Savvy e-commerce retailers are cashing in on the silver pound and targeting older consumers in the United Kingdom.
Little wonder, after the latest Office for National Statistics figures, published in August, revealed that for the first time more than half (54 per cent) of adults aged 65 and over are shopping online. This represents a stunning rise as a decade ago only one in five UK pensioners purchased goods and services on the internet.
There are myriad reasons why the baby-boomer generation, and above, are switching over to online shopping. The crux is that the same combination of convenience and lower prices offered by online stores, which has decimated the high street, is becoming increasingly irresistible.
“The rate of online shoppers aged 65 or older will only grow,” says Linda Zou, principal at Boston Consulting Group. “Younger baby boomers have been using the internet at work as long as, or longer than, younger generations. Although slower to adopt shopping digitally, they have long used technology to connect with family members. It was only a matter of time before that confidence transferred to browsing and buying online.”
To capitalise, retailers need to think about how they communicate with older shoppers
Mike Webster, senior vice president and general manager of Oracle Retail, agrees. “As the proliferation of accessible online shopping and dwindling storefronts on the high street continues, it will attract greater numbers from all demographics,” he says. “To capitalise, retailers need to think about how they communicate with older shoppers.”
Need for speed in sorting shopping issues
Oracle Retail’s Setting the Bar report, released in October, provides tips for those targeting older consumers. “Our research shows 72 per cent of more senior consumers expect retailers to communicate immediately following issues with products they have bought,” says Mr Webster. “Brands that provide real-time service to their customers will have greater success with this demographic. Retailers have to decide what communication channels to focus on, from chatbots to call centres.”
Moira Clark, professor of strategic marketing at Henley Business School, recommends easy-to-use and low-effort experiences when targeting older consumers. “Less information per page is helpful,” she says. “Trying to cram in too much information results in a cluttered, confusing experience for older users.”
Similarly, Justin Smith, managing consultant at Capgemini Invent, warns ecommerce retailers not to overcomplicate things for pensioners. “Delivering a first-class experience also comes down to simplicity,” he says. “In the age of limitless choice at the click of a button, the online world can seem overwhelming for an older generation. Retailers that can help break down this barrier will have a much easier time attracting and converting these customers.”
Professor Clark stresses that targeting older consumers is worthwhile because they splash out. To convert sales, however, generating trust is imperative. “Those aged 65 and above have proportionally more money to spend, but are more careful about how they spend it. User reviews are essential to building confidence in the purchase process, from searching for products to simple and effective return and refund options.”
Personalisation key when targeting older consumers
Targeting older consumers, through personalised offerings, made possible thanks to advances in data analytics and artificial intelligence, will provide a competitive advantage, says Vincent Reboul, managing director of Hitachi Capital Consumer Finance. Bricks-and-mortar stores remain important, though.
“The growth opportunity for retailers comes from adopting a truly omnichannel approach by balancing online and in-store services, including point-of-sale finance, at every stage of the customer journey. Matching demand is essential to create a seamless experience,” he says.
Ryan Deluchi, managing director of MOFILM, which works with Diageo and Unilever on creating targeted content, points out that Airbnb’s fastest-growing segment is the over-60s, with guest numbers growing 66 per cent between 2017 and 2018. Additionally, since January 2015, almost a third of Amazon Echo sales (31 per cent) have been driven by baby boomers, which is more than their millennial counterparts.
“These two brands are often labelled as millennial focused. In reality, they appeal to a certain mindset around convenience and freedom that is just as likely to be found in the over-60s as it is the under-35s,” he says.
Mr Deluchi believes that focusing on attitudes rather than age allows brands to remain relevant across generations. “The key for brands,” he adds, “is to look for a common emotional need that is shared across the generations, rather than trying to identify what makes them different.”