From Pyramid to Pillar: Opportunities Abound in the Baby Boomer Market
By Bonnie Knutson Professor, The School of Hospitality Business/MSU | December 22, 2019
I'm a nerd of sorts. Especially when it comes to numbers, statistics, data, and algorithms. I suppose part of it comes with just being a PhD. After all, a doctoral degree is, in essence, a research degree. And research essentially means a lot of numbers. But my interest in data probably stems more from growing up in a family business whose success depended on numbers. Customers. Sales. Inventory. Costs.
I can still hear my dad telling me that if you don't understand the numbers, you can't understand people. And if you can't understand people, you can't succeed in business. Dad only had an eighth-grade education, but he graduated with honors from the school of hard knocks. In other words, he had what we call street smarts. He got it.
Years later, management guru Peter Drucker told us the same thing in a different way when he supposedly said that "you can't manage what you can't measure." Actually, what he really said was that if you can't measure it, you can't improve it. Or as American statistician W. Edwards Deming quipped, "In God we trust, all others must bring data."
Given this background, then, you can see why I'm somewhat of a numbers nerd – especially when it comes to demographics. I still hear you, dad. I want to understand the numbers, so I can understand people. Consumers. Guests. So, it probably isn't surprising that one of my "go-to" websites is the U.S. Census Bureau, particularly the pages that look at projections of the population.
Not long ago, on one of those first chilly evenings when you know winter isn't far away, I was clicking away on my laptop when I came across of graphic on the U.S. Census website that put a lot of data into perspective. The title of the graphic was From Pyramid to Pillar: A Century of Change, showing the difference in demographics between 1960 and 2060. It was one of those Ahah! moments that brought into focus the dramatic transformation that is taking place in the U.S. population. And in some ways, in other developed countries across the globe too.
What really hit me, however, will happen in 11 short years from now when our population reaches a tipping point. For 2030 will mark the moment when all baby boomers will be at least 65 years of age – pushing that pyramid into a pillar. Think about this: 20 percent of our population will be of retirement age. That is one in every five. Jonathan Vespa, a U.S. demographer, puts it this way: "The aging of baby boomers means that within just a couple decades, older people are projected to outnumber children for the first time in U.S. history. By 2035, there will be 78 million people 65 years and older compared to 76.7 million under the age of 18." (And you wonder why social security is called the "third rail" in politics?)