Passing the Bucks
Echo Boomers inheriting top spender status from Baby Boomers.
It has been said before, but it’s worth saying again: the next generation of big spenders will be the Echo Boomers, who, according to estimates by Visa USA, will account for approximately $2.45 trillion in annual spending by the year 2015.
As Baby Boomers retire and focus on dental and medical expenses, and occasional luxuries such as vacations, as well as gifts for their children and grandchildren, Echo Boomers will comprise the everyday retail spending such as restaurants, travel and entertainment. The findings of the study, commissioned by Visa USA, are the second installment of the “How American Spends” survey conducted by The Segmentation Company (TSC) a division of Yankelovich (see “Hey, Did You Hear An Echo?,” which reported findings of the first installment of the survey, May 25, 2007, demodirt.com).
Baby Boomers are defined in this study as individuals between the ages of 43 and 61 (born 1946 to 1964) and Echo Boomers are those individuals aged 18 to 28 (born between 1979 and 1989).
“We are witnessing a watershed moment in our economy’s history as one uber-generation transfers their economic influence to another,” said Wayne Best, Visa’s chief economist, in a public statement. “As Echo Boomers expand as a proportion of the American workforce and mature as consumers, they will continue to spend heavily in service industry retail categories such as restaurants, travel and entertainment.”
What else will Echo Boomers spend their money on? Findings indicate that restaurants, travel and vacations make up a sizeable portion of their expenses. For instance, Echo Boomers named dining out as their second largest expense (45 percent) after housing costs (69 percent), and 43 percent of Echoes stated that to cut back on expenses due to rising gas prices, they would cut back on restaurant dining first. One in five Echoes (20 percent) stated that travel and vacations are a major or moderate monthly expense. Finally, if given a choice of reward indulgences, 35 percent would simply like a day off just to themselves, while roughly one in five (22 percent) would choose attending a special concert or sporting event, followed by going out (15 percent), going to a spa (13 percent), and buying new clothes (11 percent).
“A stable economy and low unemployment rates are making all generations feel time-stretched,” continued Best. “For Echo Boomers, this translates into spending in retail categories that will help them accomplish everyday goals and experience life to the fullest.”
What do Baby Boomers spend their money on? Again, housing expenses top the list (75 percent), followed by medical and dental expenses (45 percent) and restaurant dining (42 percent). Biggest indulgences are those lavished on their children or grandchildren (34 percent) followed by vacations (16 percent).
“As we learn more about the spending attitudes and behavior of Echo Boomers, the strategies used to reach and engage this generation will evolve,” said Susanne Lyons, CMO, Visa USA, in a public statement. “For marketers trying to capture the hearts and wallets of Echo Boomers, they need to put a greater emphasis on reaching this generation’s parents who ultimately influence their purchases and providing services and unique experiences that allow them to enjoy life.”
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