As the Baby Boom Generation Retires... Increased Use of Home Shopping, Decreased Spending at Department Stores and Marts

[Asia Economy Reporter Seungjin Lee] It has been revealed that the baby boomer generation significantly reduces their use of department stores and large supermarkets after retirement, while greatly increasing consumption through home shopping.

According to an analysis by Lotte Members on the 500,000 nationwide affiliated stores where L.Point members conducted transactions from 2016 to 2019 in shopping, leisure, dining out, finance, education, and culture, the baby boomer generation showed a significant change in consumption patterns before and after retirement.

The analysis targeted retired couples born between 1958 and 1960 for men and 1961 and 1963 for women, considering the statutory retirement age and the average age difference between spouses in that age group. Based on the statutory retirement age of 60, baby boomers born in 1958 retired in 2018, those born in 1959 in 2019, and those born in 1960 in 2020.

The results showed a noticeable decrease in department store consumption after retirement. The per capita spending at department stores for the analyzed group dropped by 13% in 2019 compared to 2016, and the number of visits per person decreased from 19.0 in 2016 to 15.8 in 2019.

Consumption at large supermarkets also declined, but since purchases were mainly for daily necessities, the decrease was not significant. The per capita spending at large supermarkets fell by 10% in 2019 compared to 2016, and the number of visits per person decreased from an average of 20.2 to 18.3.

On the other hand, home shopping usage increased significantly after retirement. Per capita spending rose by 42% in 2019 compared to 2016, and the number of visits per person also increased from an average of 3.3 in 2016 to 5.7 in 2019. However, the amount spent per transaction decreased by about 20,000 KRW compared to 2016. This is because retirees watch more TV after retirement and use home shopping more frequently, but tend to purchase cheaper products than before.

Duty-free store usage by retired couples increased slightly overall (3%), but there were differences between men and women. For women, per capita spending at duty-free stores increased by 10% and the number of visits by 0.3 from 2016 to 2019. However, during the same period, men’s per capita spending at duty-free stores decreased by 13%, and the number of visits dropped by 0.6.

This is interpreted as men having more opportunities for overseas business trips while still working, whereas women have more opportunities for overseas travel after their husbands retire. In fact, before retirement (2016?2017), men used duty-free stores more frequently than women, and their per capita spending was about 170,000 KRW higher.

Source: Provided by Lotte Members

Meanwhile, Lotte Members published the “2020 Trend Pick” on the 6th, which contains these findings. Trend Pick is a book created by Lotte Members to assist partner companies in formulating business strategies. It has been published once a year since 2017.

In this Trend Pick, the so-called OPAL (Old People with Active Lives) generation, the baby boomer generation, was identified as a generation that should be re-focused on in the consumer market due to the accelerating demographic changes.

To publish Trend Pick, Lotte Members analyzed data from transactions made by L.Point members over the past three years at 500,000 affiliated stores nationwide in shopping, leisure, dining out, finance, education, and culture. Additionally, an online survey was conducted through the research platform Lime, targeting 3,000 men and women aged 23 to 64 nationwide (with a 95% confidence level and a sampling error of ±1.79%).

Hwang Yoon-hee, head of the Data Analytics Division at Lotte Members, said, “With more than 800,000 people entering the retired population annually over the next 20 years, not only is the silver industry expected to grow substantially, but a large-scale paradigm shift across the entire consumer market is anticipated. Retailers and industries as a whole must understand the changed needs of the baby boomer generation, a key demographic group, and prepare to meet those needs.”

This content was produced with the assistance of AI translation services.