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point - bill napier
who is buying all your stuff?
Baby boomers, that's who
SHOW ME THE MONEY
Hey retailers, where is all the money? I’ll “show you the money”. I’ll write, show you the facts, and you decide if your marketing is on/OFF target.
BOOMERS OVER 50 YEARS OLD BUY 50% OF EVERYTHING AND CONTROL 70% OF ALL DISPOSABLE INCOME
Recently the digital marketing industry went into a meltdown when Procter & Gamble announced they were ditching digital … because it was NOT moving the needle .. AT ALL!
BOOMERS OVER 50 YEARS OLD BUY 50% OF EVERYTHING AND CONTROL 70% OF ALL DISPOSABLE INCOME
Recently the digital marketing industry went into a meltdown when Procter & Gamble announced they were ditching digital … because it was NOT moving the needle .. AT ALL!
PROCTER AND GAMBLE CUT $100,000,000.00 OUT OF THEIR BUDGET ... ELIMINATING DIGITAL ADVERTISING BECAUSE IT DOESN’T WORK, AND THEY ARE THE LARGEST ADVERTISER IN NORTH AMERICA …. GOT YOUR ATTENTION YET?
P&G Cuts More Than $100 Million in ‘Largely Ineffective’ Digital Ads - CLICK TO READ
Who are you marketing to? Not Me and I’m one of those 70-percenters.
I’m a Boomer, as is my wife, we watch TV, we look at the messages and especially the messengers/actors delivering the messages ... most of the time with disbelief. We always ask ourselves who are they speaking too? And more often than not, we have NO desire to engage with those brands, here’s why.
They aren’t speaking to us, they aren’t even trying and most often they are offending our intelligence.
I roll my eyes when brands depict men as DWEEBS –
I’m a Boomer, as is my wife, we watch TV, we look at the messages and especially the messengers/actors delivering the messages ... most of the time with disbelief. We always ask ourselves who are they speaking too? And more often than not, we have NO desire to engage with those brands, here’s why.
They aren’t speaking to us, they aren’t even trying and most often they are offending our intelligence.
I roll my eyes when brands depict men as DWEEBS –
“ A person regarded as physically and socially awkward and has little confidence, sometimes they're just plain foolish,
And women as
Lacking the intelligence and independence, that are supposedly in relationships with these Dweebs, rolling their eyes at these men because of their ineptness and/or childish behaviors, accepting they’re incapable and that’s supposed to be alluring or attractive to them?
REALLY?
None of these characterizations fit my perception, or my wife's perception, of what men and women are, or as they should be depicted, as I have come to appreciate and experience them in real life. I think it’s just plain insulting to all genders, but that’s me.
Why is this happening?
My guess is that the people creating these types of marketing platforms/messaging are actually targeting themselves, their demographics and not the people with the money, BOOMERS!
Why is this happening?
My guess is that the people creating these types of marketing platforms/messaging are actually targeting themselves, their demographics and not the people with the money, BOOMERS!
WHAT DRIVES ME NUTS IS WHEN PEOPLE DON’T DO THEIR DUE DILIGENCE AS MARKETERS
That’s MY perception and thankfully I have a DVR, stream Netflix and I don’t have to watch these characterizations. Plus, I don’t have to do eye-rolls ... all the time ..., which eliminates headaches. It's these targeted messages to a demographic that I think marketers have it mostly wrong and here's why.
The problem as I see it is that everyone, including probably you, are focused on Millennials and most likely your marketing is being influenced by Millennials on your marketing staff that believes they have to focus your marketing dollars on marketing to Millennials. The problem is Millennials don’t have much money if any at all – as I’ve documented here. I get it, they are the largest demographic and you want to be sure you capture their hearts, mind, and soul for your brand/store …. LONG TERM.
But consider this when everyone tells you to spend all your money on them.
OK, I need to clarify, about this age group. I have three Millennial kids and they are very successful and these numbers don’t apply to them as it probably doesn’t for many in this generation. Yes, they are starting to buy homes, improve their financials, find better jobs, but facts are still facts.
By listening to all the Fad Marketing Hype, You are missing out on the demographics that have all the money, NOW, and that’s probably while your sales aren’t growing or worse, shrinking.
It’s NOT the Millennials (as I’ve proven with the above information and link to previous articles Ed and I wrote) it’s the BOOMERS 50+ that have all the money, and you’re not marketing to them and according to VISA, they will drive consumer spending for the next 5-10 years!
