Updated: Mar 16, 2020
By virtue of their size, growth, and high disposable income, Baby Boomers have become one of the most powerful forces in the American economy. Instigated by GI’s returning from World War II, Baby Boomers have come to represent the nation’s largest living adult generation and the wealthiest generation in U.S. history. However, now this generation is reaching retirement age and the pace shows no signs of slowing.
According to Pew Research Center, every day for the next 19 years, 10,000 Baby Boomers will reach retirement age. This represents a change of colossal proportions. It is “all hands on deck” for companies vying for a piece of the action. Fueling this frenzy are a boom of products aimed at alleviating the needs of this key demographic.
For Procter and Gamble, one of the biggest players in consumer goods, figuring out how to cater to the Baby Boomer demographic is a multi-billion-dollar opportunity. Under the new leadership of Chief Executive Officer David Taylor, the company is poised to launch a new line of products designed to cater to the boomer set.
In 2014, the company announced that it would be entering the adult diaper market to turn around slumping sales and poor performance on the S&P. This signaled a return to the company’s roots in the 1990’s when it owned Attends, one of the national leaders in the adult incontinence market, worth a staggering $7 billion.
Recently, the company has diversified its consumer goods portfolio to include custom razors, high-tech devices and a number of goods targeting seniors. With this decision, the consumer goods giant is sending a message to stockholders over the importance of Boomer’s to America’s economy.
The company stock's steady downtrend has resulted in a loss of more than 15% Through the first six months of 2018 even as the S&P 500 gained 2%, according to data provided by S&P Global Market Intelligence. To offset this slowdown in sales, P&G has bet big on the economic potential of boomers to reinject growth into the company. Gillette, one of the companies owned by P&G, announced earlier this month that they were preparing to roll out the world’s first razor built for caregivers to shave others.
This marks a distinctive shift in the company’s marketing strategy. For years, the Gillette brand has invested heavily in attracting men between the ages of 18 and 23. Every year the company gives out over two million razors to young men on their 18th birthdays. This is part of a broader strategy to expand its brand and label itself as the official “male grooming partner.”
However, Gillette executives have since recognized that there is a real opportunity for some visionary directions for the company in the coming decades. One of these possibilities is the production of razors that ameliorate the challenges involved with shaving those who are bedridden. Unlike a traditional razor, The Gillette Treo, as it is called, eliminates the need for running water or shaving cream by incorporating an innovative gel and an extra-wide handle for ease of use.
With the number of U.S. elderly people expected to double by 2050, it can be agreed that senior products hold an important value in our society, and that value can translate into big dollars for companies that position their products accordingly.
While the bulk of research remains focused on the negative consequences of America’s aging population, little is published on the financial opportunity that this generational shift represents.
The recent decisions of behemoth Procter & Gamble are seen as a prelude to companies investing more heavily in the 65-plus population, which is now the country’s fastest growing demographic. As more Americans enter retirement, millions of Baby Boomers will need products and services designed to meet their changing needs.
He who understands the boomer is poised to reap a bonanza in the coming years. The better companies get at anticipating and successfully meeting the demands of this critical demographic group, the more profitable they will become and the greater their net positive impact on society. Now is the time to invest big in the senior market, but don’t take my word for it — just ask Procter & Gamble.
Tony Ferrari, Dartmouth Business Review.