Boomers are going to drive a silver surge

  • 03 September 2021
  • 5min read

Companies long to partner with the Kardashians. Over the past couple of years, we have seen beauty leader Coty Inc., for example, strike cosmetics deals with both Kim Kardashian and Kylie Jenner to appeal to young, social-media-savvy shoppers. Before that, Kendall Jenner was the face of an Estee Lauder Cos. Inc. collection targeting millennials. 

But in 2021, the family member who businesses should really be keeping up with is 65-year-old momager Kris Jenner. The successful matriarch represents just the type of customer they’ll need to court in the wake of Covid-19

Many companies have tended to neglect baby boomers, focusing instead on winning over millennials and Generation Z. The strategy could cost them dearly this year. Older generations are set to get vaccinated first. Once they’re inoculated and free to venture out again, they could drive a silver surge in spending — in some of the worst-hit corners of the economy. 

Not only will this group have more freedom, but they will also have more money to spend. After all, they’re less likely to have suffered job losses from the pandemic, and having to stay home for nearly a year has only swelled their savings.

While American's incomes tend to decline at older ages, wealth remains high
Source: Federal Reserve Board's survey of consumer finances

Already this combination is proving lucrative as seniors rush to book holidays in anticipation of being able to travel again.

That’s good news for TUI AG, the world’s biggest package-tour operator, as well as British over-50s travel specialist Saga Plc. It also bodes well for battered cruise lines, such as Carnival Corp. and Royal Caribbean Cruises Ltd., which are dependent on older customers. Saga is requiring all travelers to be fully vaccinated before taking one of its vacations. If other tour operators follow suit, that could encourage more confidence in overseas holidays in general and, after being cast as Covid superspreader sites, cruises in particular.

Grey Pound
Source: UK Office for National Statistics

We could also see a boost to the broader leisure sector, as seniors typically spend more on holidays closer to home. That may explain why U.K. transport operator National Express Group Plc saw a 250% increase in bookings in its Lucketts business, which offers coach holidays to destinations like Scotland, Cornwall and the Cotswolds, after launching its summer brochure in January, compared with 2020. 

Domestic holidays and staycations also mean more money spent in local restaurants, pubs and other establishments, presuming they are open again. These businesses will benefit from older consumers being free to go shopping and eat out even when they’re not on holiday.  

Boomers tend to spend less on clothing and beauty than their younger counterparts. But with the prospect of holidays and meals out, some wardrobe refreshment looks likely.

Future 50's
Source: Mature Marketing Association

In the U.K., one of the biggest beneficiaries could be Marks & Spencer Group Plc, whose core clothing customer is between 45 and 65. In the U.S., it could be the likes of Chico’s FAS Inc., J. Jill Inc. and Talbots Inc. whose fortunes are lifted. That would be a welcome reversal, seeing as they’re among the mall middleweights that my Bloomberg Opinion colleague Sarah Halzack says have been badly hurt by the pandemic.

But companies targeting the gray dollar should tread carefully. Baby boomers are healthier and have a younger outlook than their parents did. One sure way to alienate them is to treat them as old.

Instead, in travel and hospitality, companies can win them over with high-quality services that emphasize both comfort and luxury. More age diversity in brand ambassadors — think Kris Jenner, not just Kylie — would also help connect with these valuable consumers. Choosing the right platforms matters, too. Facebook, for example, is particularly popular with the over-50s. And online ordering has grown more customary — Walmart Inc. saw more over-50s shopping on its website during the pandemic — creating new market opportunities and sources of data.

To be sure, there are some reasons for caution when it comes to the silver surge. Those between 50 and 64 years old tend to be bigger spenders than the over-65s, and it will take a while before the vaccine rollout reaches this cohort. What’s more, even after being inoculated, some older people may feel nervous about going out and about again.

Nevertheless, it’s still worth paying more attention to this long-overlooked demographic. Even when the health crisis is over, the economic effects will linger. Younger people, especially the many working in retail and hospitality, will feel the most financial pain. Consumer companies better start speaking to the boomers.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners, or of AXA IM. For more articles like this please visit ©2021 Bloomberg L.P.

Related Articles


    (All stocks mentioned are for illustrative purposes only and should not be considered as advice or a recommendation for an investment strategy)

    This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.

    Due to its simplification, this document is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.

    All investment involves risk , including the loss of capital. The value of investments .and the income from them can fluctuate and investors may not get back the amount originally invested.