The problem as I see it is that everyone, including probably you, are focused on Millennials and most likely your marketing is being influenced by Millennials on your marketing staff that believes they have to focus your marketing dollars on marketing to Millennials. The problem is Millennials don’t have much money if any at all – as I’ve documented here. I get it, they are the largest demographic and you want to be sure you capture their hearts, mind, and soul for your brand/store …. LONG TERM.
But consider this when everyone tells you to spend all your money on them.
- The average 19- to 34-year-old MILLENNIAL has a credit score of 625, Millennials have the worst credit scores of any generation
- The current savings rate for Millennials is negative 2 percent.
- 31.1 percent of all U.S. adults in the 18 to 34-year-old age bracket are currently living with their parents.
- A survey conducted earlier last year found that 47 percent of all Millennials are using at least half of their paychecks to pay off debt.
- AND...Millennials HATE YOUR DIGITAL ADS
- And there is more bad news on Marketing to this demographic HERE
OK, I need to clarify, about this age group. I have three Millennial kids and they are very successful and these numbers don’t apply to them as it probably doesn’t for many in this generation. Yes, they are starting to buy homes, improve their financials, find better jobs, but facts are still facts.
By listening to all the Fad Marketing Hype, You are missing out on the demographics that have all the money, NOW, and that’s probably while your sales aren’t growing or worse, shrinking.
It’s NOT the Millennials (as I’ve proven with the above information and link to previous articles Ed and I wrote) it’s the BOOMERS 50+ that have all the money, and you’re not marketing to them and according to VISA, they will drive consumer spending for the next 5-10 years!
The 50-plus and 60-plus population is clearly playing a large role in consumer spending and older consumers are going to become more significant as these trends intensify,” says Wayne Best, chief economist of Visa.
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In the first quarter, Americans 55 and older accounted for 41.6% of consumer spending, up from 41.2% late last year and 33.5% in early 2007, according to government and Moody’s data.
Toss in 53- and 54-year-olds and the boomer- and-older set – like me comprise about half of all consumption, according to visa and Moody’s analytics. (OUCH, Oh the money I spend on Amazon)
Toss in 53- and 54-year-olds and the boomer- and-older set – like me comprise about half of all consumption, according to visa and Moody’s analytics. (OUCH, Oh the money I spend on Amazon)
WOMEN BOOMERS INFLUENCE OVER 80% OF PURCHASE DECISIONS YET YOU'RE SPENDING LESS THAN 5% OF YOUR MARKETING TO INFLUENCE THEM
Just the facts
- 70% of the disposable income in the U.S. is controlled by baby boomers. (Source)
- There are 74.9 million Boomers -- ages 51 to 69 -- in the U.S. (Source)
- 50% of the U.S. population will be over the age of 50 by 2017. (Source)
- The 50+ population has $2.4 trillion in annual income in the U.S., which makes up 42% of all after-tax income. (Source)
- According to the U.S. Bureau of Labor Statistics, boomers account for 48% of consumer expenses each year, which means that if you target them, you can expect a higher ROI.
- According to the U.S. Bureau of Labor Statistics, boomers account for 48% of consumer expenses each year, which means that if you target them, you can expect a higher ROI.
AND ....
- There are 74.9 million Boomers – ages 51 to 69 – in the U.S.
- Boomers own 80 percent of all money in savings and loan associations.
- The 50+ population has $2.4 trillion in annual income in the U.S., which makes up 42 percent of all after-tax income.
- 49 percent of Baby Boomer tablet users and 40 percent of smartphone users made a purchase after conducting searches on their devices.
- 70 percent of the disposable income in the U.S. is controlled by Baby Boomers.
- Baby Boomers will inherit $15 trillion in the next 20 years.
And Boomers are Savvy consumers
When it comes to shopping on mobile, one in four people aged 55 and older do so, according to a report by BI Intelligence, a research service from Business Insider.
Further, 24% of online shoppers fall between the ages of 45 and 54, though that age group represents less than 20% of the population. boomers generate more than 51% of the spending in the United States (and have a total annual economic activity of roughly $7.6 trillion, according to AARP).
Regardless of where or how that 51% of spending occurs, the fact is older consumers represent a sizable and potentially lucrative long-term market base for digital retail.
For instance, boomers purchase half of the computers and two-thirds of the new cars sold annually, according to Bloomberg Business Week. OMG imagine what they could be spending in your store IF you marketed to them?
Baby boomers are expected to inherit $8.4 trillion by 2030, according to research by the Center for Retirement Research at Boston College. This means their spending power is likely going to escalate, and possibly in windfall ways.
