The Great Wealth Transfer, as some are calling it, will see an estimated $68 trillion of inheritance make its way into the pockets of Gen X, Millennials, and Gen Z. And while the Finance and Insurance sectors have been preparing for years, all marketers should understand what this means for the future of advertising.
Some may still be of the mind that Millennials and Gen Z are too young or outside the realm of their target audience but when we look at generation stats, the oldest Millennials are 42 this year and the oldest Gen Z are 26 (give or take a year or two depending where you land on the date debate).
This means that not only are these generations within your target market, but many of them are also the most important market to your continued growth. And this will only become truer during The Great Wealth Transfer.
What is The Great Wealth Transfer?
As older generations retire and pass away, their accumulated wealth and assets transfer to younger family members, stockholders, or next of kin. Baby Boomers spent a long time with the crown for “most members” before being surpassed slightly by Millennials but rather than their numbers that will matter, it is their money that will cause a ruckus.
The Baby Boomers create the biggest wealth transfer as “the cumulative wealth held by this generation is more than has ever been accumulated by a single generation in recorded history.” And more wealth means more money being transferred when they pass away.
This is extra impactful as the current wealth held by Gen X is only half of what Baby Boomers have accrued and Millennials with five times less than Gen X. This means that these individuals will be significantly impacted as will their buying behaviours.
After all, if you have more money, you can spend more money.
This is where marketers need to be ready. Even if your target audience currently encompasses Gen X, Millennials, and Gen Z, those consumers habits’ will change during the transfer of wealth.
What can advertisers do now?
You’ll need to start by seriously considering how these demographics fit into your overall business and marketing strategy for the next decade and then learning as much about them now as possible. Though The Great Wealth Transfer will change their habits, understanding them now will create a good base for anticipating changes later.
Those brands that are able to see the changes in these demographics as they are happening will be better placed to delight them and scoop up their loyalty.
Place agility at the forefront of your marketing strategy.
What worked for targeting wealthy Baby Boomers won’t work for Gen X and even once they inherit more of that wealth, Gen X, Millennials, and Gen Z will all react differently to their inheritance and that reaction won’t be static. Building agility into your business is a step you can take now to prepare for the dynamic movements of your audience later.
The Great Wealth Transfer is an opportunity for brands to gain customer loyalty and delight a whole new consumer, but marketers must start now to ensure they adapt quickly and successfully.