Growing Old and Loving It

Pier 1 knows they’re lurking out there. Scudder Kemper is well aware of them, too, as are Harley-Davidson, Del Webb, and Evanston Northwestern Healthcare. Everyone knew this day was approaching, and many have been preparing for the inevitable. Aging Baby Boomers are turning into “Zoomers,” yet another Boomer force to be reckoned with.

The robust generation of post-World War II, 76 million Americans born between 1946 and 1964, Boomers have left their mark on each of the six decades they’ve lived through by navigating the child, teen, and adult stages of their lives differently from previous generations. They’ve altered music, politics, the workplace, the family, and other facets of everyday life.

Now they’re about to put their unique stamp on the tradition of retirement, and that has plenty of marketers licking their chops. It’s hardly been a secret – their numbers and arrival have been plotted for years – so now it’s time for planning and implementation.

“We’ve been talking about this a lot lately,” says Jim Thompson, director of shareholder information for Scudder Kemper Investments, New York City. “The concept of retirement is eroding because of Boomers. They view retirement as the day when they don’t have to work anymore, as opposed to the [predetermined] date when they take their stock options and their gold watch and ride off to the golf course.”

WHO YOU CALLING OLD?

While the customary age for hanging it up has been between 62 and 65, “now that day could come at ages 40 to 75, depending on your financial status and background,” Thompson says. (He goes on to note that it was Otto von Bismarck, Germany’s chancellor from 1871-90, who first declared that 65 should be the official retirement age; the guideline was embraced by the U.S. Social Security Administration when it was born in 1935.)

Scudder is the exclusive provider of mutual funds programs for AARP, the Washington, DC-based association that currently numbers 34 million members, of which 30 percent are 50 to 59 years old. “A lot of boomers tend to reject the notion of getting old – certainly more than previous generations,” says AARP spokesperson Tom Otwell.

That denial is partly why the organization, founded in 1958 as the American Association of Retired Persons, has officially dropped the dreaded “R” word in favor of the acronym. “It more accurately reflects our membership, 40 percent of which is still employed,” he says.

Notions and names aside, there are undeniable chronological points at which Boomers are going to want or need certain products and services, including financial help, healthcare, housing, and travel assistance. In shopping for those needs, they’re going to expect high standards of quality, convenience, and value – and a low emphasis on age appropriateness. So marketers are compelled to not promote their offerings in the age-old ways.

Scudder, which began its alliance with AARP in 1984, has adjusted its approach to selling funds to that constituency. “The AARP Web site is our platform for reaching Boomers,” says Thompson. “The Internet is ideally suited for the temperament of that generation,” in terms of instant access to loads of information. With that in mind, added to Scudder’s link on the AARP site is a financial library stocked with guides to nearly 90 different topics of interest, from investing to caring for aging parents.

“Boomers like to get information in USA Today-style,” says Thompson, so the guides are brief three-to-five page bites. Offline, Scudder holds Zoomer seminars that it promotes on the site, through direct mail, newspaper ads, and at AARP events.

Augmenting U.S. Census data and other demographic research, Scudder and other marketers gained fresh insight into the Baby Boom Generation through an extensive attitudinal and behavioral study conducted by AARP and Roper Starch Worldwide and published last year. Among the key findings in Baby Boomers Envision Their Retirement that set this generation apart from their parents are the 80 percent of respondents who say they plan to work at least part time after retirement, and the one-third that say they’ll work mainly for the sake of interest and enjoyment instead of needed income.

In other findings, only 21 percent think they’ll move to a new geographic area when they retire, a quarter are eyeing an inheritance that will affect their retirement planning, 35 percent expect to scale back their lifestyle in their golden years, and just 16 percent believe they’ll have serious health problems. They also look forward to volunteering in their communities, taking up hobbies, traveling, and becoming grandparents. A self-reliant bunch, 70 percent don’t want to depend on their children later in life, with 68 percent counting on IRAs and 401(k) investments.

“Their life expectancy is higher, so health is a really big concern,” adds Kathy Curry, director of client services for the Sandcastle Group, a marketing agency in Minneapolis that focuses on Boomers. “They have less tendency to take it for granted.”

YOUNG AT HEART

In talking to companies such as Johnson & Johnson about its Mylanta antacid brand, “we’re looking for ways to go after this group with promotions, free trials, and other offers,” says Curry. “The challenge is not looking like a product for old people. The minute a product or service starts making them feel that [way], it can be in trouble.”

Looking beyond everyday, over-the-counter products, hospitals and other healthcare facilities are exploring ways to promote themselves. “Almost everything we’re doing is being designed to facilitate access and convenience for the Baby Boom Generation, which is not only going to get older and demand more service, but is much more demanding on the topics of healthcare,” says David Loveland, senior vp-corporate relations for Evanston (IL) Northwestern Healthcare, a hospital affiliated with Northwestern University’s medical school. “With Baby Boomers looking to have it all, right now when they need it, we are adapting our system to more outpatient, high-technology services,” including such speedy procedures as endoscopic knee surgery and laser vision correction.

