Make Room for Granddaddy

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A typical Baby Boomer approaches each new life stage — parenting, empty-nesting or retirement — with zeal, interest and the intention to spend money. Allan Zullo of Asheville, N.C., was no exception. In 1996, when the then 47-year-old Zullo learned he was a grandfather-to-be, he immediately ran to the bookstore to get more information on his impending new role. What he found was “strictly geared to that gray-haired granny,� not the energetic, young, still-working-full-time man he regarded himself to be. So Zullo and his wife Kathryn, then age 46, decided to write their own how-to book. The idea: to show just how different this new generation of grandparents is. “We're redefining the image of grandparents from the cookie-baking type to active grandparents who are in-line skating with their grandchildren,� Zullo explains. “Today's grandparents are vibrant, alive, wear spandex and do yoga. We're very proactive in wanting to be part of our grandchildren's lives.�

Say goodbye to the image of gray-haired grandparents in rocking chairs. As Baby Boomers enter this new life stage, they are adding their own twist to the idea of grandparenting. This new generation of grandparents is more youthful, more involved and has more money with which to dote on their grandkids. Today, a record 70 million Americans — about one-third of all adults — are grandparents, and the number is expected to rise to 80 million by 2010, according to Washington, D.C.-based AARP. The average age of a first-time grandparent today is 47 — the average life expectancy just a century ago. With today's life expectancy of 76, this generation of elders may have as much as 30 years of grandparenting ahead of them.

What's more, they constitute a new market for businesses to tap: With grandparents spending an average of $500 a year on their grandchildren, up from $320 in 1992, grandparents constitute an annual $35 billion market. As Boomers — the 78 million Americans between the ages of 38 and 56 — enter their prime grandparenting years, this market is bound to grow even larger.

Of course, grandparents have always spent money on their grandchildren. But how this particular generation of grandparents indulges its grandkids is likely to change, marketing experts say. There will be a new emphasis on services with an educational or instructional value, and long-term financial planning for a grandchild's education and early adulthood. Already, more than half of grandparents (52 percent) help pay for their grandchildren's education, according to a 2002 AARP nationwide survey of 800 grandparents over the age of 50. Forty-five percent help pay for living expenses and 25 percent contribute to their grandchild's dental or medical costs. Vern Bengtson, a professor of gerontology and sociology at the University of Southern California, found that among his 150 students, 1 in 5 said their grandparents were paying all or part of their tuition.

Yet despite grandparents' formidable spending power, many experts say the grandparent market remains largely underserved. “This is a profoundly untapped market,� says Ken Dychtwald, president and CEO of San Francisco-based consultancy Age Wave and author of Age Power: How the 21st Century Will Be Ruled by the New Old (Penguin/Tarcher, 2000). One reason why, according to Dychtwald, is that outdated images of grandparents cause many marketing messages to misfire. For example, although grandparents, and older people in general, are often perceived as frugal, Dychtwald says this idea actually stems from the preceding wave of grandparents, who grew up during the Depression and World War II. In contrast, this new generation of grandparents — Boomers — are not only among the wealthiest and most privileged segment of society, but they also tend to be proud of their largesse.

Last year, to better understand and predict this group's consumer behavior, SRI Consulting, a Menlo Park, Calif.-based marketing services firm, started to segment the grandparent population. SRI coined three behavior categories to describe most grandparents. The first, “traditionalists,� tend to be cautious, moralistic and patriotic, and account for the largest group of today's grandparents (54 percent), but is on the wane. As consumers, traditionalists are home-oriented, and prefer tried-and-true brands. The second group, “makers,� (15 percent) is much more active than the first group, and is more likely to be independent and anti-authority. The third group, “achievers,� (9 percent) is more status-oriented. They value interpersonal relationships and their buying behavior often relies on peer influence.

