Boomer Consumers Are Consuming a Lot

THE BABY BOOMERS, WHO CURRENTLY range in age from 45 to 63, are in the prime of power, with one of their number in the White House and legions of others at the top echelons of Corporate America, the military, the courts, the media and just about every other hub of U.S. life. But to Madison Avenue, which historically has worshipped at youth's altar, the boomers are hurtling into the winter of irrelevance.

Increasingly, the 77 million of them are being ignored by advertisers and marketers. They're being elbowed aside, ironically, by 18-to-49-year-olds, the very age group that they, in their younger years, put on the map as the most desirable consumer cohort. But the realities are changing, and any company that ignores them will be doing so at its peril over the next decade or two.

For one thing, the number of Americans over 50 is soaring. By 2015, when all the boomers will be 50-plus, folks aged 50 to 75 will account for 40% of adult consumers, up from 36.8% now. And they will boast the most spendable cash. Yet advertisers and marketers still seem to devote about 90% of their energy to wooing the 18-49 group, and 10% to those 50-plus.

"To most marketers and the management they report to, when you turn 50, you're dead," says John W. Martin, CEO of the Boomer Project (www.boomerproject.com), an online marketing and research organization, and co-author of a book called Boomer Consumer.

Demographer Peter Francese views the imbalance as ridiculous.

Readily granting that the younger cohort deserves greater attention, he says that, in their own self-interest, marketers should rebalance their focus to something approximating 60%-40%.

Does it make sense, after all, for NBC's suits to judge a new TV show like Jay Leno's mainly on its appeal to 18-to-49-year-olds, as some published reports say is the case? Leno's advertisers include companies such as BMW (ticker: BAMXY), many of whose buyers are 50 or older. Leno himself, 59, is a famed car collector, whose vehicles include a 2009 Mercedes-Benz SL63 AMG.

Luxury auto sales have suffered greatly in this recession, and their chances of picking up depend on courting the boomer consumer. The median age of all luxury-car buyers is 52, by some estimates, and shoppers 50 or older account for the highest proportion of purchases or leases of luxury-car makers' most expensive models; they have worked the longest, have accumulated the most assets and have money to spend on themselves.

If Leno's former archrival, David Letterman, were to come up with a Top 10 list of things that people over 50 buy, Depends adult diapers or enSure nutrition drinks would surely make the cut, along with burial plots and long-term-care insurance.

But while the aging boomers certainly will be a bonanza to health-care outfits -- they already account for two-thirds of the spending on pharmaceuticals -- they will be anteing up a lot more for other things. Letterman's own shopping list must reflect the fact that he's a recently married 62-year-old with a six-year-old son (and some embarrassing personal problems, as he disclosed on his show last week).

In fact, the 50-plus set already accounts for 45% of all U.S. consumer spending and, Francese predicts, the figure could ultimately approach 50% by 2015.

The group's spending patterns are often misperceived.

ONE MYTH IS THAT OLDER Americans are much more interested in shedding furniture and housewares than in buying them because most are empty-nesters. The reality: Older consumers account for more than 40% of the money spent on new household furnishings and equipment in the U.S.

In part, this is because two-thirds of the owners of second homes are at least 50 years old, and need couches, tables and cutlery for those getaway places. In addition, one in six families headed by a person over 50 has a member under 18, as more people have children at later ages. At the same time, the recession undoubtedly is forcing more 25-year-olds and 40-year-old single parents to rethink the charms of their parents' homestead.

Bottom line: Older consumers will keep trudging off to Bed Bath & Beyond (BBBY), Target (TGT), Wal-Mart Stores (WMT) and Ikea for years.