Don’t ignore older consumers

In February, the spending index for those age 65 and older rose above that of 45- to 64-year-olds, and was just 3.2 percentage points lower than the youngest group, which typically has the highest spending momentum.

Consumers age 65 and over have increased their spending more slowly than those in other age groups for most of the past two years, according to Visa Inc.’s index of credit and debit card “spending momentum,” which measures the number of people boosting or cutting their spending compared with the long-term trend, from a year before.

The index for the older group was more than 6 percentage points lower on average than spending by the group’s age 45 to 64 years old and 25 to 44 years old from March 2020 through January 2022.

We have this big [older] demographic, their wealth went up tremendously these past two years. U.S. household wealth—which includes assets such as real estate and equities minus debt—rose 38.1% among people aged over 70 from the first quarter of 2020 through the final quarter of 2021, according to the Federal Reserve.

People 65 and up have a global spending power of about $8.5 trillion, a number that is expected to grow to just under $15 trillion in the next ten years. … Without making a direct appeal to people in their twilight years, these businesses could be missing out big time, and there is data to prove it.

The Brookings Institute article explains that seniors are significant players in the economy: There are currently 750 million seniors in the world, and by 2030, there will be one billion. Seniors in the consumer class are expected to grow by as much as 66% and are the wealthiest age group in the world (alongside older professionals aged 45-64 years).

There are many myths about marketing to older people, and popular perception can be that older people only buy from certain brands, are resistant to change, and aren’t active online. Tech purchases among older adults are on the rise, with 51% of people over 55 had bought a smartphone, smart device, or wearable device within the last year. The days of helping our grandparents reset the modem may not be entirely past, but the truth is that seniors have adapted well to new technology and are capable users.

As boomers stay in the workplace longer, their spending habits also appear to be changing. For one, they’re making more purchases online via computers, smartphones, and other devices, suggesting they are visiting traditional stores and using a physical card less frequently. This card-not-present (CNP) transactions now represent 40 percent of credit spending on Visa for consumers aged 60 to 69, which is only slightly lower than the overall average CNP of 40.3 percent.

Older consumers are less concerned about price and more concerned about affordability and value, which is an important distinction for marketers who are crafting messaging. After all, the customer you want is the one with the power to buy, regardless of whether he or she will use the right hashtag after his or her purchase.

About richmeyer

Rich is a passionate marketer who is able to quickly understand what turns a prospect into a customer. He challenges the status quo and always asks "what can we do better"? He knows how to take analytics and turn them into opportunities and he is a great communicator.

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