Cecily O'Connor
RedwoodAge.com
Becoming a grandparent is such a momentous occasion that most baby boomers can't resist the temptation to buy mountains of toys, diapers and clothes.
Their spoiling instinct typically kicks in before the new baby is born, with boomers transitioning into the "grandparent life stage." That leaves them willing to spend their discretionary dollars on child-related products and services that they haven't thought about for decades, said Jerry Shereshewsky, chief executive officer of Grandparents.com.
December gift-giving motivates many grandparents to shop even more for their grandkids, but most don't need a holiday to justify their spending. Grandparents shell out, on average, nearly $1,700 on every new grandchild, which includes gifts before birth and during the first year, according to a joint study of 400 grandparents over 40 by Grandparents.com and Focalyst, a boomer research company. First-time grandparents spend even more - $1,882 compared to the $1,501 that comes out of veteran grandparents' wallets.
Boomer grandparents may feel even more freedom to hit the toy stores if the Federal Reserve lowers interest rates, spurring consumers and business alike to boost spending and revitalize economic activity. As it is now, about 72 percent of grandparents start spending before the child is born.
The study suggested that advertisers might even be re-thinking their campaigns to reach aging boomers, who are expected to collectively pour billions into stocking their own homes with baby items and making financial investments for young heirs.
Grandparenting Boom
There are more than 70 million grandparents in the US, a number that's expected
to swell as more members of the baby boomer generation, now aged 43 to 61, greet
new additions to their families. By 2025, one in four Americans will be
grandparents.
For most first-time grandparents, the sky is the limit. Those who invest money on behalf of their grandchildren put away about $3,150 for the first grandchild, more than double the amount of seasoned grandparents, the study found.
New grandparents are also buying baby-related items for their own homes, with a majority nabbing nursery essentials such as baby furniture, diapers, baby food and safety items. That's in addition to toys and clothes.
Online stores such as Amazon.com feature checklists for grandparents keen on having their homes equipped with suggested baby essentials. But not every retailer or company is thinking about boomer grandparents.
"In fact, our research shows that almost half of grandparents surveyed feel that ads today are geared toward the younger generation," said Heather Stern, director of marketing at Focalyst. "Moreover, most grandparents feel that the ad industry does not accurately portray them."
Web Influence
About 71 percent of grandmothers and 51 percent of grandfathers tell others about
products that excite them, indicating how effective word-of-mouth marketing is
with this group. Moreover, the Internet is cited as the most widely used source
for grandparenting information to buy products, compare prices or share photos.
Many grandparents also plan for the future. Fifty-nine percent said it's important to make financial investments for their grandchildren.
Of those who invest, nearly three-quarters said they want to contribute to their grandchild’s education. Another 70 percent said they wanted to give their grandchild a financial head start, while 40 percent said their grandchild’s parents are not in a position to invest on behalf of their children themselves.
