“Upscale” Baby Boomers Plan Luxury Purchases

July 3, 2014

This article is included in these additional categories:

Boomers & Older | Household Income | Retail & E-Commerce | Travel & Hospitality | Youth & Gen X

Shullman-Baby-Boomers-Luxury-Buying-Plans-July2014Upscale marketers shouldn’t ignore Baby Boomers (49-67), the massive segment of the population that is “even more valuable and affluent” than those coveted Millennials, argues the Shullman Research Center in a new report [download page] detailing the wealth and financial outlook of Baby Boomers. Compared to their share of the adult population, Baby Boomers command an above-average share of total net worth and total income dollars. What’s more, “Upscale” Baby Boomers are looking to spend on luxury products.

“Upscale” Baby Boomers refers to those who either have a personal net worth of at least $1 million or who live in a household with income of at least $250,000. Upscale Baby Boomers number about 9 million, or roughly 12% of all Baby Boomers adults (about 75 million).

These Upscale Boomers by themselves control almost one-quarter (23%) of total estimated net worth, more than the entire Millennials market (21%). In fact, Baby Boomers overall control 39% share of total discretionary spending in the US, compared to 21% share for Millennials, according to a new MarketingCharts Debrief, “Advertising to Baby Boomers; The Why and How” [download page]. The Debrief details the categories that Baby Boomers allocate most of their discretionary spending to, while going into more detail about this generation’s receptiveness to advertising and the channels that are most likely to influence their purchases.

Returning to the Shullman Research Center report, the survey results indicate that 98% of Upscale Boomers are planning to travel for pleasure in the next year (compared to 60% of adults overall), while 52% are planning to buy one or more luxuries in the next year (compared to 34% of adults overall).

Some of the biggest differences in planned luxury purchases between Upscale Boomers and the adult population as a whole are for:

  • Taking a luxury vacation (30% of Upscale Boomers; 12% of adults overall);
  • Buying premium cosmetics (18% of Upscale Boomers; 8% of adults overall);
  • Buying fine/premium wines (27% of Upscale Boomers; 7% of adults overall); and
  • Buying a piece of fine jewelry costing $500 or more (15% of Upscale Boomers; 5% of adults overall).

About the Data: The insights and data presented in the report are based on the Shullman Luxury, Affluence and Wealth Pulse, Fall 2013 Preview Wave, conducted online between August 20 and August 27, 2013, among adults age 18 or older.

Five sample groups were surveyed: in addition to a representative national sample of adults (500 interviews), four household-income segments were targeted to obtain the following number of completed interviews:

  • $75,000 to $149,999: 256 interviews
  • $150,000 to $249,999: 253 interviews
  • $250,000 to $499,999: 253 interviews
  • $500,000 or more: 251 interviews

Additionally, 496 respondents ”” 263 men and 233 women ”” in the survey wave reported that their net worth was $1,000,000 or more and constitute the basis for the report.

Net worth is defined as “…the value of all assets owned such as investments, cash value of insurance, value of homes, bank accounts, autos and other vehicles, companies, real estate, vested value in pension plans, and any other valuables you own” minus “…the value of debts you may owe, such as home mortgages, loans, credit card balances, etc.” Millionaires in the report are defined as consumers with a personal net worth (their share of the household’s net worth) of $1 million or more.

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