d.trio's blog

It’s no surprise that Baby Boomers (those born between 1946 and 1964), are the most important demographic within the U.S. consumer base. They are the largest generation in American history. d.trio researched a range of industry resources to define the most relevant and timely advice for those marketing to Boomers. Here’s our re-cap.

Boomers and older consumers (born before 1965) are the single, largest consumer group in America at over 100 million. They are the wealthiest, best educated and most sophisticated purchasers. With more disposable income than any population in America, they are, the “New Customer Majority” (David Wolfe).

Boomers represent over 29% of the U.S. population. They hold 70% of U.S. wealth and control over 50% of the U.S. discretionary spending powers. Boomer women wield significant buying power; making or influencing 80% of household purchase decisions. Boomers are:

• Health care influencers – purchasing over 61% of all over the counter medications and 77% of all prescription drugs
• Travelers – 80% of leisure travel are boomers
• Health conscious or dealing with health issues – 39% of Boomers are clinically obese; over 80% of Boomers research their health issues online.

Some channel observations for marketing to Boomers:

• They are still influenced by television advertising
• Print media is still alive – they are traditional print readers
• They also like reading online and respond well to electronic books and publications
• Boomer women are more open to change than GenX or GenY
• Their online behavior is consistent – over 91% use email, 88% use search engines and 74% receive news online.

Boomers are early adopters of technology, and in fact, created the technology we enjoy today. Think Steve Jobs/Apple, Bill Gates/Microsoft, Larry Ellison/Oracle…you get the picture. Boomers have spent most of their working lives using technology – they are tech savvy. Statistics show that Boomers will quickly adopt technology that meets their needs, and this adoption rate is increasing every year. For example:

• Boomer women appear to own iPads or tablets at four times the rate of the general public;
• Boomers spend more money each month on technology than Gen X or Gen Y – an average of $650 per month
• Boomers spend 15 hours online per week, compared to teenager’s 13 hours per week
• 45% of Boomers downloaded more than 10 apps in the last year
• 33% read QR codes on their smart phones
• 35% download movies from Netflix or other streaming providers
• 46% buy music by downloading it from a site like iTunes.

Because Boomers are early adopters of technology, we conclude that they are somewhat channel agnostic. The message is more important than the medium. If marketers develop the right messages, they can engage Boomers, regardless of channel.

Life transitions are often at their peak for Boomers. According to an article by Nancy Shanka Padberg, marketers can build their brand by understanding this change and offering understanding and product solutions:

• We make your life better.
• We make your life easier
• We understand you.

From health and wellness to luxury travel or wealth transfer, opportunities abound for marketing to Boomers. However, success will be driven by authenticity, individual connection and relevance.

Numerous blogs from Media Post (mediapost.com) informed this article:
Life Transitions Create New Opportunities for Marketers, Oct. 17, 2011
Who’s Buying All Those IPads? Boomers Become Earlier Tech Adopters Every Year, Dec. 12, 2011
Social Media – It’s Not About Technology, Dec. 5, 2011
A Boomer State of Mind, Nov. 21, 2011
Other sources include Experian Marketing Services and www.boomersweb.net

We’ve seen significant changes in how consumers view and use banks and their products over the last year. These changes will no doubt continue to evolve in a dramatic fashion for 2012. They will drive how banks define their brand and market themselves. d.trio suggests the following four trends as important to track in the year ahead:

Shifting Payment Dynamics
Increasing federal regulations have permanently dented debit cards and paved the way for new forms of payment tools and systems. Debit cards and their reward programs are declining. Credit cards are coming back, albeit with new restrictions and more wary consumers. Demographic groups such as the Millennials and Generation X contribute to the demand for non-traditional payment methods. Pre-paid cards and their usage will continue to grow in 2012. New cards and payment products will be offered by non-bank entities (i.e., Suze Orman and her Suze card), which will alter the competitive landscape of banks and Financial Services. P2P (person-to-person) payment products such as Zash Pay offer a way for young consumers to facilitate direct payments and avoid using cash .

What is the net result for 2012? Traditional payment dynamics will be changed forever and banks’ hold on the payment system will loosen.

Mobile Banking Advances
Mobile banking will ramp up in 2012, driven by the increased saturation of smart phones and tablets. Less than two years ago, smart phones represented approximately 17% of the U.S. market. This increased to 44% by October, 2011, with 64% of cell phone owners ages 25 – 34 using smart phones.* Banks have not kept pace:  A recent mobile banking study revealed that 75% of consumers who use mobile banking did not hear about it from their banks but rather sought it out and tried it on their own!  Clearly, many banks that have been slow to market their mobile programs will look to catch up quickly in order to save face and business.

