Every day the senior consumer market grows while other age-specific markets stay static or decrease. In 2014/2015, the growth rate of the population aged 65 years and older was 3.5%, approximately four times the growth rate of the total population.
Half the adult population is over the age of 50. Yet only 15% of marketing dollars are allocated to reach this huge consumer group.
While businesses may find it difficult to shift their target, these consumers are rewriting the buyer’s manual.
For example, in Canada, buyers 50 years of age and older make up 51% of new car purchases. Canadians 60 and over are the largest group of new car buyers, purchasing 3 out of every 10 vehicles.*
Businesses often think this group of consumers isn’t keeping up with the times and changing technology. In travel purchases, the 50+ market is responsible for over 40% of all online expenditures, 26% more than any other age category. 80% of Boomer travelers go online to plan travel, spending between 30-36 hours a year researching travel. **
Businesses complain that this consumer group is stingy. Again, looking at the travel industry, the 50+ group are 45% more likely than younger travelers to spend $5000+ per year on domestic travel and 75% more likely to spend $8,000 per year on foreign vacations. Boomers and older travelers account for 63% of all cruise travel.** Luxury travel and comforts of life are definitely what this consumer group wants and is willing to pay for.
Businesses that fail to consider the buying power and buying trends of this lucrative consumer group are going to miss a REALLY BIG BOAT. Those that adjust to the changing marketplace, will find a healthy, receptive and growing customer base that will serve them well for the next 20-30 years as the Boomer generation explodes onto the 65+ scene.
Boomers take their buying seriously. They are loyal when the service is good and the products are quality. They are ready and willing to switch when the product or service falls below standard. They buy on impulse to soothe a desire to stay with the trends and satisfy urges they delayed from earlier in life. Luxury and uniqueness appeal to them, and they are prepared to pay the price for this.
Some businesses claim they market to a younger client because the “purchasing lifespan” is longer, but they fail to factor in loyalty, increasing longevity, and higher disposable income .
For example, mature customers have a longer expected lifespan and are staying healthier and more engaged than any other generation before them. Yes, the “senior-senior” may decrease their spending in some areas for lack of need or interest, but this decrease is often offset by larger purchases in another industry. For example, a vehicle may cease to be a necessity after a certain age, but alternate mobility products, like a motorized scooter, may take a sharp increase.
Loyalty is another differentiating marker that businesses don’t consider. Young consumers are into trying new things, but they don’t necessarily align themselves with one store or brand. There is a fortune spent among competitors to grab and hold this consumers’ attention. Older consumers appreciate when they are treated well and aren’t as inclined to take their business elsewhere on a whim. Unfortunately, marketing dollars are poured into trying to grab and hold clients whose eye is on the latest fad, all the while dismissing clients who appreciate relationship over buzz.
Seniors hold over 70% of Canada’s wealth. The majority of homeowners say they have paid off their mortgage, leaving them with higher disposable income than any other age group.
The point of this article is not to sway businesses from marketing to the younger demographic. Rather, it is asking businesses to consider the allocation of their marketing dollars into a more even distribution across the age groups. If none or a very small portion of your marketing budget is directed at the mature demographic, you may want to look at the ways and means to tap into this lucrative consumer group.
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*Chris Travell, Vice-President, strategic consulting at Maritz Research, a Toronto-area based marketing research firm (The Windsor Star – Grace Macaluso – September 16, 2013)
**Mark Bradbury, www.mediapost.com October 3, 2013