As Boomers start entering grandparenthood in droves, SRI sees a fourth group on the rise — “thinkers.� Currently 16 percent of the grandparent population, they are more intellectually curious, active and globally oriented, and will start to replace the other three groups as Baby Boomers begin to dominate the grandparent population. This new group is driven by principles and doing what's right. They like to acquire information and are thoughtful in their purchasing behavior. They research products before buying them.

“The primary difference with the new wave of grandparents is they'll have a lot more resources — not just education and money, but also self-confidence, intellectualism and global awareness — that will make them more open-minded and expressive in the marketplace,� says SRI senior consultant Kathy Whitehouse. Whereas in the past a grandparent might buy a toy based on functionality or durability, she says that the new grandparent will research the comparative merits of a toy and make a purchase based on its educational value, environmental quality and ability to engage.

Such changes are likely to be even more pronounced with the next wave of grandmothers — which includes the first generation of Boomer women to have their own careers. Women coming of grandmother age are more likely to be college-educated, to be employed outside the home, divorced or remarried and to have a sense of themselves as independent agents, according to Jean Giles-Sims, a sociologist at Texas Christian University and the founder of www.grammystories.com. Given the fact that grandparents are disproportionately female because of the higher mortality rate for men, such changes are significant. Giles-Sims is working on a new book, Becoming Grammy: Today's Grandmothers Redefining the Old Stereotypes, to address the impact of this transformation. “I call them ‘empowered,’� she says. “And they've got much more money.�

Take JoAnn Miller, a 64-year-old book editor in New York, and grandmother of three. Miller says the big difference between her generation and previous ones is that “we've got lives of our own.� Miller, who spends about $4,000 a year on her grandchildren, says that her full-time job means that she's “not necessarily available to baby-sit.�

Even grandmothers who don't work are different from previous generations, according to Giles-Sims. They're more active in their community, they travel, they volunteer. Many women between the ages of 40 and 65 approach grandparenting intent on making up for the mistakes they made with their own children during the 1970s. They see this as an opportunity to do things differently, she says.

Sara Schotland, 53, an attorney in Washington, D.C., says that her career path short-changed her on the full experience of parenting, so she was especially excited about the birth of her first granddaughter last year. She views grandparenting as “an opportunity to devote more time than I had as a parent.� A third-year law student when she had her own daughter, and a young associate by the time she had her son, Schotland devotes time to her grandchildren that she didn't have for her children.

“I would never leave the office except in an emergency,� she says. “But today, even though I'm still an active partner in my firm, the priority, time and attention for my granddaughter is without limit. I've left the office at 3 p.m. at least 10 times this year to tend to her needs.�

Indeed, grandparents today tend to be deeply involved in their grandkids' lives. According to a November 2001 AARP national survey of 823 grandparents over the age of 50, 78 percent have seen a grandchild in the past month or talked with them over the phone — and 65 percent say they speak at least once a week, up from 45 percent in a similar 1999 poll. In both surveys, approximately 85 percent said they shared a meal with their grandchild during the past six months; an equal number purchased their grandchild a gift; and more than half (53 percent) sent a greeting card in the past 30 days. Only 12 percent said they see or talk on the phone with their grandchildren every few months or less.

Summer Kircher will fly practically anywhere for her grandchildren. A 55-year-old part-time garden designer from Colorado Springs, Colo., the grandmother of three (with a fourth on the way) drives 70 miles to Denver every week to see her granddaughter and last year flew to Iowa six times to visit her son's two boys. Recently, Kircher even took one grandchild to Italy. “I'm not a baby-sitter,� Kircher stresses. “I like to do things with them. I envision our activities as becoming even more experiential as they get older.�

Grandfathers are no less involved than grandmothers. According to Bengtson at the University of Southern California, grandparenting is becoming much more important to American males. As men retire and live longer, Bengtson says, they're discovering not only their own children, but their grandchildren.

Whereas spending time together once revolved around home visits, today, multigenerational groups are more likely to go to a sporting event, take an educational day trip or participate in a physical activity. Boomer grandparents are often looking for the same kinds of experiences they have sought throughout their lives: They want structured activities and organized events.

