In Trends

5 things to know about affluent older customers

affluent-older-customers

Retailers are investing millions of dollars in a bid to capture the digital wallet of the millennial shopper, yet older consumers appear to spend more time, and potentially money, online. Here’s what you need to know about them:

1. Half spend at least 11 hours/week online

Specifically, nearly half (49%) of those aged 52 to 70 spend at least 11 hours a week online, according to the 2015 State of the User Experience report from Limelight Networks, a content-delivery specialist. That compares with 42% of millennials (19- to 35-year-olds).

A lot of that online time is spent spending. Boomers ranked researching and shopping as the third and fourth most important online activities (following news consumption and social media), according to the report. Millennials ranked shopping as fifth most important.

Boomers generate more than 51% of the spending in the United States (and have a total annual economic activity of roughly $7.6 trillion, according to AARP). Regardless of where or how that 51% of spending occurs, the fact is older consumers represent a sizeable and potentially lucrative long-term market base for digital retail.

2. Like them, but don’t lump them

Baby boomers account for roughly 75 million people spanning nearly three decades. This means the youngest boomers likely shop online differently than their 70-year-old counterparts. Some still have kids at home, for example. Online apps, such as loyalty apps, can be useful tools to peg the life stage of individual boomers.

3. Know how they spend time, not money

Because many boomers are approaching retirement and more likely to be (or soon be) empty nesters, they spend their time in markedly different ways. This affects how they spend their money. For instance, boomers purchase half of the computers and two-thirds of the new cars sold annually, according to Bloomberg Business Week. They also spend a lot of money on their pets.

4. Understand their bread is rising

Baby boomers are expected to inherit $8.4 trillion by 2030, according to research by the Center for Retirement Research at Boston College. This means their spending power is likely going to escalate, and possibly in windfall ways. The online retail marketing to this group should therefore be aspirational, geared toward lifetime-moment purchases such as travel, artwork, special jewellery and home improvements.

5. Prepare for a long-term relationship

Boomers are going to be with us for a while, so online experiences should evolve with a mind toward their ageing needs. Older consumers may be more likely to enrol in subscription services for the convenience, for example. That’s a window for meal-kit suppliers, including supermarkets, as well as online providers of razors and eyewear.

Boomers may prefer to invest in smart-home devices to help manage heating, cooling and lighting (Amazon’s been on top of this with its Echo devices). Or, very practically, they’ll want more comfortable shoes. An online shoe retailer can nail this need with videos and product descriptions categorised by the shopper’s gait, foot type and comfort issues.  

Baby boomers are among the longest-studied demographics in retail. It would be a mistake for merchants to allow the long shadow of millennials to blot out the boomers’ complex value. After all, even if the average 54-year-old is not yet ready for extra-comfortable walking shoes, her mother may be.

(Source: Forbes)

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