Boomers

REI and Jilted Boomers

Recreational Equipment, Inc., or REI, helped me get through graduate school.

Their outdoor camping equipment catalogs ameliorated the stress of examinations by diverting my mind just before falling asleep every night. I drifted into dreamland by fantasizing about wilderness treks made more comfortable by REI's cool high-tech camping toys.

Of course, I also purchased equipment as often as I could afford it and would wait in excited anticipation until an REI box would arrive in my mail from Seattle. My co-op number is 288XXX, which, because numbers are assigned chronologically, means that I joined the cooperative very early in its history. Today, the equipment retailer has well over six million co-op members.

I've been a customer since the early 1970's.

Now when I have out-of-town visitors, I eventually take them to the REI flagship store in downtown Denver. I always leave with a shopping bag in hand. Sometimes I work at the REI Starbuck's between meetings. You would not be exaggerating to describe me as a loyal customer.

About two years ago, I started looking more critically at REI's catalogs - still a form of therapy for this sometimes stressed out marketing executive.

I noticed that the catalogs did not show any models over 40. While the catalogs appear carefully balanced for ethnicity - Caucasian, African American, Latino, and East Asian - not a single model in the last half-dozen catalogs has been middle-aged or older.

I was disturbed that executives working on behalf of my favorite brand would be this unthinking. It must be an oversight! So I dashed off a letter to REI's then-CEO. Here's an excerpt:

Earlier last week, I was in Phoenix to present a workshop to a European team of executives touring the US. The company's goal is to understand better how American companies are successfully marketing to Boomers.

The CEO of this 500-store company, the European equivalent of Lens Crafters, and I talked about REI after dinner last Tuesday. Daniel told me in his expressive French accent, "I love REI." So the next morning, prior to giving my workshop, I presented him with my most recent REI catalog, which I had fortuitously brought with me from Denver to Phoenix.

The point of this letter is to raise a concern. Not one photo in REI's 2004 spring or summer catalogs portrays someone over 50. Every human photo is populated by younger people. Yet, your catalogs have been carefully balanced for ethnicity to present, I am sure, a true reflection of REI's commitment to diversity.

What is important for you and your marketing team to consider is the role of Boomers in the growth of REI during the last three decades. This cohort helped popularize the outdoor sports of greatest relevance to REI today.

Boomers have been buying equipment from your stores and catalogs for decades. I also submit that this generation continues to be a lucrative market for adventure travel and ultralight outdoor equipment sales.

I never received a reply.

To make this story a little more interesting, I was interviewed last December by Business Week Online concerning Boomers. I'm often asked to give my opinions about which advertisers "get it" and which don't. On the "don't get it" side, I mentioned REI's apparent failure not to include photos of Boomers or older adults in its catalogs. As a frequent customer, I have never received any targeted communications addressing my generational cohort -- another missed opportunity.

Fate would have it that I was also simultaneously hosting the Senior Vice President of Marketing for REI at an event in Denver. My comments in Business Week did not go unnoticed. Another executive in charge of public relations sent me an email voicing his concern. He said:

"The part of the article that has my colleagues talking is the implication that REI doesn't understand the importance of the aging population - and I've been encouraged to write a letter to the editor to set the record straight that not only do we recognize the importance of this segment, but that a significant portion of our customer base falls within this category."

My email reply to him pointed out the obvious discontinuity between "a significant portion" of REI's customer base and no visual representation of Boomers (or older) in REI catalogs.

Since then, REI has sent me three more catalogs and, again, the catalogs only depict young adults as models. It's truly ironic that both the former and present CEOs of REI are Boomers.

Why fret? Well, ageism for one. Another is diversity. If you walk into any REI on a typical shopping day, you'll see plenty of middle-aged adults.

The cynic might conclude that REI does not need to represent Boomers in its marketing communications. We're already fanatical over the brand.

Since when does excluding, by omission, a market segment worth at least 27% of the business make sense from a brand-building perspective?

Oh, and by the way, REI's goliath competitor Cabela's is opening a store soon in Denver. Maybe I should think again about my outdoor outfitter brand loyalties.

Alpha and Omega of Pundits

There was a time when very few people "got it."

Fifteen years ago, Boomers were about to transform what it means to be middle-age and older, but news reporters rarely appreciated -- or covered -- this looming mega-shift in society. One person did understand the coming demographic tidal wave, and he began popularizing this transformation in a path-breaking book published in 1989, called Age Wave.

Dr. Ken Dychtwald has since become one of the most respected thought-leaders about the social and economic implications of aging Boomers. A psychologist, demographer, and gerontologist, his first book on the subject changed my life as I began taking care of my aging parents and developing my awareness of the unique, often disconcerting challenges besetting older adults. The journey became even more of a mission after my parents passed away in 2000. Ken's second book, Age Power, galvanized my commitment to building greater awareness of Boomer marketing opportunities and challenges, while addressing ageism and generational antipathy. As Ken told me in a recent email, "What a long, strange trip it's been."

The latest author to step forward with a thought-provoking book about Boomers is Chuck Nyren, author of Advertising to Baby Boomers (Paramount Market Publishing, May 2005). Chuck and I connected shortly after I published the first edition of Marketing to Leading-Edge Baby Boomers. He was, and still is, the editor and chief pundit of a blog about Boomers, which was established several years before web-logging became so popular. I was immediately attracted to Chuck's strong understanding of the Boomer zeitgeist and his irrepressible wit. He was generous to give my book an early positive review, and we've stayed in touch through email and numerous telephone conversations. Now we even share the same publisher.

