A new chapter: the joy of empty nesting - Statistical Data Included

American Demographics, May, 2000 by Joan Raymond

Somewhere in America, seven baby boomers will turn 50 every minute from now until 2014. Marketers' most important customers are these newly liberated parents.

don't call Chris Klepeis "a woman of a certain age." Or, heaven forbid, a senior. If you do, chances are the 52-year-old from Smithtown, New York, might become a little ballistic. Although some marketers may rank Klepeis among the delicately phrased "mature" cohort, she doesn't consider herself "a geezer," "a fogey," or even all that mature. Rather, this human resources exec, who recently moved jobs to a dot-com, says she's in better shape now - physically, mentally, and financially - than a decade ago. Ever since their only daughter, Jill, graduated from college and moved out on her own seven years ago, the Klepeises have added about $15,000 a year to their discretionary funds. And the couple isn't shy about spending that money on life's little luxuries. On weekends, after logging in 10- to 12-hour workdays, Klepeis and her husband, Richie, a 55-year-old master printer, may hop on their motorcycles (fully loaded BMWs, with BMW clothing accessories, of course) for a road trip. Or they may go out to dinner, an activity they indulge in as often as three times a week. If they want a cozy night at home, the Klepeises settle into their home theater, just one of the perks of the estimated $40,000 the couple has spent on remodeling the house in recent years. "I'm not my mother's 52," Klepeis says. "I'm not in the second half of my life. I'm in the first chapter of a brand new book."

welcome to the golden age for the Age of Aquarius. By some estimates, 30 percent of the nation's 78 million baby boomers are - or are about to become - empty nesters this year. The rest will enter this phase over the next decade; somewhere in America, seven boomers will turn 50 every minute from now until 2014. Yet many marketers are ill-prepared to reach this new class of empty nester - consumers who have more money to spend than their parents' generation. "Empty nesters today are affluent, and they are disproportionately represented among most retailers' customer bases," says Sandra Gudat, president of Denver-based Customer Communications Group, which designs relationship marketing programs for companies. "It's typical for a company to say the average customer is 40 years old, has two kids, and makes $40,000 a year. Once you drill down and look at the customer base, it's illuminating. Their most important customers are the empty nesters."

This generation isn't the first to see its discretionary income rise when the kids are grown and out of the house. The median household income of married couples without children at home has grown 25 percent since 1974, after adjusting for inflation, according to American Incomes: Demographics of Who Has Money (New Strategist Publications, 3rd edition). Historically, previous generations have squirreled away that money for retirement. But by all accounts, boomers will have more money and use it differently than their predecessors - even if some of their kids end up moving back home. That's because this group is expected to stay in the workforce longer. They may "retire" from a particular profession when the children are grown, but they're unlikely to give up work completely. These income trends will only intensify in the coming years, according to Age Wave IMPACT of Emeryville, California. About 84.5 percent of the empty-nest parents the company surveyed experienced a boost in discretionary income when the kids left home; more than one-third reported a rise of $10,000 or more.

But few marketers have figured out how to best target the new empty-nest boomer. Perhaps that's because trying to neatly define the boomer's empty-nest psyche is proving as vexing as trying to discern the messages hidden in the Beatles White Album. While one empty nester might be gearing up to test his or her entrepreneurial spirit by starting a business, others might be taking early retirement, thanks to some wisely planned investments. Still others, like Chris Klepeis, a former airline executive, have changed careers and plan to work well past the traditional retirement age. Marketing products to this tie-dye mix of consumers may prove challenging. But ignoring this market may prove even more costly. Says Bill Burkart, CEO of Age Wave: "The empty-nester boomer represents a real marketing opportunity."

Scudder Investment Services Inc. is one company that recognized the potential of empty nesters early. Now it's poised for high growth as boomers enter this stage of life. The financial services firm, in association with the AARP, in 1986 created an investment portfolio geared to the over-50 market. Last year, Scudder surveyed 5,000 boomers and found that 69 percent felt their financial situation will be even better in five years. According to the survey, more boomers (82 percent) feared that they would have deteriorating physical health than not have enough money (66 percent).

But the real change in the maturing population is their will to keep on working: According to Scudder's survey, 53 percent see retirement as an opportunity to dabble in a new career. "That was our wake-up call," says Laura Trumble, a Scudder spokeswoman. "These people don't want to agonize about investing. All the research shows they want to travel and have fun." Adds Marilyn Capelli Dimitroff, a boomer and president of Capelli Financial Services Inc. in Bloomfield, Michigan: "The boomers as a whole, and the empty nesters as a subset, will continue to set trends for the rest of the population."