Although the leading edge of Boomers is a relatively young 54 this year, like it or not, they are facing the prospect of contracting illnesses down the road. But Zoomers have a heightened awareness of the benefits of early detection, which has led Evanston Northwestern to set up off-site screening centers equipped to quickly perform procedures like heart CT scans and mammograms. The hospital runs a mobile mammography unit at a Nordstrom department store in a nearby suburb that performs about 6,000 tests for breast cancer each year. The hospital also promotes itself with seminars and by participating in events sponsored by groups such as the American Heart Association.

Sandra Gadat, president of Customer Communications Group, Lakewood, CO, works with retailers to attract the portion of Boomers reaching empty-nest status. About 30 percent of the generation will find themselves kid-less this year, the remainder in the next decade or so. “They’ll have more disposable income for things like buying motorcycles and home improvement. It’s a wonderful opportunity for retailers,” observes Gadat, whose agency’s clients have included Macy’s, Nordstrom, Kohl’s, and Pier 1 Imports.

Fort Worth, TX-based Pier 1 targets Zoomers in an ongoing direct-mail program soliciting “Best Customer” credit cards, which offer rewards such as pre-sale notices, special shopping hours, newsletters, and handwritten thank-you notes. While Pier 1 does not run in-store promotions specifically geared to Boomers, “we know we appeal to those age groups” with things like lightweight, easy-to-move wicker furniture, says vp-marketing Leslie Eades. “We’re not focusing so much on demographics as on psychographic and societal identifications.”

RIDING INTO THE SUNSET

When Milwaukee-based Harley-Davidson looks at its demographics over the past 13 years, the motorcycle maker can easily see that Boomers have become a key segment. In 1987, the median age of a Harley rider was 34.7, and the 98-percent male market had a median income of $38,400. By 1995, those figures had risen to 42.5 years and $66,400. In ’99, they were at 44.6 years and $73,800, and nine percent of owners were female. “We don’t do a lot of target marketing,” says Paul James, Harley’s director of communications. “But clearly, Boomers are driving the popularity of Harley-Davidson.”

Phoenix-based home builder Del Webb Corp. hopes those easy-life riders will someday park their hogs inside one of its 17 Sun City or otherwise-named communities in seven states, which cater to people 55 and older. In January, Webb launched a multi-million dollar marketing and advertising campaign aimed at attracting Boomers, “who are zooming into retirement with goals, agendas, financial prosperity, and a desire to continue to change the American landscape,” says ceo LeRoy Hanneman.

Reacting to proprietary surveys about Boomer housing wants and needs, Del Webb is adding exercise and computer rooms to communities and building new houses with home offices or detached cottages for the in-laws.

“We also recognize that not everyone wants to live in a community that is age-qualified,” explains Paul Bessler, director of market research, referring to Sun City’s policy that residents be at least 55. So the company has developed Anthem communities in Phoenix and Las Vegas that are similarly lifestyle-oriented but not age-qualified. “This will give us an opportunity to see how big this group [of Boomers] is going to be,” says Bessler. “Not everybody is right for Sun City.”

Besides advertising in targeted magazines such as Bon Appetit and Southern Living, Webb is promoting itself to Boomers on the Internet and by sponsoring local sporting events.

THE BEST REVENGE

Boomers are credited with fostering the drive toward healthier foods and eating habits, which led Kraft Foods, Glenview, IL, to form a task force within its 50-plus member marketing group to look specifically at women about to turn 50.

Working with such brands as Philadelphia Cream Cheese, Shredded Wheat, and Maxwell House, “we decided to do a direct-mail program called Time of Our Lives,” says Diana Aixala, Kraft’s director of marketing to women. The program’s package included editorial content featuring stories about travel, grandparenting, health and fitness, and other relevant topics, plus recipe ideas and coupons.

The test ended in July, and while Kraft analyzes the ancillary research around it, “we’re putting plans together for another program for next year,” says Aixala, indicating that it may become an Internet-based direct-response program. “We hope to work with similar brands, and perhaps with a strategic partner such as a travel company.”

This much is for sure: Baby Boomers represent the largest single sustained growth of the U.S. population in history. And with 18 years separating its high and low ends, it’s hardly homogeneous. Marketing to this disparate, though immense and attractive, group “will demand a completely new type of thinking,” says Duff Reiter, vp of Age Wave Impact, an Emeryville, CA, marketing services agency. “Thirty years ago, 50 was on the down side as far as marketing was concerned. Now there’s this huge bulge of Boomers coming in, and they are far and away the most powerful group from a marketer’s standpoint.”

Blink and they’ll zoom right past you.