The six shopping worlds of baby boomers - spending habits

Business Horizons, Sept-Oct, 1994 by William R. Swinyard, Heikki J. Rinne

Baby boomers have dominated American culture for nearly five decades. Likened by demographers to a pig moving through a python, boomers account for one-third of Americans80.6 million of the 250 million U.S. residents. They are the children born during the baby boom of 19461964, the offspring of women who had more children than those in either the generation before or after them. In 1946, for example, the first of the baby boom years, 19 percent more babies were born than a year earlier. During several of these years the birthrate approached 120 births per thousand women, compared to 67.2 in 1988. At its peak in 1957, mothers of baby boomers had 3.8 children, in contrast to just 1.9 children today. And of course, in the business world, the boomer birth explosion has been a retailer's fantasy, an absolute windfall.

Nearly everyone tends to speak about baby boomers as if they are all alike. This article, however, examines their diversity--the heterogeneity of their attitudes and behaviors, particularly with regard to store choice. By means of a study based on a national sample of baby boomers, we define and profile six segments of boomers from the perspective of discount-store shopping choice, shopping lifestyles, and demographics, and show the very substantial differences between these segments.

The focus is on boomers' discount store shopping, rather than shopping of other types, because discount stores are preeminent in retailing today. In 1961, total discount store sales comprised 5 percent of total U.S. retail sales, or $4.4 billion. Today just three discounters (Wal-Mart, K mart, and Targe0 capture that portion of total retail sales, with combined volume of nearly $100 billion. The two largest retailers in the country (Wal-Mart and K mart) are discounters; many say discounters are at the pinnacle of retailing.

BACKGROUND

For years we have been taught by the media to expect baby boomers to sing the refrain, "All I want is all there is and then some." Now we find that their spending patterns are changing. In a recent issue of Business Horizons, Ken Dychtwald and Greg Gable (1990) described lifestyles that will distinguish baby boomers in the year 2000. Among their predictions were that booreefs in middle age will delay typical signs of maturity, defy the age purchases and markets normally associated with older adults, continue to balance work, family, and play, seek quality above all else, increasingly seek comfort and convenience, and show more interest in buying "experiences" over tangible products.

In support of these predictions, American Demographics (1991) recently observed:

Baby boomers are burning out. [According to a Gallup Poll,] forty-three percent of employed [baby boom] women... expect to reduce their job commitments in the next five years [while] 23 percent ... say they will quit work altogether within five years, along with 11 percent of men .... Virtually all baby boomers already say that family is a "very important" part of their life, and many of them plan to spend more time on spiritual and religious concerns in the next five years.

Another observer noted:

When baby boomers were little, it was easy to predict their consumer needs. They needed diapers, followed by sandboxes, schoolbooks, and Beatles albums. But businesses have discovered that once baby-boom consumers reached the age of 30, you couldn't trust them anymore. (American Demographics 1992)

Though we might not be able to "trust them anymore," we can try to understand them better.

THE STUDY

This study was conducted among 1,003 adult shoppers in six geographic markets saturated with discount stores: St. Charles, Missouri; Boise, Idaho; Champaign/Urbana, Illinois; Albuquerque, New Mexico; Eugene/Springfield, Oregon; and Louisville, Kentucky. We sent 3,300 questionnaires to a probability sample of female shoppers, with the mailout divided equally among the cities. Each mailing included a cover letter, a six-page questionnaire, a $2 bill, and a business-return envelope. The questionnaire included measures of the importance of store attributes in choosing a discounter (22 attributes), respondent lifestyle measures (40 items), store use patterns, and demographics. By the cutoff date, 1,003 responses had been received for a return rate of 30.4 percent. The 544 respondents who are baby boomers became the focus of the study.

From the start, the boomers were to be segmented on the basis of the attributes they sought in a discount store. The store attribute listing was compiled from focus groups, a specialized "repertory grid" technique, and a complete search of literature. These procedures produced nearly 200 store attributes, which were reduced in number by a pilot test to the 22 key items included in the study. In the questionnaire, each attribute was expressed as a statement ("The store's 'sales' and specials are real bargains," "The store has fast check-out, even when it's busy"), and respondents indicated its importance in choosing a discount store on a one-to-five scale.