The Aging And The Restless
What happens when the generation that couldn't trust anyone over 30 turns 65-and what will they do in their spare time? How will they spend their Social Security checks (assuming they actually get them)? Where will they buy their golf clubs (assuming they even like golf)? Who will clean their houses? If they're divorced or widowed, how will they get back into the dating scene?
These are the kinds of questions franchisors and franchisees are already asking as they gear up for the passage of baby boomers (those born between 1946 and 1964) into retirement. Nearly one-quarter of America's citizens will be age 65 or older by the year 2030, and 3 million will turn 50 in each of the next 15 years-making aging baby boomers the hottest "new" market around. Not only are they the largest segment of the population, they're also the wealthiest, most educated and most active generation in American history.
The Leisurewear Business
"The boomers are the reason I got into this business six years ago," says Charles Hohl, executive vice president of Las Vegas Golf and Tennis, a franchise that sells golf and tennis equipment, clothing and accessories. "Boomers represent about 75 percent of our customers and are the driving force that will change every retailer."
But with everyone preparing for the boomers, acing the competition will be tough if you haven't done your homework. Demographic research is a must for start-up franchisees looking to rake in big boomer bucks. "First, you have to identify what kind of shows they watch on TV," says Hohl. "Since boomer men watch a lot of sports, we do golf promotions with Fox Sports Networks. We aggressively go after country club memberships in our market areas. We also have major vendors doing co-ops with us."
That kind of aggressive marketing and research creates a strong boomer customer base, which is extremely important for businesses hoping to increase profits in proportion to the boomers' increase in age. Las Vegas Golf and Tennis anticipates a double-digit growth rate this year, mostly stemming from boomer-driven purchasing trends in categories such as leisurewear.
Those leisurewear sales are on the rise thanks to executive boomers' changeover from IBM formal to dotcom casual. Twenty years ago, no serious businessperson would show up at the office wearing a polo shirt and khakis. But today, it's the stiff in the three-piece suit who gets funny looks around the water cooler. Says Hohl, "We're seeing tremendous growth in casual clothing for the office."
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Boomers are also using many services their parents couldn't afford or deemed unnecessary. Maid services, for example, are popular with boomers who could easily clean their own houses but prefer to pay someone else to do it. "Boomers are a large part of our target market not because of their age, but because of their income levels," says Don Hay, 58, president and founder of home cleaning franchise Maid Brigade. "Our research reveals no intention on their part of cleaning house as long as it's an affordable service."
As more boomers approach retirement, the number of those able to afford home cleaning services will also increase. "We're growing 20 percent per annum, and we attribute almost all of [the growth] to boomers," says Hay. "I'd say over 80 percent of our customers are boomers, and most will continue using our services in retirement." Just as casually clothed retirees are unlikely to ever return to their pinstripes, those who start using home cleaning services at age 50 probably won't revert to scrubbing their own toilets at 60.
This is also because boomer women are shattering the myth of the curler-crowned happy homemaker wiping down counters and vacuuming living room carpets. "Ninety-three percent of our female customers are college graduates," says Hay. "They have no desire to clean house as their mothers did."
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Not only do boomer women reject cleaning the house, they're not hanging out there much, either. Single boomer women are more likely to spend weekends sipping cocktails in nightclubs than downing prune juice at their kitchen tables. But finding eccentric old bachelors who aren't just looking for 20-year-olds named Bambi can be a bit of a challenge, especially for those who've been out of the dating scene for a while. That's where The Right One comes in.
After merging with Together dating service in 1999, The Right One is now the largest franchised dating service in the country, with nearly 100,000 members and 100 locations. The company doesn't target boomers so much as boomers target it. "The majority of our customers are boomers. They're the driving force behind our growth," says Paul A. Falzone, CEO and founder of The Right One. "[My company's sales are] up 38 percent from a banner year last year. Our revenue currently exceeds $40 million, and that's an extremely low estimate."
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The growth boomers are spurring in franchises such as The Right One is partly due to sociology. While their parents may have giggled at the notion of going to dating services, boomers are signing up without hesitation. "They're more open to accepting help," says Falzone. And for those who once thought of settling down as old-fashioned, the thought of retiring alone now looms as an equally unattractive option. "Once they have the corner office or the vice presidency, they want someone to share it with," says Falzone.
While boomers might need help re-entering the dating scene, their generation prizes its independence, which is a double-edged sword for franchising. For every boomer who zigs, another one zags. Pinning them down is a demographics nightmare. Still, boomers are united by one common bond: age. And as they near retirement, successful franchisees are stepping in when boomers want to step out. Those tapping into this wealthy, active and educated market should enjoy "booming" franchises for the next 30 years and beyond.