By: Joe bates • email: firstname.lastname@example.org
If you have attended any Travel Retail conference or paid any attention to the duty free trade press in recent years, you will have surely heard all the in-depth discussions about Millennials. Such close attention to this key customer group is perfectly understandable – after all, the generation aged from around 19 to 35 is one of the largest in human history, accounting for some 27% of the global population.
Yet I’d argue there is another important customer group which is served very poorly by travel retailers and largely ignored by brand marketers – the Baby Boomers, a generation popularly defined as those aged between 53 to 71. With older consumers living and working longer, this silver-haired demographic has the money to spend and a love of travel. Seniors over 50 account for half of all spending in the US, control over 70% of the country’s disposable income and have an annual travel spending power of US$ 120 billion.
The ageing of the the international traveller mix is not a Western phenomenon either. In Japan over a quarter of the population is aged over 65 and this is set to rise to 40% by 2055. And let’s not forget China, either, where there are more than 220 million people aged 60 and over. That’s more than the populations of France, the UK and Germany combined By 2050 that number is set to rise to 480 million – around 25% of the world’s elderly!
Make no mistake, Baby Boomers are too big and affluent a market to ignore. But that is exactly what we’ve been doing. In the US, just 10% of marketing dollars are targeted towards the over 50’s. It’s true that some western beauty and fashion houses have belatedly woken up to the potential of the silver dollar, using older actresses such as Catherine Deneuve and Jessica Lange to front ad campaigns. But in Asia, beauty marketing campaigns rarely feature models aged over 40.
The Travel Retail business has nothing to boast about either. A recent survey into non shoppers conducted by Counter Intelligence Retail, revealed that Baby Boomers were the age group most likely not to visit the Duty Free store (61%). How that dismal store penetration rate can be improved will be a topic trunblocked.com will return to in future posts.
But for now I’ll leave you with a final thought. Travel Retail can’t ignore Millennials, for sure, but the plain fact is that older generations simply aren’t getting the attention they deserve from every stakeholder in the business – and all the data suggests the industry is missing out on a lot of revenue because of it.