How to Tap Into the Grandparent Market

By Rieva Lesonsky

If you think today’s grandparents are wearing housecoats, using walkers and living on skimpy pensions, think again. A new study of grandparents from Metropolitan Life, reported by MediaPost, finds that most are Baby Boomers aged 45 to 64 (still of working age) who have money to spend and are spending it “lavishly” on their grandkids.

The 46-to-64-year-old age group accounts for nearly half (46 percent) of the nation’s total household income, according to the report. Because the Millennial population is so huge and is entering the age of parenthood, the number of grandparents is growing at twice the rate of the overall population. In 2010, there were an estimated 65 million grandmothers and grandfathers; by 2020, 80 million, or one in three adults, will be grandparents.

The Great Recession has affected grandparents, but one of the interesting aspects of the survey is that grandparents’ children were hit much harder by the economy. While real income actually increased for those in the grandparent age group, the real income of households headed by those aged 25 to 44 dwindled.

As a result, while the traditional stereotype may be of seniors getting financial help from their kids, the reality is just the opposite: Many grandparents are helping their children out financially. “Many of the grandparents were affected by the economic downturn, but did relatively better than their kids did, and were able to step in and provide assistance,” John Migliaccio, director of research for the MetLife Mature Market Institute, told Marketing Daily.

Since direct assistance from parents can be hard to take, grandparents often help their children out in less direct ways such as buying things for the grandchildren. In 2009, households ages 55 or older spent $7.6 billion on infant food, equipment, clothing and toys, an increase of 71 percent since 1999. They also spent $2.43 billion on primary and secondary school tuition and supplies, about triple what they spent in 1999.

Migliaccio told Marketing Daily that grandparents aren’t doing so just to help out. He says they’re also comfortable “redefine[ing] grandparenting” just as they redefined youth during the 1960s and ‘70s.  He noted that these grandparents are sophisticated, educated and “focused on leaving a legacy.”

How can your marketing tap into this profitable market?

• Focus on how your product or service adds value to grandchildren’s lives. Grandparents want to give their kids the same experiences they’ve had, including world travel and a good education, so products or services that serve that aim are likely to appeal.
• Emphasize relationships. Grandparents today are close with their children and grandchildren, so they’re looking for products and services that help them nurture those relationships.
• Don’t treat them like “old people.” Today’s grandparents don’t feel or act old, so treating them that way is sure to turn them off. These grandparents are active and healthy, so make sure the words, images and ideas in your marketing reflect the reality of this consumer group.

Image by Flickr user Jay Gorman (Creative Commons)

This entry was posted on Monday, September 19th, 2011 at 6:00 am and is filed under Generational Marketing, Marketing, Small Business, small business. You can follow any responses to this entry through the RSS 2.0 feed.


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