Each subset within the generational makeup of the consumer market has specific needs, wants and desires, which presents a challenge when trying to capture all segments simultaneously. See the description for each below to better understand their purchasing habits.
The Baby Boomer generation refers to those born between 1946 and 1965. Though they are the oldest of these generations, they do not display characteristics traditionally associated with seniors, and remain healthy and highly active, both socially and professionally, well beyond retirement age. Boomers make up a quarter of the U.S. population, and control $3.2 trillion in spending power.
Having been raised in front of television sets, Boomers have been marketed to for the duration of their lives, and as a result, are known as the ‘consumer generation’. Boomers are quick to spend a dollar or two, and are extending their consumer-driven habits into their golden years, which has served to significantly expand and direct the market. At this stage in their lives, Boomers now have the time and energy to spend their money, and prefer to do so in fun, exciting ways.
Generation X, or Gen X, is the smallest subset of the generations, but surprisingly carries a significant amount of the purchasing influence. Gen Xers are those born between 1966 and 1976, are the heads of family, are well submersed into their careers, and have more potential spending power than any other generation, with 29% of estimated net worth dollars and 31% of total income dollars. Gen X holds the purse strings for their children, Gen Z, and also influences the spending behaviors of their own parents, the Boomers, making their seemingly small representation by population more far reaching than it appears at first glance.
Millennials, born between 1977 and 1992, make up the largest group by number, capturing over 29% of the overall population. Millennials spend roughly $600 billion each year in the United States, and though they do not rank in first place in purchasing power, they are an influential up-and-coming group whose preferences have already significantly shaped the consumer market. Estimates predict that Millennials will account for $1.4 trillion in annual spending by the year 2020. Though Millennials don’t have a surplus of discretionary funds today, they are savvy spenders and have a defined mindset of what they want as consumers. Millennials tend to be cost-conscious, seeking the most value for price.
The youngest of the generations, Generation Z is made up of those born between 1993 and 2001. Generation Z comprises 12% of the current population, with most being college-aged, who already hold more than $44 billion in spending power and upwards of $200 billion in influential spending power (when it comes to influencing their parents about what to purchase). Generation Z is a quickly evolving group of consumers, who
places significant value on the unique and individual. Markets should prepare for the influx and influence of this upcoming generation in order to capture the most benefit from their sector.
Entegra Procurement Services regularly publishes blog posts on food trends and innovations in food services. Entegra is more than a group purchasing organization (GPO): Our team of procurement specialists implement strategic sourcing to bring the most value to your business. We help our clients, in many segments ranging from the healthcare supply chain to restaurant supply, to cut costs and consolidate their portfolios.