So, here’s what I’d do.
- I would suggest you let me pull a demographic profile of your store so you can see “where the money is”.
- Let us perform a FREE Marketing Analysis based on that information and other questions we’d ask. (Yep, no strings attached)
- Supply you with that information and some suggestions on how you can target these Old People with all the money
Or, keep marketing to the Snapchat Generation and see where that gets you.
COUNTERPOINT - ED TASHIJAN
My dear Friend & Colleague Bill,
In the 60’s Bob Dylan penned a song “The Times They Are A-Changin'” and I would encourage the Boomer generation who thought that our parents, congressmen, and people who are now our age–were out of touch dopes–to revisit it.
Alas, there is more to economics than counting the money. The only proven way to predict the future it is to follow the demographics, historical purchase patterns, and common sense. It doesn’t really matter where the wealth is concentrated. That is a red herring. Whether you are rich or poor, old or young, everyone needs a place to sleep, a place to eat and a place to watch television. In other words, everyone needs furniture. They may have less money to pay for it, but they still need it. Let me remind you Bill why you were so successful at Ashley. While those of us in the traditional ranks of home furnishings watched our share dwindle while we proselytized the value of the details of fine finishes and craftsmanship—Ashley pioneered the concept of buy it today, have it in your home tomorrow, and don’t pay for it for several years. This appealed greatly to the 35-44 cohort, and I would argue that this is still a good strategy.
In 2016, Jerry Epperson published the following set of charts chronicling expenditures by age for the various furniture categories. The chart on the bottom left is probably the most instructive because it weights each of the categories. To make a long story short, furniture purchasing peaks in the 35 to 44 age cohort, and declines precipitously from there. With the exception of the outdoor and upholstered chairs, that trend is pretty consistent.
In the 60’s Bob Dylan penned a song “The Times They Are A-Changin'” and I would encourage the Boomer generation who thought that our parents, congressmen, and people who are now our age–were out of touch dopes–to revisit it.
Alas, there is more to economics than counting the money. The only proven way to predict the future it is to follow the demographics, historical purchase patterns, and common sense. It doesn’t really matter where the wealth is concentrated. That is a red herring. Whether you are rich or poor, old or young, everyone needs a place to sleep, a place to eat and a place to watch television. In other words, everyone needs furniture. They may have less money to pay for it, but they still need it. Let me remind you Bill why you were so successful at Ashley. While those of us in the traditional ranks of home furnishings watched our share dwindle while we proselytized the value of the details of fine finishes and craftsmanship—Ashley pioneered the concept of buy it today, have it in your home tomorrow, and don’t pay for it for several years. This appealed greatly to the 35-44 cohort, and I would argue that this is still a good strategy.
In 2016, Jerry Epperson published the following set of charts chronicling expenditures by age for the various furniture categories. The chart on the bottom left is probably the most instructive because it weights each of the categories. To make a long story short, furniture purchasing peaks in the 35 to 44 age cohort, and declines precipitously from there. With the exception of the outdoor and upholstered chairs, that trend is pretty consistent.
Let me remind the reader that the so-called millennial’s are now 21-37. Demographers disagree, but the date range most experts use comes from Pew Research Center, because they are most reputable. They peg millennials as those who were born between 1981 and 1997. And, while boomers and millennial’s are approximately equal in size now, you can see Boomers will drop precipitously in the near future.
To use a hunting analogy, if you were shooting ducks, you need to lead them by shooting in front of them. If you shoot at them or behind them you will miss them every time.
To translate this metaphor into furniture marketing, you better be prepared to start targeting millennial’s. You will get a few boomers who think of themselves as being young at heart. If you watch enough television you will be reminded that we are a culture that celebrates youth. And, whether it is fashion or Technology, the models used are always 10 years younger than the target.
Let’s set aside the facts, figures and statistics for minute and approach this question with common sense. Why do boomers buy less and less furniture the older they get?
To use a hunting analogy, if you were shooting ducks, you need to lead them by shooting in front of them. If you shoot at them or behind them you will miss them every time.
To translate this metaphor into furniture marketing, you better be prepared to start targeting millennial’s. You will get a few boomers who think of themselves as being young at heart. If you watch enough television you will be reminded that we are a culture that celebrates youth. And, whether it is fashion or Technology, the models used are always 10 years younger than the target.
Let’s set aside the facts, figures and statistics for minute and approach this question with common sense. Why do boomers buy less and less furniture the older they get?
