Baby Boomers have $7 trillion in wealth, 41% of the value of mutual funds. This incredible wealth will be spent over the next decade and this article identifies who they are and how you can reach them.
You may have heard the term “the Trend is your Friend”. While this has been used with the stock market (meaning, if the stock market trend is headed up don’t short the stocks). This term is also useful for your business. The business trends are where money is being spent and hold the most promise for your prosperous future. Let’s look at some of the macro economic trends concerning baby boomers.
Never Married
According to Mark Penn in Microtrends Squared, 22% of US adults 35-45 have never been married. This group doesn’t cook much and therefore indulges in a lot of takeout while also spending a large amount on entertainment.
Graying Bachelors
A related group are the “Graying Bachelors”, the 50+ year old crowd. “Items they need are new clothes, a new car, and dating coach. They also need to clean the apartment or hire cleaning staff. Seniors are also taking traveling trend to a new level. Silversea cruises have Gentleman Host programs for the 55-plus crowd for the “love boat” experience,” says Mark Penn.
Roomies
According to AARP, older women who may be divorced or widowed are all getting together as roomies for life. The American Community Survey shows that there are now around 2 million Americans over the age of 50 who are living with roommates. “A cottage industry has sprung up in the last few years to help this demographic find roommates. Companies such as Roommates4Boomers, Silvernest and Let’s Share Housing pair renters with homeowners. Silvernest, a Denver-based company, says that 33,000 people have used its nationwide service, which charges users $30”, boomer roomies.
Internet Married
While many women and men are room mating in a platonic relationship, there are many that dating. Older, online daters have doubled from 6% in 2013 to 12% in 2015. The dating in many cases has turned into marriage, which is now a booming, a $70 billion a year business, with many couples on their third marriage (9 million people). Pottery Barn and Target are the top of online registry services, but there are dozens of successful online registry businesses.
Nonagenarians
Nonagenarians are between the age of 90 and 99. Both my mom and dad (now deceased), fit into this category, having lived until 91 and 94, respectively.
People living to their 90s means they will need services for years after they retire.
Wellness
Baby Boomers have taken a large interest in wellness, from many aspects including eating healthy, physical exercise and exercise of their mind. Yoga has doubled from 2008 to 2016 to 36 million people. Yoga classes for seniors, healthy home cooked meals delivered to the door are just two the potential businesses for wellness.
Drones
I’ve went on a limb and said drones will be used for personal transportation in the next 30 years. While the reasons for why I make that claim are for another blog, I do want to point out that drones for delivery are right around the corner.
“If you have a disability, a drone could serve as a health care aide – detecting seizures, high blood pressure, or even diabetes in the way that caretakes now handle patients. We’re not fair away from drone hives in every neighborhood, resting and charging up, ready to be rented on your phone for an errand, such as picking up a prescription at CVS”, say Mark Penn.
These are some of the main areas Mark identified in his book, where baby boomers are spending their dollars. I will describe another trend that I have personally witness taking place over the last couple of years.
Baby Boomers are headed South
As I’ve talked to people in my town of Chicago and former colleagues who reside in the Northeast, I’ve come to a conclusion. Baby Boomers are escaping the cold climates as they retire. This migration will make a huge impact on the cities and states they leave. This is happening for two main reasons, and likely there are more.
- The growth of jobs over the last several years has been in the sunbelt. The lower cost of living and lower taxes has encouraged businesses to relocate to the sunbelt and the companies that are already in the Sunbelt have been expanding. This job growth has encouraged men and women in their 20s and 30s to move to the sunbelt and in time started families. With their sons and daughters being firmly planted in the Sunbelt, baby boomers, upon retiring, have moved to the Sunbelt to enjoy the sunshine and their grandkids. Their money has moved with them. This means an increased need in products and services.
- The rustbelt and the east coast for the most part have high taxes compared to the sunbelt. Baby Boomers, with a focus on having enough for retirement and at the same time, being able to spend on themselves and their grandkids have looked at the high taxes and have said, “I don’t have kids in school, so why am I paying high property taxes. What am I getting for a high sales tax? When I go to visit my son in xyz state, I pay ½ the sales tax I pay now. My kids have move to the sunbelt and I don’t have anything to keep me in this city. If I cut my taxes in half, I have that much more to spend on myself.”
This conversation is going through the minds of thousands upon thousands of Baby Boomers.
The cities and states that have high debt will be in real trouble. The people that have money are moving out of their cities and states. Illinois had the largest outflow of residents in 2017 of any state and it isn’t a one-time occurrence. “It’s not just a one-year blip,” says William Frey of the Brooking Institute. “the declines continue to get bigger from one year to the next.” Illinois loses population
This migration drives the need for higher taxes on the remainder of people. This in turn drives even more people to leave. It is a downward spiral and there will be cities and states that won’t recover.
So, if you start a physical business, make sure you are doing so in a low-cost growing city. And if it is ecommerce, make sure your cost of living is low.
See below the actions to take for creating a business that caters to the baby boomers.
Actions
- Examine each of the areas and determine what type of products or services could be provided to a group.
- Determine what skills you have that can provide that product or service.
- Figure which group is your best target market and what you can provide.
- Go for it.