ATLANTA, GA – DECEMBER 29th, 2022 – The marketing industry is abuzz with talk about the pending Great Wealth Transfer and why businesses need to be prepared for it. What does it mean exactly? The term describes the significant shift in finances from the Baby Boomer generation, which amassed the highest percentage of wealth of any generation, to future generations, which includes millennials.
As baby boomers, born from 1946 to 1964, retire, their wealth will be transferred to the next generation, estimated at $68 trillion, which is expected to be the largest wealth transfer ever and affect the economy on a global scale. Marketing pundits are correct, “Brands must be prepared to shift their attention to new-age consumers who look at purchasing and brand sentiment through a different lens,” according to Deepak “Dee” Agarwal, successful entrepreneur and long-time C-Suite executive.
“Within the next decade, companies must implement marketing strategies that future-proof their businesses to attract the next generation wielding substantial buying power,” Dee Agarwal points out. Keep reading to learn more about how companies can prepare for this transfer.
Deepak Agarwal further explains that companies will need to rethink their branding and marketing models, as strategy that worked for one generation won’t work on the next one.
“The previous generations focused on purchasing items to fulfill needs. Later generations are more participative and active in choosing their brands and make purchases driven by preferences and experiences. The brands that can capitalize on this idea and provide intrinsic value beyond their product or service will captivate the next generation of consumers,” Dee Agarwal says.
It’s important to consider that the younger generations strongly weigh the value and beliefs behind the brands they are buying from, consciously selecting brands that align with their morals and social justice. Brands can’t effectively market to these generations by boasting about the functionality of their product in an age where there are limitless options. By connecting with consumers on an emotional level, through storytelling and associating the brand with a feeling or emotion, brands can win favor with upcoming generations.
For example, when it comes to sportswear, many companies make similar products to Nike, but their success can partially be attributed to the emotional ties they’ve linked to their brand. When thinking of hard work and motivation, Nike is likely one of the first names in the category that comes to mind because of the comprehensive storytelling present throughout their marketing efforts. Furthermore, Nike has used their platform to bring attention to social causes to connect with the younger generations through shared values.
Experimenting with New Models
“In order for brands to both capitalize on this wealth transfer and maintain their core audiences they have worked hard to build and nurture, they need to evolve over time, and that includes experimenting with new business and revenue models,” Deepak Agarwal shares.
To evolve new business and value propositions, brands must take the first steps toward capturing a growing market without alienating their current audience that’s been grown and nurtured for years.
Many brands have already made modernizing shifts in their organization aimed to keep up with a new age of consumers. For example, Pandora has launched a sustainable lab-grown diamond collection, playing into the importance of aligned values and morals for younger generations, and extending their business without damaging their core audience.
“Launching pilot projects is a smart way to test, learn, and apply to help future-proof business,” Dee Agarwal explains. “Apart from this, companies can create and launch new brands and products, work with other companies, and even explore partnerships that co-create new business and establish a community of advocates for the brand.”
The great wealth transfer is a rare opportunity for companies to capture a sizable share of the growing market set to inherit the wealth of their forebears. Those companies, however, who fail to meet the need for change will soon find themselves facing a dwindling market and a substantially lower bottom line.