While focusing on Millennials, we have forgotten about the power of older generations
“One of the largest generations in history is about to move into its prime spending years. Millennials are poised to reshape the economy; their unique experiences will change the ways we buy and sell, forcing companies to examine how they do business for decades to come” (Goldman Sachs, ‘Millenials’)
There is no precise age band to identify a millennial. Usually, they are considered to be those born after 1980 and entering the workforce after 2000, which today puts them between the ages of 20 and 35. They are characterised as tech-savvy, social and confident. Dynamic and young, they represent the biggest single generation since the post-war Baby Boom, and as they move into adulthood they are getting a lot of attention from companies as a desirable consumer segment, as Goldman Sach’s comment above demonstrates. Millennials buy online, compare products and read and write reviews. They are enthusiastic about healthy eating and exercise, a fact illustrated by a dramatic rise in spending on sports equipment. They are helping to form a sharing economy, where people pool their resources to share everything from their cars, their houses, their to-do lists, their pets and their music. Companies are more than willing to take up the challenge of appealing to this segment of the population.
Few people seem to mention, however, that they also have relatively limited spending power, high unemployment and lower incomes than other generations. Millennials are limited by student loan repayments and extortionate rents. An optimistic 93% of Millennials in the US say they are planning on buying their own home someday (Goldman Sachs, ‘Millenials’), and so have to save up their limited income to get on the property ladder.
Why is so much fuss being made about the young, when there is another generation which is already enjoying the bounty of their ‘prime spending years’?
According to the UK’s Daily Telegraph, over 50s are the biggest consumer market in terms of spending in the UK. In fact, 80% of the UK’s wealth is held by the over 50s, thanks largely to their vice-like hold on the property market, with the number of over 55s expected to grow to 1/3 of the population by 2018 (The Telegraph). Only 39% of those aged 55 and upwards are planning on moving house – many are already in a comfortable position and able to spend money on more interesting things. Baby-boomers aren’t doing too badly on the healthy eating and exercise front either – one in eight finishers at the London marathon this year was over 50 (The Telegraph).
On a personal note, my grandmother used Facebook and email before I was even aware of it; like Millennials, she was confident and adventurous, and enthusiastic about healthy eating and exercise. In fact, my grandmother actually started one of the first initiatives of a sharing economy –a homesharing program – in the 1980s. She was curious and dynamic, adventurous with gastronomy and wine, and due to the fact that she bought her house decades ago, she benefitted from the rising house prices, making her able (and more than willing) to spend money on the things she wanted. I can confidently say that in attitude, my granny was a Millennial at the age of 84.
How does this fit into the world of wine?
According to our UK Portraits report, 39% of UK regular wine drinkers are over the age of 55. Many of them tend to buy wine at mid to high price points, they are knowledgeable and adventurous in their tastes, and they are the key consumers for lesser known regions and producers. They buy cases more frequently than younger consumers and stockpile their favourite wines when they’re on promotion. Many of them are drinking less than they used to, but are willing to pay more per bottle.
Of course, what with the fact that age is not an indication of personality, these traits do not apply to all over 55s – you’d have to read our report to get a better idea about how this age group fits into different profiles.
So, with the highest growth in spending than any other demographic, and contributing £300 billion to the UK economy every year, I think it would be sensible to stop defining people’s personalities by their age, and to start paying more attention to the over 50s.
Author: Eva Maitland