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Why baby boomers are a diverse home improvement market with buying power

Thursday, November 3, 2016   (0 Comments)
Posted by: Pam Heidel

 

In 2015, millennials grew to 75 million strong, surpassing baby boomers as the largest generation. Despite this, boomers still dictate much of the home improvement market. With vast buying power and a significant share of the home-owning segment (almost 50 percent), boomers will continue to influence the home improvement industry for at least 20 more years.

 

George Leon, Ph.D., senior vice president of NAXION Research and Consulting, presented at this year’s HIRI conference in Chicago on the importance the boomer generation will continue to play in the home improvement market. From the PPTS research Naxion conducted, three main trends around boomers emerge:*

 

1. Baby boomers want to age in place.

 

Unlike the Greatest and Silent generations, boomers want to age in place. While a small portion equally want to downsize or upsize, most boomers want to remain in their current home or a house of similar size. According to Leon, there are a few reasons for this.

 

“There are two main reasons for boomers wanting to age in place,” Leon said. “The first is their children. Nearly one-third of boomers who are married with children have an adult child living at home, sometimes with their own children. The second reason is also their children, but with a slightly different angle. Empty nesters, single heads-of-household and those living alone want to configure their homes to support visiting children and grandchildren. They want the capability to have people stay with them for extended periods of time.”

 

Despite wanting a larger home for guests and family, boomers also want convenience within their space. If they have the money, many invest in upgrades that will help in the future, from high-quality appliances to new windows, and widened doorways for walkers or wheelchairs to safety products in the bathrooms. Boomers want their home to be comfortable and maintenance-free as they age.

 

2. Baby boomers don’t shy away from connectivity.

 

While millennials may corner the market on all things tech, boomers embrace many home products that can make their lives easier, especially into their aging years. When selecting upgrades for their home, boomers look at design, functionality and connectivity in products.

 

“Mechanized windows and window treatments have been around for a long time,” Leon said. “Now boomers want to see connectivity included in products like this, so they can continue to operate and engage with these home features as they get older.”

 

But using connectivity as a catchall won’t guarantee boomer satisfaction. Connected products must also have an element of practicality and functionality geared toward making daily tasks convenient and safe for the boomer population.

 

3. Not all baby boomers are created equal.

 

The baby boomer generational segment is broad and diverse, reflected in stage of life and spending patterns. They can be broken down into four distinct categories:

 

-          Married with children: About 1 in 3 boomers has an adult child still living at home. They make up 17 percent of home-owning boomers and tend to prioritize projects such as repaving the driveway or refinishing flooring. The married with children segment spends about $2,450 annually on home improvement products.

 

-          Single-headed households: Females predominately make up this category. Single-headed households account for 15 percent of home-owning boomers. They spend about $1,890 annually on home improvement products, choosing to spend money on services instead.

 

-          Empty nesters: Empty nesters are the largest segment of home-owning boomers, accounting for 41 percent. Because they have two incomes and are not supporting adult children in the home, they spend $2,624 annually on home improvement products. Empty nesters also take on the largest home improvement projects, such as remodeling bathrooms and kitchens, adding on to the house and building a carport or garage.

 

-          Living alone: Those living alone tend to be the oldest group and have the lowest average annual product spending at just $1,052. Although this category makes up 27 percent of home-owning boomers, this predominately female category prefers to rely on services.

 

Key takeaway: holistic approach with generational options

 

Leon says using this data can help retailers, distributers, manufacturers and marketers determine their strategic approaches to baby boomers.

 

“It’s vital to understand boomers’ needs and preferences,” Leon said. “We know they tend to be retail-reliant and want delivery and installation options for products and services that make their everyday experiences easier and more efficient.”

 

But Leon cautions against catering to a single generation.

 

“Given the diverse interests of baby boomers, Generation X and millennials, the challenge is to be attentive to each,” Leon said. “We cannot focus on one segment while excluding the others. We need to be in touch with all parts of the market while maintaining a holistic view. There is no ‘one size fits all’ solution.”

 

So what does this mean for those in the home improvement industry? Leon advises offering products and services that will address and serve the near-future needs of baby boomers, while keeping an eye on the millennial horizon. 

 

*All data is from HIRI’s 2016 Product Purchase Tracking Study, which asked respondents about purchases made in 2015. 

 

 

This content includes material presented at the 2016 edition of HIRI’s Insights Conference. Watch for more details regarding next year’s conference, scheduled for September 19-20 in Chicago.


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