoppers
is not only among the wealthiest segment of society, but they also tend
to be proud of their generosity.
Take a look at the credit card statement of today’s typical 50+ year-old
shopper and you’ll be stunned by the variety of purchases. A crib; a
new pitching wedge; an orthopedic chair; a DVD player. One person
bought all these different things? Went to all these different stores?
Says Alice, a 60-year-old grandmother, "My mother is in a nursing
home. I control all her finances – do all her shopping. I buy her
clothing, medicine, candy – everything, you name it. And with three
grown kids, I can’t even begin to tell you how much I spend on my
eight grandchildren."
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5. Items Purchased For Grandchildren During
The Past 12 Months
1999 2002
Clothing 74% 87%
Books 60% 80%
Fun food/snack food/
fast food N/A 78%
Educational toys
(not for computer) 29% N/A
Any other toys 38% 76%
Magazines 23% 32%
Music, CDs, tapes N/A 48%
Videos, DVDs N/A 45%
Jewelry N/A 37%
Video games N/A 31%
Computer software 18% 28%
Other electronic devices
(radios, CD players) N/A 28%
Source: AARP
A Growing Market
The fact that the 45–to 64-year-old segment is spending money on
themselves and on others within their extended families is just part of
the story. Their real value hits home when you look at how this
already large segment is growing.
• From the years 2000 to 2010, the 50+ population will increase
by 37%. That’s three and a half times the growth rate of the
general population. (Selling To Seniors – 3/03)
• Each year, five million Americans turn 50 and another 5 million
turn 55. (Selling To Seniors – 3/03)
According to the AARP, A record number 70 million Americans – about
one-third of all adults – are grandparents. Overall, grandparents today
are a $35 billion market, and this is only expected to grow as the
population ages. Today, the average age of a first-time grandparent is
47. And with today’s life expectancy of 76, this generation of elders
may have as much as 30 years of grandparenting ahead of them. Yet
retailers are paying little attention, allocating few marketing dollars to
them.
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6. Financially, their children’s educations are paid off. Chances are the
house is, too and their nest egg is coming along nicely. Many are
pre-retirement and still draw a paycheck. In other words, they have
money to spend.
More Households Are Multi-Generational
A growing number of households are also multi-generational.
According to the U.S. Census Bureau, as of 2000, there were 3.9
million multi-generational households in the US. Some 65% of those
households consist of grandparents, their child or children, and
grandchildren. And these grandparents are more likely to have parents
who are still alive, so there are four generations with which to contend.
What To Do About It
Retailers are at a strategic fork in the road – and most are doing very
little about it. This is not only the emergence of a new buying segment,
but a market with more buying power and more buying influence, than
any in history. Those who have recognized the opportunity presented
by this phenomenon known as the Multi-Generational Shopper are
getting in early on perhaps the largest sales opportunity in years.
Retailers who don’t act now will miss out.
Now is the best time to get a large piece of this segment while it’s still
early. Most likely, your competition is over-marketing to younger
consumers, even though there are less to go around and they don’t
really have the wealth and discretionary income as the older
consumers. If you are first to target this segment, you are more likely
to get the rewards.
Basic Strategies
Direction To Your Agencies
Direct your agencies to target the Multi-Generational Shopper.
Consumers in the 45–64-year-old age group have the money to spend,
they spend it on four consumer segments, and this category is just
going to grow larger in the coming years.
Expand Your Media
Segment or splinter off some of your media buys to media with older
demographics. For example, if you’re a retailer of kids clothing,
consider not only the media that caters to the baby’s parents, but also
media that caters to their grandparents. Not only do they help their
children pay for their grandchildren’s clothing, they’ll often advise them
where to buy it. Include all media – radio, television and print.
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7. Target Your Creative
Acknowledge the multi-generational influence in ads. For example,
retailers in the home decor category could show a mother helping her
adult daughter select a new kitchen appliance. Show the baby boomer
as part of the shopping experience along with other family members.
Acknowledge how active these shoppers are in the lives of the other
generations.
Define The Message
Learn how to develop messages for the Multi-Generational Shopper, or
find an agency that does. These shoppers don’t respond to the same
messages you send to teenagers or young adults.
Simply put – don’t just sell denture crème to grandparents.
The Multi-Generational Shopper exerts great power in the marketplace
because of their relationships with others combined with their healthy
wallets. This constitutes a new market for your business to tap, and
this a unique approach you need to look at to expand your market and
increase your sales.
Once retailers accept the Multi-Generational Shopper for the
enormous buying influence he or she has, the marketing mix can begin
to reflect it. Only then will cash registers begin to ring out with the
sound of a single person spending for four generations.
We Invite You To Learn More
To gain a full appreciation for what fresh and innovative strategic
thinking can do for your company, Nova Marketing invites you to
visit our Web site: www.novainc.com. Or simply call 617.770.0304
and ask for:
Greg Jones, extension #136
Email: gjones@novainc.com
Larry Green, extension #121
Email: lgreen@novainc.com
About Nova Marketing
Nova Marketing is a retail focused, international marketing and
advertising firm that partners with retail companies to provide a straight
forward approach to increase market share, capitalize on customer
life-time-value, and improve overall promotional sales performance.
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8. Founded in 1992, Nova Marketing is internationally recognized for their
emphasis on creating brand identity, building consumer awareness,
increasing promotional effectiveness, gaining market share and boosting
R.O.I. Nova Marketing offers expertise in all aspects of retail marketing and
advertising, multi-channel initiatives and store design.
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