“We found that grandparents, especially Boomers, rather than buy things for their grandkids to do on their own, want to buy them experiences that they can do together,� says Zullo, co-author of The Nanas and the Papas: A Boomers' Guide to Grandparenting (Andrews McNeel, 1998). “They want to travel together, go to camp together.�

To be sure, not all of today's grandparents conform to this new portrayal of grandparenting. Experts hastily point out that the grandparent population is still diverse. Many grandparents continue to follow the traditional model. In addition to the larger shift towards more engaged grandparenting, Giles-Sims has uncovered a simultaneous smaller trend towards more remote grandparenting, cut off either by distance or conflict with children.

Charles Schewe, a principal of Lifestage Matrix, a Lafayette, Calif.-based market research firm and author of Defining Markets-Defining Moments (Hungry Minds Press, 2002), says the impact of Boomers will veer in a totally different direction. According to Schewe, the new Boomer grandparents will infuse their “Me Generation� mentality onto their grandchildren. “They'll be the distant grandparents,� Schewe says. While they will still spend money, Schewe believes “they'll feel a desire to care for their grandchildren, but won't want to spend the energy and effort necessary to be a nurturing grandparent.�

Yet the growth of this market seems not only certain, but set to accelerate as America becomes increasingly multigenerational. As lifespans continuing to lengthen — and the definition of family takes on expanded meaning — we are likely to see households of up to four generations. Of 823 respondents to a 2002 AARP survey, one-fourth of those polled also had great-grandchildren. According to Bengtson, in the past 30 years, there has been a ten-fold increase in the number of great-grandparents who are actively involved in the lives of their adolescent and young adult great-grandchildren.

“You're going to see a huge multiplication of the numbers of great-grandparents,� says Dychtwald, who cites the growth of people becoming great-grandparents by the age of 60. Looks like we'll see greater grandparents in more ways than one.

Buy Me That!

Most grandparents (87 percent) are buying clothes for their grandchildren this year.

ITEMS PURCHASED FOR GRANDCHILDREN WITHIN THE PAST 12 MONTHS:

1999 2002
Clothing 74% 87%
Books 60% 80%
Fun food/snack food/fast food n/a 78%
Educational toys (not for computer) 29% n/a
Any other toys 38% 76%
Magazines 23% 32%
Music, CDs, tapes n/a 48%
Videos, DVDs n/a 45%
Jewelry n/a 37%
Video games n/a 31%
Computer software 18% 28%
Other electronic devices (radios, CD players) n/a 28%
Tuition/day care 12% n/a
Camp 11% n/a
Source: AARP

High-Gear Grannies

Whether today's grandparents are more active or they just feel they have strength in numbers, the number of nanas and papas who engage in many activities that are not thought of as the “typical� for grandparents has more than doubled in the past 13 years. Specifically, New York City-based market research firm Mediamark Research, Inc. (MRI) reports that the number of grandparents of children under age 18 in the U.S. who play video games rose 208 percent between 1988 and 2001, the number who do aerobics grew 126 percent during the same time. Meanwhile, the number of grandparents who collect stamps, play cards and refinish furniture has risen at a much slower rate.

GRANDPARENTS (IN MILLIONS)
1988 2001 PERCENT INCREASE
Activity done in the past year:
Weightlift 603 2,462 308%
Attend music and dance performances 3,271 10,703 227%
Play basketball 605 1,967 225%
Play video games 1,083 3,330 208%
Backpack/hike 744 1,904 156%
Aerobic exercise 1,472 3,323 126%
Collect stamps 1,344 1,999 49%
Play cards 9,782 12,009 23%
Refinish furniture 1,982 2,237 13%
Go on a picnic 6,457 6,725 4%
Source: Mediamark Research, Inc. (MRI) 1988, 2001

Dr. Spock for Grandparents

More than half (55 percent) of grandparents want more information on financing their grandchild's education.

