Surging spending confidence among Boomers makes them a renewed target—albeit a challenging one—for marketers in the short term as spending plans bottom out among Millennials and plateau among Gen X shoppers.
That’s the takeaway from data through March from the Spending Confidence Index™, which is the proprietary index of consumer sentiment created by MacroSavvy™ based on data from Prosper Insights and Analytics™.
Home and leisure goods will be the main beneficiaries of surging Boomer confidence as suggested by the category components of the Index. The benefit to retailers and consumer goods companies may be limited, however, by confidence gains that are weighted toward lower-income Boomers—especially in homegoods.
There are some new signs from retail sales data (see more here) that sales may be benefiting from rising confidence of Boomers. But the only clear-cut beneficiary appears to be online sales, while there is mixed evidence of improved gains at home improvement, furnishings, and drug stores.
In terms of other insights from the Index by generation and category:
- Millennials.Their weakness continues to be focused among upper-income (i.e., professional class) shoppers—and that segment’s confidence weakened further in March. Spending confidence fell most of all in the electronics, home and leisure goods (i.e., sporting goods, toys, CDs/DVDs/Videos & books).
- Gen X. Their confidence was mixed in March, with confidence to spend continuing to edge lower among upper-income Gen X and edge higher among working class Gen X. Despite their mixed sentiment recently, Gen X remains the most lucrative target segment over the longer term.
- Boomers. Spending confidence continues to be up most strikingly post-election among working-class Boomers in home and leisure goods as well as clothing. Among upper-income Boomers, confidence to spend is up most sharply in homegoods.
- By Category. The net impact across all generations is that confidence to spend is up significantly across all categories at an aggregate level—suggesting that the Boomer gains are more than offsetting weakness focused among Millennials. Homegoods is the biggest beneficiary followed by leisure goods.
For more background about the Spending Confidence Index™ and its components, the white paper at this link explains why the new index is an improvement over existing measures of confidence.
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