©2004 Nova Marketing, Inc.

Are retailers ignoring thebiggest spenders of all?

The Multi-Generational Shopper

Welcome to a unique time in the history of retail. A time when onesingle customer segment enjoys unprecedented purchasing power – not only for itself, but for three other distinct segments.

A unique and historic dynamic has emerged that enables retailers toactually reach four different customer segments all through onepowerful new consumer: the new "Multi-Generational Shopper."

The Multi-Generational Shopper has substantial disposable income,buys for themselves along with three other segments and, for the timebeing, is underserved and undermarketed to by retailers.

In short, retailers are ignoring the biggest spenders of them all.

Retailers are doing very little to take advantage of this uniqueopportunity. But this could be great news for you – and a chance to getin early on perhaps the largest sales opportunity ever. The implicationsfor retailers who can successfully leverage this dynamic are huge interms of increased near-term sales and longer-term market sharedominance.

The Multi-Generational Shopper overlaps with the Baby Boomersegment. Whereas Boomers are recognized as 38–56-year-olds, the Multi-Generational Shopper typically falls in the 45–64-year-oldcategory.

The Multi-Generational Shopper typically is distinguished by thefollowing characteristics:

• They have one or more elderly parents• They have children in their 30’s• They have an average of five grandchildren

And they spend money on goods and services for each one of thesesegments.

That’s four generations, including themselves, all needing to be fed,housed, clothed, medicated, entertained and provided for. Today, theMulti-Generational Shopper is footing a larger piece of the bill foreveryone.

Introduction

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Meet the New Multi-Generational Shopper

This is a powerful population marketers must address. Yet historically,marketers haven’t done a particularly effective job reaching thissegment. Very few marketers seem to have the Multi-GenerationalShopper on their strategic radar – unaware of the enormous influencethey have over the entire family’s buying behaviors.

This opportunity is largely untapped. Retailers simply don’t target thesepeople – unless the retailer is selling denture crème or some otherproduct designed specifically for the mature market. Retailers and theiragencies continue to adhere to the idea that all signs of economic lifeend at about age 50. That’s how they tailor their marketing messages.That’s how they buy media.

It’s true that the healthcare companies do a good job targeting those50-60 years old, but only as buyers making decisions for themselves.Retailers, particularly today’s drug stores and department stores withmulti-generational merchandise, are missing a huge sales opportunityby failing to acknowledge the multi-generational shopper in promotionsand marketing.

As a forward-thinking retailer, you need to act now, before yourcompetition, so you can take advantage of this emerging and hugesales opportunity today, and own substantial market share for years tocome.

Have you ever thought about how much buying influence and powerthis 50-something-year old shopper has over other consumersegments? On any given day, they might buy baby furniture for agrandchild, a digital camera for an adult child, a first computer for theirelderly parents, and pick out a new car for themselves.

Multi-Generational Shoppers just might be the biggest spenders of all,yet most retailers haven’t been paying attention. They have the moneyto buy what’s being sold today, and they’re spending it on allgenerations within their family. Yet, retailers continue to target thecoveted 18-to-34-year-old and 25-to-49-year-old age groups. If that’syou…you’re missing out.

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Enormous Buying Power

Consider the following statistics:

• The total buying power within the mature market will increase from about $1.6 trillion in 2002 to 2.1 trillion in 2007.(Packaged Facts)

• The buying power of those aged 55-to-64 will grow faster thanany other age group, and will reach $1.3 trillion by 2007.(Packaged Facts)

• In 2002, those aged 55-to-64 were responsible for 55.1% of all buying within the mature market. The buying power of thissegment will grow faster than any other age group and willreach $1.3 trillion by 2007. (Packaged Facts)

• There are 45.6 million grandparents aged 55+, who spent a total of $22.8 billion on their grandchildren in 2002. This is predicted to climb 30.9% to $29.8 billion in 2007. (Packaged Facts: 2003)

• 37% of Baby Boomers in the near future will be responsiblefinancially for parents or children during retirement. (Allstate Financial)

This one shopper can generate four separate revenue streams for your business. For every one Multi-Generational Shopper to which you market, you’re actually promoting your products to four differentsegments.

Yet, their formidable spending power, this segment remains largelyunderserved. And, this new generation of Multi-Generational Shoppersis not only among the wealthiest segment of society, but they also tendto be proud of their generosity.

Take a look at the credit card statement of today’s typical 50+ year-oldshopper and you’ll be stunned by the variety of purchases. A crib; anew pitching wedge; an orthopedic chair; a DVD player. One personbought all these different things? Went to all these different stores?

Says Alice, a 60-year-old grandmother, "My mother is in a nursinghome. I control all her finances – do all her shopping. I buy herclothing, medicine, candy – everything, you name it. And with threegrown kids, I can’t even begin to tell you how much I spend on myeight grandchildren."

