What is the one word you’ve probably heard and read more than any other during the last 18 months?
It’s contained in every third headline for articles on LinkedIn or in top publications like Fast Company and Fortune. It’s a word that represents a group that marketers have been dissecting and hypothesizing about ad nauseum.
If you guessed “Millennials,” you win!
For the past few years, marketers have been obsessed with this enigmatic generation. This group of young people has confounded brands because they are so different from every other generation that has come before them. Although, are they all that different?
Regardless, marketers have been tripping over themselves trying to figure out how to curry favor with consumers between the ages of 20-35.
But not that long ago, albeit without all the social media hype and constant hand-wringing in the business and cultural media, marketers were doing the same thing with Baby Boomers. This was the consumer set everyone wanted.
Parenthetically, those in my agency who consider themselves Generation X are a tad bitter over no one ever losing their minds about them. But they’re used to it.
Today, however, it’s all about Millennials. But should it be? Are marketers missing opportunities by focusing too much attention on Millennials and not on Baby Boomers? Or are these younger consumers truly as important as is (constantly) being reported?
The answers to those three questions are, it depends, yes, and yes.
The Case for Millennials
When it comes to home ownership, Millennials have traditionally been thought of as the “Renter Nation.” Because of crushing student debt, modest job growth, and cultural influence, young people have eschewed buying homes.
Or have they?
As it turns out the American Dream wasn’t forgotten, just delayed. According to a survey by Zillow, the home market is increasingly being driven by Millennials.
The survey found that half of all home buyers in the U.S. are under the age of 36, and just under half are buying their first home.
Zillow attributes this to the maturation of the Millennial generation, something which is just starting to occur. Millennials, according to their press release, are seeing homes as a good investment and are embracing the same romantic notions of home ownership as their grandparents.
How they’re going about entering the market, with their trademark internet savviness, shouldn’t surprise anyone. They are using all of the digital resources they have at their disposal — brand web sites, media websites, social media — to inform themselves and make better decisions.
Interestingly, they are also relying on more traditional, offline sources, but demanding more from them. Zillow reported that many Millennials are looking to real estate agents for advice on strategy and remodeling ideas, in addition to the business of buying a home.
Of course, Millennials are not willing to settle for cookie-cutter solutions. Their criteria for the ideal home reflects their individuality, their desire for smarter homes, and their concern for sustainability and energy efficiency.
Millennials are embracing the American Dream of owning a home, a trend that will only continue as the bulk of the generation matures. They are clearly the future of the home products market, as evidenced by builders like Toll Brothers adjusting their offering to accommodate younger buyers.
The National Association of Realtors claims that 35% of all home purchases are currently by first-time buyers… up from 32% last year, increasing their growth trajectory towards the historical target of 40%. But the future isn’t here just yet. Baby Boomers are the present, and there is one thing they have more of than Millennials. By a huge margin.
The Case for Baby Boomers
Some might think of Baby Boomers as a generation of the past. But here’s the thing: there are a lot of them, and they don’t intend to go away soon, or quietly.
During a presentation at the Chief Housewares Executive Supersession in October, author Peter Hubbell made the case that marketers ignore Baby Boomers at their own peril.
The main reason is that Baby Boomers have money. Lots of it.
First of all, they are not retiring at 65 like their parents did, so they’re not done with their earning years. Many are still working, at least part-time, well into their 70s. Also, they stand to inherit an astonishing $15 trillion over the next 15 years.
That all adds up to huge purchasing power, dwarfing that of Millennials, or any other generation, for that matter. In fact, Baby Boomers currently control about 70 percent of the nation’s disposable income.
What are they doing with that wealth? Well, whatever they want! They are approaching the idea of aging on their own terms. They are staying in their homes as they age, with 78 percent saying they’ll have to be dragged by the ankles to get them into a nursing home (we’re paraphrasing).
And in their homes, they don’t want compromises. They may be simplifying a bit to permit them to do more travel, but they don’t want to sacrifice quality or even luxury.
Accessibility is an important aspect to what they want, too. Sooner or later, their bodies will start to fail them. To allow for their age-in-place intentions, Baby Boomers are demanding homes and products that will accommodate them for as long as humanly possible.
Like all Americans, Baby Boomers want what they want when they want it, and lots of it. The difference is they have the cash to buy it.
An interesting wrinkle in the Millennial-Baby Boomer debate is the rise of multi-generational homes. According to the U.S. Census Bureau, the number of Americans living in multi-generational households has doubled since 1980.
At least two dynamics can explain this: more young people moving back home after college, as they struggle to pay off student loan debt, and more aging parents moving in with their kids to avoid the “old folks homes.”
Either way, this presents an opportunity for builders and product marketers to accommodate both generations. And if they want to throw something in for the Gen Xers, we’re sure they’d appreciate it.
That opportunity also embodies what we believe to be the best strategy for brands. Millennials are the future, without question. Any forward-thinking company knows that focusing on the future is a good idea.
But Baby Boomers are the present and their immediate future. The immense buying power will still be here 10 years from now, and ignoring it would be foolish.
So, focus on the now, but don’t lose sight of the future.