PERCENT OF GRANDPARENTS WHO SAY INFORMATION ON THE FOLLOWING TOPICS WOULD BE USEFUL:

VERY USEFUL SOMEWHAT USEFUL
Safety tips 34% 27%
Selecting age-appropriate books 32% 27%
Understanding teaching methods 33% 25%
Financing grandchild's education 29% 26%
Setting up savings or investments 27% 28%
Talking about sensitive topics 17% 37%
How to send email 24% 16%
Source: AARP, 1999

Grandma and Grandpa

They have on average five grandchildren and great-grandchildren.

THEIR WORK LIVES THEIR GRANDCHILDREN
56% are retired 58% have grandchildren

age 3 or younger
23% work full time 57% have grandchildren

ages 4-7
8% work part time 24% have great-grandchildren

ages 4-7
7% are homemakers 59% have grandchildren

ages 8-12
30% have incomes of $50K plus 24% have a step-grandchild
Source: AARP, 1999

Grandma, I'm Home!

A growing number of households are multigenerational, including grandparents, their children and grandchildren.

More grandparents are living with their grandchildren in multigenerational household settings. According to the Census Bureau, as of 2000, there were a total of 3.9 million multigenerational households in the U.S., making up 3.7 percent of the total population. Some 65 percent of those households consist of grandparents, their child or children and grandchildren. The remainder are households in which the middle generation acts as the head of household or the grandchild's generation serves as the head of household. “Grandparents today are more likely to deal with blended families. We're more likely to have parents who are still alive, so we've got four generations to contend with. And we're still working," says author Allan Zullo, who became a grandfather in his 40s.

States with a comparatively large percentage of multigenerational households include Hawaii, where 8.2 percent of all households are multigenerational. Puerto Rico also has a high rate (7.4 percent), particularly when compared with states such as North Dakota, where multigenerational households account for about 1 percent of the total number of households. Multigenerational households are also more likely to exist in areas heavily populated by new immigrants, areas with high out-of-wedlock birth rates where women often live with their parent(s) and areas with housing shortages or high living costs, according to demographer Lynne Casper, author of Continuity and Change in the American Family (Sage Publications, 2002).

The number of households maintained by a grandparent has also grown dramatically — to 3.9 million in 1998, from 2.2 million in 1970, an increase of 76 percent in 28 years. In a 1999 AARP national survey of 800 grandparents over age 50, 11 percent of grandparents identified themselves as caregivers, with 8 percent providing day care on a regular basis and 3 percent raising a grandchild by themselves.

According to a 1998 analysis by the Census Bureau, there are five main types of grandparent-maintained households: with both grandparents, and one or both parents present (34 percent of the total); both grandparents, no parents present (17 percent); grandmother only, some parents present (29 percent); grandmother only (14 percent); and grandfather only (6 percent). While the growth in the number of families with one parent and both grandparents present dominated the 1980s, since 1990, the most significant growth has been in households consisting of grandchildren and grandparents only, with neither parent present.

Certain characteristics apply to grandparent-headed households. As of 1997, half of the children living with grandparents were under age 6. Grandchildren living with their grandmothers tend to be black and live in urban centers. More than one-fourth of grandparent-raised (with either or both grandparents) children (27 percent) live in poverty; 63 percent of those living with a grandmother alone are impoverished. Grandparents raising their grandchildren are more likely to work: 72 percent of grandfathers and 56 percent of grandmothers are employed, compared with 33 percent and 24 percent respectively in parent-maintained homes.

A host of possible reasons can account for the increase in both multigenerational households and households in which the grandparents act as primary caregivers. The census report cites drug abuse among parents, teen pregnancy, divorce, the rise of single-parent households, mental and physical illness, AIDS, child abuse and imprisonment as the leading causes. Vern Bengtson, professor of gerontology and sociology at the University of Southern California, also attributes this growth to new laws on child endangerment, which have removed children from abusive-parent homes. He says there are pluses to these multigenerational households. “Multigenerational families are becoming more important for social support,� he says. “And grandchildren are also increasingly taking care of both their grandparents and great-grandparents.�

— PP

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