As noted in part one of this article, today's seniors are a lucrative and growing market for online merchants. Yet, as attractive as the age 65-plus crowd is, analysts point to a still more lucrative group of older shoppers: the aging Baby Boomers.
Broadly defined, the older Boomer sector consists of people who are age 50 to 64. They will be a pioneering group: they'll be the first generation of seniors who are truly comfortable with online life.
While many of today's seniors didn't use the Internet at work, the aging Boomers epitomize the tech-savvy consumer. "The computer and the Net has been so integrated into the workplace, in five years these near-seniors are going to bring all this experience of the Internet with them into retirement age," notes Forrester analyst Lynne Bishop.
Boomers are online in a major way and they are very comfortable in the online environment, regularly purchasing goods and services, making them a merchant's dream. Smart companies will reach out to seniors online.
The 65-plus crowd is very frugal and cautious they are more likely to hit a big-box discount store and buy bulk toilet paper to save a few dollars. In contrast, the older Boomers have a greater emphasis on self-gratification, according to some experts. They're also much more comfortable shopping online.
If a marketer doesn't have an online strategy to reach these aging boomers, they will need one very soon.
10,000 A Day for Ten Years
Some estimates place the total size of the market of people aged 50 to 64 at roughly at 36.7 million and growing quickly. The over-50 population is increasing faster than the under-50 population, according to the U.S. Census Bureau. Every day for the next ten years, more than 10,000 Boomers will turn age 50.
They are an affluent bunch. The older boomer sector has an annual spending level of $1 trillion, and these households spend a hefty average sum of $46,160, based on research by MetLife. An AARP report points out that while mature Americans make up 35 percent of the population, they have 77 percent of the financial assets and 57 percent of the discretionary income.
About two thirds of older Boomers are online (as opposed to about one quarter of people over age 65). Looked at another way, some experts estimate that nearly 20 percent of all people using the Internet fall into the 50-to-64 age group, and that this percentage will bump up to 21.6 percent by 2008.
In comparison to today's seniors, some experts estimate the aging Boomers are three times more likely to go online and 50 percent more likely to use broadband. Some research indicates that broadband usage correlates with increased online shopping.
The older boomers also use the Internet to make more travel reservations, read the news, bank online and especially to manage their health.
Today's seniors are reluctant to buy online from a site they haven't heard of; if they don't know a business offline it won't get their dollars online. But with the age 50-to 64-year olds, there's a mentality of wanting to try new things and being adventurous. The fact that an online vendor is newly launched is no deterrent for them. Have browser, will travel.
What They're Shopping For
The three most common online activities for the older Boomer include checking weather (79 percent), looking for information about a hobby or interest (78 percent), and buying a product (71 percent), based on January 2005 data from the Pew Internet & American Life Project.
Popular e-commerce activities include buying travel reservations (68 percent), checking financial information like stock quotes or mortgage rates (48 percent) and paying bills (33 percent).
Compared to the average person, the 50-to-64 year-old is more likely to visit the five following categories, in this order: pharmacy, online trading, coupons, Lotto/sweepstakes and consumer goods based on comScore Media Metrix figures from April 2005.
The research firm Veritas asked Net shoppers in the 50-to-64 age group which products they had purchased online. The top categories were airline tickets (52 percent), books (49 percent), hotel reservations (43 percent), gifts over $50 (36 percent), home electronics (33 percent), CDs (28 percent), toys (22 percent), DVDs (20 percent), health and beauty products (18 percent) and home furnishings (12 percent). Interestingly, apparel, a popular item for younger online shoppers, does not show up in this list.
Reaching the Older Boomer Market
Matt Thornhill is president of the Boomer Project, a market research firm that specializes in marketing to consumers over age 50. He identifies key strategies for reaching these older consumers.
First, in terms of Web design, he endorses the design principles that were detailed in part one of this article. That is, it's best to use a larger font size (or at least a flexible font size) and to emphasize Web page readability. "Things like color and contrast start applying people start wearing 'cheaters' [reading glasses] as early as their mid 40s," he notes.
He also recommends:
- Use bolder colors rather than pastel colors Based on Thornhill's research, older boomers respond more to ads with bolder colors.
- Put your message in terms of a positive Researchers at Stanford University found that the older a consumer is, the more likely he will literally ignore negative messages, Thornhill says. So marketers, instead of presenting a message like "Don't forget to take your pill every night," will better reach older surfers with an approach like "Taking your pill every night is good for you."
- Use an emotion-based rather than a fact-based appeal Of course this strategy is true for all consumers emotion is always more persuasive than logic. Yet it is even truer for older consumers, Thornhill says. "When you're young and you're making a purchase decision, you have to go through a reasoned thought process. But by the time you're 55, you've done that about eight billion times it's like, 'I don't have to think about it, I know what works for me.'"
- Market to their 'life stage' rather than their age "When you ask Boomers 'how old do you feel?' their answer averages about 14 years younger than they are," Thornhill says. But this doesn't mean a 55-year-old should be marketed to like a 40-year-old - Boomers often don't follow traditional age-related behavior patterns. "Boomer haven't followed in their parents' footsteps," Thornhill says. "They keep recreating themselves every three to five years."
As an example, he notes that both David Letterman and Billy Crystal are 58 years old. Yet Crystal has a 2-year-old granddaughter while Letterman has a less than 2-year-old son. "So they're the same age, but they're in completely different life stages," he says.
Thornhill notes that the classic 'life stages' categories in which to target older boomers include 'parent,' 'grandparent,' or, most typically, 'empty nester.'
Many other experts, who point out that merchants hoping to attract aging boomers must be aware that these individuals are in a transition period in their lives, echo this point. As Boomers near the end of their traditional working years, they're looking at the next step whether retirement or moving on to a new career. A recent print ad by Merrill Lynch reflects this transitional state. Its headline is: "You live differently now."
The CEO of the AARP, William D. Novelli, gave a speech to the AARP in which he summed it up: "When we ask Boomers how they think of their retirement versus their parents', they say they will need more money, will be more self-indulgent, will be in better health and will live longer in retirement. In other words, they're not going to be stuffing those earnings inside their mattresses, they're going to continue being active consumers."
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