- The Washington Times - Thursday, December 29, 2005

Fourth of five parts

Joining the auto and garden shows scheduled for next spring in New York will be the Baby Boomers Show.

Organizers say it will be the first trade show designed specifically for consumers born from 1946 to 1964.

“It’s a big part of the population,” Neil Doherty, president of the trade show’s production company, says about the generation of Americans that spends nearly $2 trillion a year.

When the last baby boomer turns 65 in 2029, the generation will control more than 40 percent of the nation’s disposable income, according to the insurance industry’s MetLife Mature Market Institute.

“Basically, if you want to grow your business in the next 20 years, you better be targeting baby boomers,” says Matt Thornhill, president of the Boomer Project, a Richmond marketing research firm aimed at boomers.

Exhibitors at the show in Manhattan scheduled for April 28 to 30 will include financial-planning and investment organizations, real estate agencies, retailers, recreation companies and employers.

The exhibitors plan to market to the same generation that created the demand for Barbie dolls, rock ‘n’ roll and sport utility vehicles.

Now, as the first baby boomers turn 60 years old next month, the generation is creating a demand for financial-planning services, condominiums and vacation packages companies.

In this series, The Washington Times examines how the aging of America’s largest generation will rock the social-service and health care systems created by their parents’ and grandparents’ generations and how the boomers are living out their own vision of getting older.

Marketers say companies that have not figured out a way to appeal to aging baby boomers better hurry.

Beginning Jan. 1, another boomer will turn 60 years old every 7.5 seconds.

Big spenders

More than half of the boomers are at least 50.

Traditionally, marketers lose interest in consumers after they turn 50 as their spending habits became more conservative, along with their lifestyles.

However, with 78.2 million baby boomers in America’s wealthiest generation, they cannot be ignored.

The population of boomers is about 30 percent bigger than the generation of 20- to 40-year-olds who follow them.

“They’re going to continue to consume at record rates,” Mr. Thornhill says. “Already, they are the highest-spending demographic there is.”

Baby boomer spending habits showed up in this year’s Christmas shopping season, where the 40- to 59-year-olds typically say they learned through experience not to spend beyond their budgets.

“You become a little more sensible, a little more careful,” says Violetta DuBose, a 55-year-old program review specialist for the D.C. government.

This year, she gave gift cards to her nieces and nephews as Christmas presents. She also is balancing her budget to include payments on a second home she bought last year in Florida.

“That cuts out a lot of extravagance that I used to be able to throw away,” Miss DuBose says. “It’s time to think about saving.”

Market target

Companies are redesigning their products and services to accommodate the boomers.

Among Americans 50 to 64 years old, 58 percent use the Internet, according to a Pew Research Center study last year.

As a result, Internet designers are telling their computer specialists to use sharply contrasting colors to distinguish different parts of Web sites for visitors whose eyes are starting to fade.

Designers also are supposed to make layouts and navigation tools simple to use.

In another example, ski resort operators are smoothing down their slopes for the slowing reflexes, ebbing leg strength and joints that get sore more easily as the boomers age.

The percentage of skiers who are 45 or older has risen from 21 percent in the 1997-98 season to 31 percent last season, according to a National Ski Areas Association survey.

The prescription sunglasses industry is benefiting from the aging of baby boomers as presbyopia, a normal age-related blurring of vision for objects close to the face, becomes a common syndrome.

An estimated 90 million people in the United States have presbyopia or will develop it by 2014, according to the eyewear industry. Many are ordering prescription sunglasses.

“Clearly, we’ve seen a huge market fallout based almost solely on a demographic shift as the baby boom generation moves into their 50s and 60s,” says Don Montuori, publisher of Packaged Facts, a market research publishing firm.

Same difference

But one characteristic that distinguishes baby boomers from previous generations is a great diversity resulting from their large numbers and wide range of education levels, according to marketers.

“Almost any generalization you make about them can be shown to be wrong,” says Peter Francese, demographic trends analyst for Ogilvy & Mather, a New York advertising agency.

Boomers tend to have more flexible spending habits than their parents, reflecting the diversity of their backgrounds, he says.

Companies are offering a variety of products and advertising pitches for such a big market in which the only common trait is age.

• Clothing company the Gap started selling a line of casual wear and career clothing called Forth & Towne this year intended primarily for women older than 35. Other retailers, such as Chico’s FAS and Coldwater Creek, also offer clothes primarily for middle-age customers.

• Revlon has dumped the twenty-something women with flawless skin in its ads for older actresses such as 59-year-old Susan Sarandon and 51-year-old Christie Brinkley. They are used as role models for “age-defying” makeup.

• Dove soap has eliminated the teenage models in its ads, switching to “real women,” including baby boomers.

• Minute Maid is joining other food companies in selling “heart healthy” foods. Minute Maid sells Heart Wise, an orange juice fortified with plant sterols the company says can lower cholesterol.

