Second50Years Marketing Blog

Peter Francese, founder of American Demographics magazine and demographic trends analyst at Ogilvy & Mather, has written a fascinating article for AdAge about the changing face of the consumer.

Francese’s top demographic trend is the aging of the consumer. He points out that the average head of household in the U.S. is just six months short of 50. The bigger story, however, is the growth in the over 50 demographic…more than 80% of the growth in the number of households for the next five years will be those headed by consumers 55 and older. Francese says, “That’s pretty scary stuff for the youth-obsessed.”

Francese continues:

“Two age groups — 35 to 44 and 45 to 54 (together about 47 million households) — have the highest number of dual-earner married couples, and they account for almost half (49%) of total U.S. consumer spending.

“As these two age groups shrink in the next five years (by as much as 1 million households), a larger share of future increases in consumer spending may have to come from those high-growth households headed by someone 55 or older — many of whom spend much more on services than they do on goods.”

There is good news though since households headed by someone 55-64 have rising household income. In fact says Francese, ” The average household headed by someone 55 to 64 had $10,600 more to spend in 2007 than the average household in that age group five years earlier.”

On the other hand, he points out, risk-averse behavior increases with age. Older consumers may be more careful with their money as they worry about their health and making the money last.

Francese says marketers will be challenged to overcome that risk aversion but says that risk averse consumers want to “hear at least two of these three words: guarantee, safety and experience.”

For more tips and cautions as well as other demographic consumer trends, see Francese’s article.