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Items Purchased For Grandchildren During The Past 12 Months

1999 2002Clothing 74% 87%Books 60% 80%Fun food/snack food/fast food N/A 78%Educational toys (not for computer) 29% N/AAny other toys 38% 76%Magazines 23% 32%Music, CDs, tapes N/A 48%Videos, DVDs N/A 45%Jewelry N/A 37%Video games N/A 31%Computer software 18% 28%Other electronic devices (radios, CD players) N/A 28%

Source: AARP

The fact that the 45–to 64-year-old segment is spending money onthemselves and on others within their extended families is just part ofthe story. Their real value hits home when you look at how thisalready large segment is growing.

• From the years 2000 to 2010, the 50+ population will increaseby 37%. That’s three and a half times the growth rate of thegeneral population. (Selling To Seniors – 3/03)

• Each year, five million Americans turn 50 and another 5 millionturn 55. (Selling To Seniors – 3/03)

According to the AARP, A record number 70 million Americans – aboutone-third of all adults – are grandparents. Overall, grandparents todayare a $35 billion market, and this is only expected to grow as thepopulation ages. Today, the average age of a first-time grandparent is47. And with today’s life expectancy of 76, this generation of eldersmay have as much as 30 years of grandparenting ahead of them. Yetretailers are paying little attention, allocating few marketing dollars tothem.

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A Growing Market

Financially, their children’s educations are paid off. Chances are thehouse is, too and their nest egg is coming along nicely. Many are pre-retirement and still draw a paycheck. In other words, they havemoney to spend.

A growing number of households are also multi-generational.According to the U.S. Census Bureau, as of 2000, there were 3.9million multi-generational households in the US. Some 65% of thosehouseholds consist of grandparents, their child or children, andgrandchildren. And these grandparents are more likely to have parentswho are still alive, so there are four generations with which to contend.

Retailers are at a strategic fork in the road – and most are doing verylittle about it. This is not only the emergence of a new buying segment,but a market with more buying power and more buying influence, thanany in history. Those who have recognized the opportunity presentedby this phenomenon known as the Multi-Generational Shopper aregetting in early on perhaps the largest sales opportunity in years.Retailers who don’t act now will miss out.

Now is the best time to get a large piece of this segment while it’s stillearly. Most likely, your competition is over-marketing to youngerconsumers, even though there are less to go around and they don’treally have the wealth and discretionary income as the olderconsumers. If you are first to target this segment, you are more likelyto get the rewards.

Direct your agencies to target the Multi-Generational Shopper.Consumers in the 45–64-year-old age group have the money to spend,they spend it on four consumer segments, and this category is justgoing to grow larger in the coming years.

Segment or splinter off some of your media buys to media with olderdemographics. For example, if you’re a retailer of kids clothing,consider not only the media that caters to the baby’s parents, but alsomedia that caters to their grandparents. Not only do they help theirchildren pay for their grandchildren’s clothing, they’ll often advise themwhere to buy it. Include all media – radio, television and print.

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Direction To Your Agencies

Expand Your Media

More Households Are Multi-Generational

What To Do About It

Basic Strategies

Acknowledge the multi-generational influence in ads. For example,retailers in the home decor category could show a mother helping heradult daughter select a new kitchen appliance. Show the baby boomeras part of the shopping experience along with other family members.Acknowledge how active these shoppers are in the lives of the othergenerations.

Learn how to develop messages for the Multi-Generational Shopper, orfind an agency that does. These shoppers don’t respond to the samemessages you send to teenagers or young adults.

Simply put – don’t just sell denture crème to grandparents.

The Multi-Generational Shopper exerts great power in the marketplacebecause of their relationships with others combined with their healthywallets. This constitutes a new market for your business to tap, andthis a unique approach you need to look at to expand your market andincrease your sales.

Once retailers accept the Multi-Generational Shopper for the enormous buying influence he or she has, the marketing mix can beginto reflect it. Only then will cash registers begin to ring out with thesound of a single person spending for four generations.

To gain a full appreciation for what fresh and innovative strategicthinking can do for your company, Nova Marketing invites you to visit our Web site: www.novainc.com. Or simply call 617.770.0304 and ask for:

Greg Jones, extension #136 Email: gjones@novainc.com

Larry Green, extension #121Email: lgreen@novainc.com

About Nova MarketingNova Marketing is a retail focused, international marketing andadvertising firm that partners with retail companies to provide a straightforward approach to increase market share, capitalize on customerlife-time-value, and improve overall promotional sales performance.

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Founded in 1992, Nova Marketing is internationally recognized for theiremphasis on creating brand identity, building consumer awareness,increasing promotional effectiveness, gaining market share and boostingR.O.I. Nova Marketing offers expertise in all aspects of retail marketing andadvertising, multi-channel initiatives and store design.

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