Grandparents give of themselves

American Demographics, June, 1996 by Christy Fisher

Grandparents are becoming a more important way to reach the kids' market. "Okay, so I spoil them," says the TV grandmother who visits Burger King to collect a series of glasses for her grandchildren. "I'm a grandma. That's my job." In another commercial, an elderly gentleman bonds with his granddaughter over a can of Pepsi.

Grandparents in the U.S. estimate that they spent a median of about $400 on grandchildren in the year before New York City-based Roper Starch Worldwide interviewed them last August. This total includes toys, videos, and other fun stuff, but it also includes clothing and food. The largest shift has been among grandparents who spend more than $800 a year, from 13 percent in 1992 to 22 percent in 1995.

This growth represents a significant opportunity to marketers of children's clothes, toys, food, and education products, as well as financial and insurance products, says Robert Perlstein, president and CEO of Lifestyle Change Communications, an Atlanta-based marketing and sales company. With the mature market on an upswing, "the grandparent market is just going to explode," he says.

The real explosion is a few years away. The largest portion of the baby boom won't reach peak grandparent age for a while. In the meantime, marketers should concentrate on understanding what it is grandparents do. "The role of the grandparent may be fundamentally changing," says Rebecca Chekouras, vice president of research for Age Wave, a marketing services firm in Emoryville, California. "Grandparents may be becoming secondary providers. They may be caring for the child while Mom is at work, and they may be the financial safety net of the child."

An estimated 2.3 million American children under age 15 were cared for by a grandparent in 1993 while their mothers worked, according to the Census Bureau's Survey of Income and Program Participation, up from 1.8 million in 1688. About 3 million children live in their grandparents' home, with or without one or both of their parents. Close to 2 million more have grandparents living with them in their parents' home.

"There may be more opportunity for grandparents to interact with the grandchildren because of the number of working, single, divorced, and separated parents," says George Moschis, director of the Center for Mature Consumer Studies at Georgia State University in Atlanta. "Also, there has been a deterioriation in the buying power of the family. Grandparents may be helping pick up the difference."

Parents devote a lot of their economic resources for the basics of food, shelter, and clothing. They buy toys and other gifts, of course, but "grandparents will spend more than a parent will," says Tracy Greenawalt, manager of marketing communications at Healthtex, a children's apparel manufacturer in Greensboro, North Carolina. "They are more driven by cuteness and quality, rather than price. Also, they don't have to have a reason, like a birthday or Christmas, to buy." Half of grandparents surveyed by Roper last summer had purchased a gift for a grandchild in the past month.

Grandparents spend time with grandchildren, too. Six in ten had talked with grandchildren on the phone in the month before the Roper survey. Half had them over for a meal, and one-third had taken them to a fast-food restaurant. Other outings are rarer, but the share of grandparents taking grandkids to movies, live performances, sports events, and museums has risen slightly since the late 1980s. Perlstein attributes this spurt of energy to the changing lifestyles of older Americans. "Today, there is less of a generation gap," he says. "Grandparents are younger in attitude, healthier, and more active."

TV commercials for food and beverages sometimes capitalize on the strong affectionate bond that grandparents share with grandchildren. Retailers actively court the market by displaying "grandma grabbers" to lure shoppers into stores. Along with its competitor Healthtex, the William Carter Company of Morrow, Georgia, is hoping to cash in on its longstanding reputation for quality children's wear among gift-buying grandparents.

Database marketers are joining the fray, too. American Sampling is a Flemington, New Jersey-based company that distributes GiftPax product samples to new mothers. This year, it is conducting a sweepstakes to begin building a database on grandparents. "It's an important secondary market," says president Pat Przywara. That's because grandbabies are of primary importance to Nana and Gramps.

For more information about grandparents, contact Roper Starch Worldwide at 205 East 42nd Street, New York, NY 10017; telephone (212) 599-0700.