*Smartphone penetration skyrockets in 2011, Dec. 15, 2011, www.bgr.com

New Branch Paradigm?
Bricks and mortar provide a community face to bank brands, they offer credibility, geographic convenience and a human connection. Today’s consumer still wants a branch bank – but how they use it is changing. The increase in online banking, mobile and other interactive services means that consumers may not require a teller as often but will more likely want to engage with a banker. Consumer demand for consultative, individualized services and financial education will require changes in the physical interior design of a branch (the teller line may no longer be front and center). These changes in service will have important implications for staff hiring and training.

Banks must also continue to rethink best branch locations: Where does it make sense to have a branch? Is it best within a grocery store or other high-traffic retail environments?

Product Innovation
It’s not hard to see that product innovation is being forced by the above shifts in the banking industry. With the effect of daunting new regulations and non-bank payment system vendors coming into the market, banks must become product innovators in order to stay competitive.

From pre-paid card alternatives to P2P payment solutions, the consumer is demanding new products, and is willing to buy them from a credible, non-bank entity if necessary. Banks must confirm a commitment to developing or purchasing new products that work for their customer or desired customer.

Conclusion
The pace of change in banking for the coming year will continue to be driven by all of these substantial market forces. Although this may seem radical for the average bank and financial institution, the opportunity for growth may be greater than ever before. Stay tuned.

Despite the recessionary outlook, online retail sales for the Holiday season exceeded 2010 levels by 15% and reach historic levels. Consumers spent $35.3 billion online, according to market research organization ComScore.

Email and online channel growth was highlighted by a YOY 9% increase to the top 500 retail sites during Peak Week alone (Thanksgiving Day, Black Friday and Cyber Monday). Other specific increases in email-generated revenue and digital marketing include the following, as cited by Experian Marketing Services:

• Average order values increased by 4.4%
• Email volume rose by 19%
• Unique open rates remained positive for most verticals
• 26% of subject lines featured and offer
• Dollars off offers were most popular, vs. the percent off strategy used in 2010

Driving the sales was a welcome increase in consumer confidence, which rose to 64.5% in December 2011. This was a 10 point increase from November of 2010 (Conference Board).    

As we reviewed the results, strategies and tactics employed by online retailers in 2011, several trends emerged:

• The last minute shopper has more options than ever before, as E-gift cards and certificates sales boomed. Most major retailers offered e-gift cards and e-gift certificates that can be purchased online and delivered digitally via email or cell phone. See our list of resources at the close of this article for a list of retailers and their terms.
• Mobile gift cards can be stored on consumers’ cellphones or smartphones and redeemed in-store at checkout (see resources to click to complete article).
• Another morph is the “Virtual” gift card distributed via Facebook. For example, Amazon.com gift card notification can be other posted to a friend’s wall or sent to their Facebook message box, as designated by the giver.
• Gift cards as an overall category (all channels) accounted for 18% of all purchases, a 3.4% increase from 2010.

Retailers are becoming savvier each year in integrating online and bricks and mortar purchasing to maximize sales. A tactic that is becoming more prevalent is “Ship-to-Store.” This option allows customers to buy online and pick up their purchases at a local store, at their convenience. Benefits to customers are savings in shipping time and shipping charges.

The good news continued past Christmas, when consumers continued to spend:  $7.1 billion in sales on December 26^th. This represents a 25.% increase over 2010. Of special note is that 11.3% of these sales came from mobile devices, compared to 4.3% in 2010.

Resources quoted and utilized in this article include:

2011 U.S. Christmas Holiday Retail Data, Statistics, Results, Numbers Roundup www.retailindustryabout.com
Peak Week Sees Email and Online Channel Growth www.experian.com/blogs
2011 Holiday Season Email Snapshot www.experian.com/blogs
Retail Stores Selling Virtual Gift Cards Through Facebook Social Media www.retailindustry.about.com
Mobile Gifts Cards – Complete List of Largest US Retailers With Mobile Gift Cards www.retailindustry.about.com
Best Online Last Minute Gift Shopping Options – E-Gift Cards and Certificates www.retailindustry.about.com
Fast and Free Shipping Option From Online Retailers with Ship-to-Store Options www.retailindustry.about.com