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News for Baby Boomers
Aging Baby Boomers Reluctantly Losing Spending Spotlight
to Echo Boomers
Visa says Echo Boomers will be spending $2.45
trillion by 2015
May 26, 2007 - As Baby Boomers move toward
retirement, their massive influence on consumer spending is about to be
eclipsed by the nation’s second largest generation - Echo Boomers. To
better understand what this generational shift means to a nation whose
economy is built on consumer spending, Visa USA commissioned a survey of
Echo Boomers (born 1979 to 1989; ages 18 to 28) and Baby Boomers (born
1946 to 1964; 43 to 61 years old). The results offer insights on where,
how and why this transfer of spending power may impact the economy.
The first of four installments explores contrasts
in self-image between the generations and related patterns of spending,
saving, and planning. It reveals Echo Boomers to be more practical and
mature in their spending habits and more generous to others,
characteristics often not associated with their generation.
“The Baby Boomer generation has had a profound
influence on the U.S. economy over the past several decades,” said Wayne
Best, Visa USA’s chief economist. “However, as they enter the ‘golden
years’ and their spending influence wanes, we must begin to focus on the
even larger spending impact that Echo Boomers will have on our
economy.”
Visa USA estimates that by the year 2015, the Echo
Boomer generation will account for approximately $2.45 trillion in
annual spending.
Echo Boomers View Their Own Spending Habits as
Responsible
The study reveals that Echo Boomers, who believe
they are facing a difficult economic future, are demonstrating a more
practical and mature approach to spending beyond their years.
● Nearly half of Echo Boomers (48 percent)
describe themselves as savers.
● When it comes to shopping, Echo Boomers are
focused on getting more value for their money: 69 percent consider
themselves wait-and-see shoppers, and 83 percent say they are bargain
shoppers.
● 80 percent of Echo Boomers stick to a strict
budget when making purchases and 81 percent describe themselves as
trying to cut back on what they spend.
● Even at their young age, more than 70 percent
of Echo Boomers are concerned about having enough money for retirement,
a degree of concern similar to the about-to-retire Baby Boomers (78
percent).
While Echo Boomers view themselves as responsible
spenders, they are increasingly skeptical as to whether their entire
generation is doing the same. According to the survey, when asked to
compare their peers to members of other generations, 65 percent of Echo
Boomers believe their generation is falling behind economically and 81
percent do not believe their generation is spending more responsibly.
Echo Boomers View Spending as an Opportunity to
Spread the Wealth
Although Echo Boomers have been characterized as a
generation too focused on its own wants and needs and unmindful of
others, survey data suggests that they view spending as a way to give
back to others, particularly family members and charities.
● 88 percent of Echo Boomers like to buy things
for others more often than buying things just for themselves.
● If they had extra or discretionary money to
spend, 63 percent of Echo Boomers would most likely spend that money on
something for others.
● Approximately 81 percent of Echo Boomers say
they are giving what they can to charities.
Baby Boomers Have Negative Views Towards Echo
Boomers
According to the survey, Echo Boomers’ and Baby
Boomers’ perceptions of each other provide striking contrasts. Whereas
Echo Boomers have mostly positive views of their older counterparts,
Baby Boomers have largely negative views of Echo Boomers and tend to
misunderstand this generation.
● Only 25 percent of Baby Boomers describe the
Echo Boomers as an admirable generation compared to 68 percent of Echo
Boomers who admire Baby Boomers.
● Approximately 68 percent of Baby Boomers
believe Echo Boomers are too self-centered and focused upon themselves
● While Baby Boomer have a desire for youth, only
7 percent would prefer to be a member of the Echo Boomer generation
“When you consider that many of the individuals
setting business and marketing strategy today are Baby Boomers,” said
Susanne Lyons, CMO, Visa USA, “it’s alarming to see that as a
generation, they have various misconceptions of a demographic projected
to be so influential.”
Additional highlights from “How America Spends”
include:
● According to the Yankelovich Monitor, being
seen as “financially successful” is important to 49 percent of Echo
Boomers, a 13 percent increase since 2002.
● Echo Boomers (77 percent) more often feel the
need to manage their spending better than Baby Boomers (66 percent).
● Echo Boomers believe they have more stress and
anxieties compared to other generations (71 percent).
● Nearly half of Echo Boomers (49 percent) think
that they do not have a better life compared to other generations.
How America Spends
How America Spends was conducted by The
Segmentation Company (TSC), a division of Yankelovich, between February
22, 2007 – March 12, 2007. The study included 1,000 interviews (500
Echo Boomers; 500 Baby Boomers) via telephone using random digit dialing
(RDD). Survey results are nationally representative, and the margin of
error for each generation group is ± 4.5 percent.
Upcoming installments of “How America Spends” will
cover topics ranging from what influences Echo Boomer and Baby Boomer
spending and which retail categories will benefit the most from their
spending habits.
To review the “How America Spends” survey, please
visit
www.visa.com.
About Visa USA
Visa USA is a leading payments brand and the
nation's largest payments system, enabling banks to provide their
consumer and business customers with a wide variety of payment
alternatives tailored to meet their evolving needs. Visa USA is
committed to increasing the choice, convenience, acceptance and security
of Visa payments for all stakeholders – financial institutions,
cardholders and merchants. In the United States, more than 521 million
Visa-branded cards have been issued by our 13,320 financial institution
customers.
Visa products generated nearly $1.8 trillion in
total volume in the United States through March 2007 and enjoy
unsurpassed acceptance around the globe. For more information, visit
www.visa.com
About The Segmentation Company
The Segmentation Company (TSC), a division of
Yankelovich, is a full-service custom research division conducting
research for business, the media, associations, and government. It
specializes in studies conducted for media release as well as in
segmentation research, positioning studies, brand equity, and market
sizing.
Yankelovich, Inc. (www.yankelovich.com) delivers
measurable breakthroughs in marketing productivity for it clients. For
more than 30 years, the Yankelovich MONITOR has tracked and forecasted
consumer value and lifestyle trends. Yankelovich is headquartered in
Chapel Hill, NC.
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