Boom: The Key Demographic

It starts happening early next year and once again the demographic profile of the United States will change like never before.

The event is the first of the Baby Boom generation turning 60, marking yet another landmark in aging of the generation that has left an indelible mark and level of change on every part of American life since the end of WWII.

Boomers have been a never ending source of change from the days they first swelled the population to the days of protest and "do your own thing," which probably was the first sign of the world of niche marketing to come. Given the diversity of needs and tastes of Boomers, it's hard to draw a single picture of this generation of 76 million adults. The size and spending power of the Boom generation make them a priority for any marketer.

At 28 percent of the population, Boomers make up the largest population of working adults in the nation and have the highest incomes, which means their overall spending power is unmatched. According to FMI's U.S. Grocery Shopper Trends 2005, Boomers are easily the biggest spenders on food per household, even though Generation X households are more likely to be larger in size due to a greater presence of children.

Currently, 26 percent of Boomers have children in their household (compared to 50 percent of Gen X), yet Boomers spend $98.40 on average in supermarkets each week - Gen X households spend $1 less. Similarly, Boomers spend more ($75.10) in their primary store than any other shopper group. Boomers are loyal to supermarkets overall and are less likely than other shoppers to regularly frequent a supercenter.

Of course, not all Boomers share any single lifestyle. There are Boomers who are empty nesters and grandparents, while others (sometimes of the same age) are new or current parents, so targeted marketing is essential.

When it comes to selecting a supermarket, Boomers look for high quality perishables, a clean store and accurate shelf tags. Boomers are more likely than most to stock up on bargains and deviate from their shopping list. They solve their own problems, seeking information and educational resources when trying to attack problems like improving their nutritional habits.

Some 75% believe their diets could be healthier, a much more critical assessment than nearly all other shopper groups. Despite this, a smaller percentage of Boomers are on diets to lose weight than are the younger shoppers from Generations X or Y. (Aging does have its price however. Far more Boomers are on diets for medical reasons than the younger groups.)

Trends offers a wealth of statistics on Boomers and other demographic groups that in today's diverse and competitive marketplace are nothing short of essential.

Click here for more information on Trends.

Putting the Consumer Into Category Management

Category management is a time-tested driver of sales and profits. But now's the time to implement a more consumer-centric approach that identifies and targets underserved consumer groups and drives incremental profits for retailers and their CPG partners.

Recent research by ACNielsen indicates that traditional category management tools, though still important, are being used less often. One reason may be the limitations of the "classic" eight-step product-centric process, which enables retailers to better manage sales, but falls short in its ability to target and track the actions of specific consumer segments. The result is that we still don't understand why some categories and some stores consistently under perform.

This knowledge gap is ending. A plethora of new data has unveiled the diversity of consumer preferences. And a new consumer-centric category management process developed by Spectra Marketing, a sister company of ACNielsen, is dramatically enhancing the return on investment for new category strategies.

The new process is far more efficient than the original category management process because it's designed to eliminate rework. Users also have the ability to truly tailor marketing and merchandising to individual consumer segments and replace the traditional "one-size-fits-all" approach.

What sets the Spectra approach apart is Consumer Demand-Based Clustering. Utilizing Spectra's proprietary consumer segmentation approach, Demand Clustering identifies and locates unique consumer segments and then groups stores based on a category's or brand's future sales potential among those consumer segments. It then identifies and weights the demographic attributes - income, education and lifestyles - that most drive purchasing behavior for each.

Simply put, rather than just finding out how well a product or brand is performing, this process reveals how well they should perform in particular stores. Then, retailers and manufacturers can develop a marketing plan for a cluster of stores with similar consumer demand landscapes rather than an ineffective chain-wide plan or cost-prohibitive individual plans for individual stores.

Whether this strategy results in a reallocation of space in different categories or revamping media strategies to reach specific consumer groups, it is clear that a consumer-centric approach delivers a better value proposition to consumers and a stronger bottom line for retailers and manufacturers. It is a process that leads to a new familiarity with local consumers, and the discovery of the overlooked and underserved who would very much like to buy more!

For more information about Spectra's Consumer-Centric Category Management process, contact steve_kent@spectramarketing.com.