Chuck's newest blog is a valuable resource for insights about Boomer advertising, as well as jocular social commentary. He's also one heck of a creative director and copywriter -- a uniquely qualified individual for companies planning to pursue Boomer markets.

Ken is the Pied Piper and started the parade, and now Chuck has jumped on the bandwagon with the newest thinking about reaching this enormous market opportunity through focused advertising. It's been a long, strange trip, but the adventure is really just beginning. Welcome aboard, Chuck!

Boomer Marketing Basics

I receive calls almost daily from reporters who have many of the same basic questions about marketing to Boomers. Here are three of the most common questions and the Cliff Notes version of my answers.

1) How is marketing to baby boomers different from marketing to the public in general?

The baby boom generation is composed of Americans born between 1946 and 1964. Post-world War II parents procreated 76 million times during this span (call it pent-up demand), and immigration has expanded the cohort by six to eight million since the end of the boom.

Those born between 1946 and 1955 are called leading-edge boomers; those born during the second half are referred to as late- or trailing-edge boomers. Generation Jones is a new designation gaining popularity to describe the second half of the boom.

Pundits agree that two sociologically distinct generations have been enveloped in this nineteen-year package. The leading-edge boomers are different from their younger brothers and sisters in some fundamental ways.

Members of the older group shared teenage encounters with the galvanizing experiences of the Vietnam War era and the "cultural revolution," including modern feminism, civil rights, and environmentalism.

Leading-edge boomers vividly remember the assassinations of JFK, RFK and MLK, as well as the debut of Four Lads from Liverpool on The Ed Sullivan Show.

The rest of my comments will focus on the leading-edge boomers because they are nearest to retirement, with bountiful implications for the housing, health, and hospitality industries, to name a few.

Marketing to a generational cohort, as opposed to a demographic or lifestyle segment, draws validity from an observation developed by a German psychologist: a zeitgeist. This simply means a shared sense of a time, particularly the impressionable years surrounding early adulthood.

Leading-edge boomers shared an intense and captivating coming-of-age period, and this has created many common values. Unique generational values and shared life experiences create fertile opportunities for message construction, offer strategies, and product positioning.

2) How much influence do boomers have in terms of numbers and disposable income?

Every eight seconds, another boomer turns 50. That's ten- to twelve-thousand per day and four million per year. Of every three adults over 21 in the U.S., one person is a boomer.

Furthermore, America is getting older every month. We can count on one-third of the U.S. population being over 50 by 2010. By 2020, one in five Americans will be over 65.

Businesses not planning to target over-50 markets are limiting growth as youth markets shrink by comparison.

It's also about the money.

Today, 50+ American adults represent 38% of the population, and that group will explode to 47% by 2020. According to data collected by the U.S.

Census and Federal Reserve, the 78 million Americans who were 50 or older as of 2001 controlled $28 trillion, or 67% of the country's wealth.

In 2000, households with someone in the 55-to-64 age group had a median net worth of $112,048 - about fifteen times the $7,240 reported for under-35 adults. Annually, boomers spend around $2 trillion on goods and services, and by 2010, they will outspend younger adults by $1 trillion.

A huge generation guarantees attractive and sizeable market segments for all comers, whether business-to-consumer or business-to-business. A generation accustomed to experimentation and a surfeit of brand choices since infancy obliterates the myth that brand experimentation hardens with age.

3) What are the boomers looking for in a sales pitch?

Boomers resonate with marketing messages that help them process their lives. Although they still maintain youthful idealism and verve in many ways, they are now middle-aged adults with middle-aged value frameworks.

For example, the quest for self-discovery and self-actualization are fundamental mid-life issues. Boomers are increasingly seeking paths toward self-expression, while advancing agendas focused on balance, core values, and psychological self-reliance. People who arrive at this stage of development become more concerned about relevance and legacies, less concerned about acquisition for purely material satisfaction.

When boomers were young, marketers sold them tailored products - tangible goods such as bell-bottom jeans. Companies then expanded products with services such as the increasing conveniences offered by fast-service restaurants. Today, the newest source of value creation is experiences: promotions, events, and shopping environments designed to engage boomers in a personal and profound way.

The key to marketing with experiences is to position brands as a reflection of unique psychological encounters. Experiences create memories, rich with sensations and personal engagement. Boomers are experience seekers, especially today in mid-life. As I've demonstrated on a number of occasions for our clients, even direct mail can be more experiential.

Finally, aging is often associated with the values of comfort, predictability, and routine, but healthy boomers defy these generalizations.

Many head in the opposite direction and embrace unabashed experimentation as a pre-retirement lifestyle.

Experimental behavior could manifest itself in a number of new ways.

That's why the adventure travel and edutainment trends are gaining momentum in the early years of the new century.

Any discussion about marketing to a generation this brief is of course rudimentary. If you'd like to explore the depths of the topic to enhance your chances for marketing success, then begin by visiting my website: www.marketingtoboomers.com. If you're inspired by the possibilities but really need to dig deeper, then please take a look at the 3rd edition of my book at Amazon.com.