By Susan Viamari
Let’s be honest. Many of today’s marketers are focused on millennials and Generation Z, eager to understand these newer, less-familiar generations who are in the midst of developing shopping habits. Millennials even have major spending power – projected to hit $240 billion by 2022.
Despite the fact that millennials have overtaken boomers in terms of size1 and Gen Z represents more than 20%2 of the U.S. population, baby boomers make up one-quarter of the U.S. population3.
This means they still have a lot of spending power – well over $300 billion!
Baby boomers currently account for nearly one-third of total edible and non-edible consumer packaged goods (CPG) spending4. Where are these dollars going, and what can CPG manufacturers and retailers do to better engage them?
Boomers by the Numbers
Driven by both necessity and desire for self-care, boomers are increasingly focusing their attention – and spending – on health and wellness. Over 3 million baby boomers will reach age 65 every year until 2029, and 10,000 boomers will turn 65 every day until 20305. By 2030, 70 million people in the U.S. – more than 20 percent of the total population – will be over 656.
Chronic disease is increasing as baby boomers age. By 2030, 25 percent of boomers will be living with diabetes, and 33 percent will be obese7. Half of all baby boomers will suffer from arthritis, and 60 percent will require treatment for multiple chronic disorders8.
The U.S. general population and baby boomers, in particular, have a heightened awareness of how diet impacts overall wellness. Shoppers are seeking healthier choices but also a balance between wellness and indulgence, in the form of better-for-you treats and other products that help them live longer –and more exciting – lives. This creates vast opportunities for CPG and over-the-counter healthcare product manufacturers.
The trend toward self-care and desire to control personal wellness through diet is a positive development because there is going to be a sharp decline in caregivers and medical personnel, as the bulk of nurses, physicians, medical technicians and caregivers are baby boomers. As they retire, a shortfall of medical personnel is inevitable. Knowing this, many boomers are looking to healthier food choices to self-treat chronic conditions and avoid future health issues as long as possible.
Engaging Shoppers Across Generations
Boomers are ripe for engagement – and so are their younger counterparts. Below are four key areas that CPG manufacturers and retailers need to keep at the forefront of their innovation and marketing strategies. In doing so, they will be well-equipped to reach baby boomers, millennials and Gen Z-ers alike.
- The shopper has changed.
Chain drug retailers have done a nice job of building share and loyalty among boomer shoppers and should continue to serve their needs. Marketers will need to embrace a more personalized approach with new millennial and multicultural consumers, both to bring back trips and stop the leaky basket. Investing in segmentation and personalization opportunities will enable marketers to answer many important questions, such as “Which generations prefer which flavors and forms?” and “How do attitudes and behaviors around private label differ across my core shoppers?”
- Self-care dominates consumer thinking across generations.
With the increased focus on self-care across aisles and generations, the shift toward smaller footprint stores and the growth of e-commerce, marketers must understand what SKUs should be on the shelf versus online, as well as which products and forms different generations of shoppers prefer. Better data and analytics let marketers answer questions, such as “What are the optimal brands and UPCs to promote together? By season? By demographic?” and “What forms/pack types do my new buyers prefer?
- Personalization is the way to win.
Opportunities for personalization are greater than ever before. Getting it right means providing the right message and offer to the right consumer at the right time. This means really understanding purchase cycles. Embracing frequent shopper program (FSP) data as a foundation for CPG marketing strategies and integrating it with traditional databases allows retailers to create powerfully targeted marketing programs across the consumer’s path to purchase.
- Technology makes it all possible.
Drug retailers have collected FSP data for years, but the cost and complexity of tapping into its insights have made true adoption expensive and difficult. This is no longer the case. All retailers and manufacturers can now embrace the opportunities technology provides to integrate data from disparate sources to uncover new insights, target the right audiences and create more customized in-store and online programs that make it easier for shoppers to choose their products.
Doing all of this well is challenging, and it requires significant collaboration between retailers and their suppliers, from planning all the way through to campaign optimization and ultimately conversion. But the rewards are worth it. IRI’s benchmarking studies have shown that effective personalization strategies can improve return on ad spend by as much as 70 percent.
Knowing your shopper and meeting them where they are on their personal wellness journey is not only possible but essential.