It's no secret that consumers are spending less these days and that savings rates are rising. Hidden behind this obvious fact is the lesser-known reality that our industry's top customers, the 79 million baby boomers who have been buying, trading in and upgrading their boats for years and years, may be saving themselves right out of the boat market.
According to a recent article in Business Week magazine ("The Incredible Shrinking Boomer Economy"), the American economy is in for a world of hurt as these 60-somethings continue to save their money as this recession tries to turn around. For the boating market, too, these retirees could have a significant negative impact on sales as we look to rebound from this downturn.
But there are things to learn from companies already responding to the decline in boomer business. Here are a few tidbits from the BW article.
- Mercedes created a focus group of 500 or so people aged 20 to 32. Known as Generation Benz, helped the company conclude "that we have to start paying a lot more attention to tomorrow's customers, especially if tomorrow is coming faster than we thought."
- Clothing designer Vera Wang is creating high-end clothing by using a higher quantity of a less-pricey fabric, which gives the garments a "richer look," according to the article.
- Starwood Hotels & Resorts Worldwide has created what it calls "style at a steal." Historically catering to the boomer generation, the company launched two new hotel chains: Aloft, "named to echo the 'urban cool' of loft apartments," and Element, a "low-cost option aimed at people who prefer suites with every 'element' of their daily lives.'"
Whether these strategies will work in the long run remains to be seen, but they underscore our need as an industry to either work to re-tool our products for a more cost-conscious boomer or to appeal to a different generation altogether. As the article points out, "the trick will be finding a way to fulfill the needs and wants of a generation that is used to being catered to — but is now on a budget."
How will you cater to them?