• Visa USA has marketed its Visa Signature credit card since 1998 to households earning at least $125,000 a year. About $110 billion a year in purchases are made with the card, which includes robust amenities, such as 24-hour concierge service and merchant perks. Although anyone can qualify for the card, most of the users are 35 to 54 years old.

Advertisers are increasingly using “security blanket marketing,” in which they evoke an image or music to remind a target audience about the good times of their youth.

“It’s basically engaging in a bit of nostalgia,” says University of Maryland business professor Hank Boyd, a 41-year-old baby boomer.

Ameriprise Financial uses ads for its financial-planning services in which young people driving a minibus in the 1960s flash forward to middle age while driving the same minibus. The ad implies Ameriprise Financial can help baby boomers plan for retirement.

“It reminds you of the time you were protected, you were safe at home,” Mr. Boyd says. “That kind of imagery plays very well with these people as adults.”

Investment companies are one of the main services gaining prominence in ads to baby boomers as they focus more intently on retirement.

“We’re targeting the baby boomers as our core market,” says Paul Johnson, spokesman for Ameriprise Financial.

Within a few years, marketers predict that advertisements for retirement communities, travel services and health care will become more prevalent.

Close to home

For baby boomers who choose to live independently, real estate is likely to be their biggest investment in retirement, according to marketers.

Other major focuses are health, learning experiences and grandchildren.

“I’d say a driving characteristic of boomers is that they are going to do anything and everything they can to maintain their health and vitality,” says Mr. Thornhill, the Boomer Project president. “They’re going to put off getting old as long as they can.”

The vitality that they seek also means they would pass up relaxation for learning experiences, he says.

“By the time they reach 60, they are less interested in material goods and more interested in experiences,” such as cooking classes or African safaris, Mr. Thornhill says.

They also are more generous than their parents, meaning more contributions to their grandchildren or charity, he says.

Baby boomers who are grandparents spend an average of $100 more on their grandchildren a year than their parents’ World War II generation, according to research from the Boomer Project.

They also want housing that matches active lifestyles.

“The big difference between baby boomers and other generations is that they will live in multiple places,” says Mr. Francese, the Ogilvy & Mather demographer. “The previous generation moved to one location, like Florida, and stayed there.”

Baby boomers are more likely to maintain second homes if they can afford them, he says.

One house might be near their children or their employer, he says. The other is likely to be in a traditional senior vacation spot, such as Florida or Arizona.

A 1999 survey of baby boomer preferences by retirement community developer Del Webb found that boomers prefer not to move too far when they retire.

Only 30 percent say they would move a long distance to places such as Las Vegas; Phoenix; Orlando, Fla.; or Raleigh, N.C., which are among the top 10 favorite places for retirees older than 65 to live.

Another 30 percent plan to move less than three hours away from the homes where they made their careers and raised their children. Forty percent do not plan to move.

If they choose a new home, “their preferred type of housing is a condominium because they don’t want to be bothered with mowing the lawn, clipping the shrubs and painting the house,” Mr. Francese says. “You can already see that among older baby boomers. They want to travel, they want to do other things.”

Many are selling the homes where they raised their children to downsize to smaller homes. They use the surplus money for travel and entertainment.

The baby boom generation is making 55-and-older developments one of the fastest-growing segments of the real estate industry.

Baby boomers older than 50 are buying more than 25 percent of the 1.2 million homes being built this year, according to the National Association of Home Builders.

One of them is Martin Siegel, a Tysons Corner dentist, who is selling his 10,000-square-foot home after his two sons graduated from college and his wife died last year.

“Myself, I’m kind of looking for a condo down in Florida in the next couple of years,” says Dr. Siegel, 59. “The ideal situation for me would be spending winters in Florida and then coming back to Washington.”

He is buying a 1,500-square-foot condominium in Reston Town Center for $700,000.

Although it is much smaller than his house, he prefers the convenience of no upkeep and being able to walk to restaurants, theaters and other activities

“It’s a turnkey operation,” he says. “There’s really not much you need to do. That’s what people want nowadays.”

Nearly all his neighbors are baby boomers, he says.

Distant shores

The number of Americans retiring abroad has soared in recent years, says Roger Gallo of EscapeArtist.com.

“On $50,000 a year, you could live like a king,” says Mr. Gallo by telephone from his 135-acre vineyard in Argentina.

He says picking where to retire is like picking a lover.

“It all depends on what you like,” he says.

The biggest “problem” expatriate retirees face is “relatives and grandchildren.” For those who need to fly back and forth two or three times a year, he recommends Central America, specifically Panama.

“You can live there for 50 percent of what it costs to live in the United States, and it’s safe,” he says.

In addition, restaurants and pharmacies have retiree discounts and incentives.

For those who don’t mind being farther away, “You can’t go wrong with Chile, Argentina, Brazil and Uruguay,” he says.

He says Eastern Europe is still a bargain, but won’t be for long.

• Tom Carter contributed to this report.

Part I

America’s starting to look a lot older

Part II

Boomers slow down, but won’t quit

Part III

Boomers will not retire from life

Part IV

Boomers to overload health system



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