- They don’t need it. They have already bought furniture and, regrettably in some ways, the quality is excellent. It hasn’t worn out, and it’s not really out of style.
- It falls under the category of “stuff.” As people age, so do their views on the meaning of life. “Stuff” no longer represents status, but is rather an albatross that weighs you down and requires maintenance. The truth is, most boomers are trying to get rid of stuff, not acquire more. They are dumping second homes, giving away excess furniture, and using junk removal services for decluttering in general. They have recently had to deal with their parents depression era hoarding mentality and do not want to burden their children with the same exercise of disposing of their parents belongings when they pass.
- Unlike technology, there is little obsolescence and furniture. Except for changes in fabrics, sofas looks pretty much the same as they did 15 years ago. Traditional furniture, based on 18th-century styling, is making a comeback—which says a little about how stale our industry has always been when it comes to fashion.
- For simplification, let’s divide boomers into two categories. Those who retire with a great deal of wealth, and those that retire without significant savings. For those worried about subsistence and outliving their money, furniture is the last thing on their shopping list. For those with wealth, they already have nice things and want to spend the money on their children and on experiences.
It’s not all doom and gloom. I have great confidence in home furnishings industry because people will always need what we have to offer. The US furniture industry has grown at a CAGR of 5.6% for the Period from 1970 to 2016, while remaining stable during economic cycles. Our sector has experienced positive year-over-year growth in 41 out of 46 years, an experienced sales decline of greater than 3% in only three periods. This is a very healthy industry that has not suffered disruption like other sectors. And, regardless of external factors, people need to eat, sleep, and consume media.
Now, let me address your condemnation of digital advertising. I agree, that for the most part, Digital advertising is ineffective. Let me remind you that the reason that Procter& Gamble—and everyone else who hopped on the bandwagon —went to digital advertising is because traditional advertising was ineffective. My conclusion is that all advertising is fairly ineffective. I would argue that the reason that advertising doesn’t work is because there are so few differences in products worth advertising. The goal of advertising it is to communicate why your product is different and better and how it fills a real or psychological need. Most products aren’t different and the needs we have today are less likely to be fulfilled by stuff.
You and I each make our living by counseling the home furnishing industry on how to grow their business. While we may different tactics, I think we agree at the essence of success is differentiation. That can take the form of products, Service, convenience or channels of distribution. Anyone or combination of these delivers superior value and it is up to the marketer to communicate what that difference is and why it matters. Marketers must always reinvent themselves, for the times they are changin’.
The Times They Are A-Changin'
Bob Dylan
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Come gather 'round people
Wherever you roam And admit that the waters Around you have grown And accept it that soon You'll be drenched to the bone. If your time to you Is worth savin' Then you better start swimmin' Or you'll sink like a stone For the times they are a-changin'. Come writers and critics Who prophesize with your pen And keep your eyes wide The chance won't come again And don't speak too soon For the wheel's still in spin And there's no tellin' who That it's namin'. For the loser now Will be later to win For the times they are a-changin'. Come senators, congressmen Please heed the call Don't stand in the doorway Don't block up the hall For he that gets hurt Will be he who has stalled |
There's a battle outside
And it is ragin'. It'll soon shake your windows And rattle your walls For the times they are a-changin'. Come mothers and fathers Throughout the land And don't criticize What you can't understand Your sons and your daughters Are beyond your command Your old road is Rapidly agin'. Please get out of the new one If you can't lend your hand For the times they are a-changin'. The line it is drawn The curse it is cast The slow one now Will later be fast As the present now Will later be past The order is Rapidly fadin'. And the first one now Will later be last For the times they are a-changin'. |
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about the authors
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ABOUT ED TASHJIANTashjian Marketing provides senior marketing leadership to the Home Furnishings Industry. It specializes in business analytics and in helping its clients to segment the market, define and communicate a sustainable differentiated value proposition. Get more information at www.Tashjianmarketing.com or call (828) 855-0100.
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Bll is Managing Partner of Napier Marketing Group. He has been the chief marketing officer of several small, medium and large companies throughout his career, most notably Ashley Furniture Industries. Bill is also a featured writer and speaker in the retail industry. His passion is to help retail brands & brick mortar retailers grow their businesses by creating, guiding and deploying successful marketing B2B/B2C solutions integrating traditional marketing with the web/ social media.
He has demonstrated this with his FREE website www. social4retail.com with hundreds of articles and “how-to” strategies for retailers and brands. Bill can be reached at: billnapier@napiermkt. com or 612-217-1297. |
