The country is on the verge of a brave new Boomer-consumer world, and economists and marketing experts are working overtime trying to predict the next big buying pattern.
The 77.3 million Baby Boomers — those born between 1946 and 1964 — have influenced culture, music and fashion, among other things, at every key moment in their lives. Gerber baby food was born when there were four children per mom. Fast food took off when Boomers were teenagers; Toyota became a must-have economy car when the Boomers were student-activists. Nike became the shoe to have when they were yuppies. At middle age, Boomers became coffee snobs and helped propel Starbucks.
Now that they are aging, Boomers are ushering in a “golden age” for tourism, community college education, health care, biotechnology, retirement housing, pharmaceuticals, entrepreneurialism and more, says Brent Green, CEO of Brent Green & Associates and author of “Marketing to Leading-Edge Baby Boomers” and “Generation Reinvention.”
Still, experts disagree about how Boomer consumerism will play out. Some say the focus of spending will be on health care and long-term living.
“Consumption patterns are going to change away from cars, and nicer cars, and second homes and kids’ college to health care and stretching every dollar you have in anticipation that you live to be 90,” said Tom Binnings, Summit Economics economist. “It’s been happy-go-lucky to ‘Oh no, I have 40 years to live.’”
But Boomers account for more than half of all discretionary consumer spending today, Green says. If they move away from some buying patterns, they will find others.
“This generation will reduce spending in some consumer categories such as home furnishings,” Green said. “Spending reductions will be counterbalanced by dramatic spending acceleration in others.”
Boomers are guaranteed to change how health care is delivered, Binnings said. Today the largest percentage proportionally of health care consumed is by people over age 55. But today’s model of Medicare cannot sustain the coming Boomers, he said. An estimated 1.5 million Boomers are signing up for Medicare each year.
When Social Security retirement age was established at 65 in 1935, there were 6.7 million Americans over age 65 and life expectancy was 58 for men, 62 for women, according to the 2011 “Aging in El Paso County” report by Tucker Hart Adams, Summit Economics economist. Baby Boomers, who began turning 65 in 2011, will live, on average, another 18 years.
That means Boomers will have to make tough choices about spending their own money on health care add-ons — things not covered by baseline Medicare, Binnings said. That kind of cash toward health care is likely to curtail spending on houses and cars and “toys,” he said.
“I can assure you that when (health care) resources are limited, it will be rationed and it will not be our parents’ form of health care,” Binnings said. “That is one thing I am convinced will occur.”
But the shift in buying may be toward lifestyle consumption, Green says. He predicts explosions in fitness facilities, personal trainers, nutritional supplements, TV shows about wellness, medical spas and alternative medicines.
Boomers, he said, will want more than life expansion. They want to stay healthy until the very end and then quickly pass away.
“A keystone Boomer value, left over from the ‘70s human potential movement, is self-empowerment — and the burgeoning age-management industry squarely addresses this value,” Green said.
Colorado Springs has the assets to become an international test market and incubator for the “longevity revolution,” Green said.
The Boomer population in El Paso County increased nearly 40 percent from 2000 to 2010. That’s double the increase of the total population, according to Adams’ report.
Boomers will be in search of lifestyle pursuits, adventure vacations, and natural and energy-efficient products. Sixty-seven percent of Boomers believe their best years are still ahead of them.
“When the Boomers focus their wealth on shared goals, such as the need to see the world before they die, billions of dollars will flow,” Green said.
Aside from tourism, housing will be a big boon. Boomers likely won’t be buying second homes, said Dave Csintyan, founder and CEO of The Csintyan Group. He will be a presenter at the upcoming International Economic Development Council webinar on harnessing community assets for a growing senior demographic.
Boomers will not want to drive 10 miles to a grocery store, Csintyan said. For all the past decade’s talk about more urban and green living, it just might be the Boomers who pave the way.
“I think what is important to Boomers is this whole concept of sense of place — it will force neighborhoods to rethink conveniences,” he said.
No matter how it plays out in buying patterns, most experts agree that Boomers, as they always have, are forging a new social revolution around aging. Because of them, generations that follow will experience old age as more of an opportunity rather than a liability, Green said.
“Boomers will challenge institutionalized ageism and even economically penalize those who discriminate against and marginalize older adults,” he said. “Fifty years from now, this nation will be a lot more inclusive and appreciate older adults.”
10,000 people will turn 65 every day for the next 18 years.
Baby Boomers spend about $2.3 trillion a year and own about $28 trillion in assets.
The fastest-growing segment of users on Facebook in the past two years has been female Boomers.
26 million Boomers will relocate when they retire.
Boomers are starting new companies at the rate of 10,000 per month, 16 percent faster than any other generational group.
Source: Brent Green & Associates