Age And Marketing: How The Increasing Elderly Population Is Affecting America’s Spending Habits
America is a consumerist nation; our businesses rely heavily on specific marketing strategies that target certain demographics. Although young people are the most popular targets, they are quickly being outnumbered. By 2050, the 85+ age group will total 5% of the entire U.S. population. Before we can make changes that cater to an aging population’s spending habits, we need to understand how older adults shop.
Changes In Financial Focus
Studies have found that spending habits markedly shift once Americans hit the age of 45. This age describes a peak in household spending: on average, those between 45 and 54 spend around $56,781 annually on a variety of goods and services, from travel expenses to mortgage payments. Compare that to the $33,303 that Americans over the age of 75 spend each year, and you’ve got a clear disparity.
Whereas younger people are more likely to spend money on entertainment and so-called “frivolous” purchases, older adults focus almost all of their money on healthcare expenses. They spend more on prescription drugs and medicines, doctor’s appointments, and nursing home care than any other demographic. When you consider the average American spends $1,800 annually on clothing, there’s a clear difference in focus. Because of this focus, it can be hard to reach out to them as a group if you aren’t offering such services or products. With their rising numbers, however, businesses across the country are going to have to learn to adapt.
Appealing To An Aging Crowd
It’s easy to believe that older demographics are set in their ways and resistant to new ideas or products, but that’s an obvious generalization; as an article in Forbes wrote, “Many firms see the older marketplace not in shades of gray but medical blue and hospital beige.” With potentially trillions of dollars sitting untapped in the 50+ market, meeting their specific needs is a worthwhile risk — and, fortunately, it’s easier than you’d think.
- Build campaigns that drive calls. Approximately 70% of buying experiences are based on how the customer feels they are being treated. For younger Americans, this is mainly focused on online and mobile experiences. To reach the elderly population, you’ll want to focus on phone calls; 36% of those aged over 55 use the internet for research but prefer to talk to someone on the phone before they buy, and almost 60% of those aged over 55 are more likely to return to a store or brand after speaking with them on the phone. When you spend time on campaigns that driver older consumers to pick up the phone, you’re more likely to produce better conversions and higher order values.
- Maintain a positive image. Older adults often have a lot more time on their hands than their younger counterparts. This means that they’ll be more likely to visit your brick-and-mortar location, or research your business online. If your image — both in terms of a physical storefront or negative customer reviews — is too sullied, it can discourage the older generations from ever coming back. With graffiti negatively affecting property values by as much as 15%, it’s easy to imagine how big of an impact it could have on customer opinion.
An aging population could be boon for businesses everywhere, provided they’re ready and equipped to deal with their unique needs. By taking the right steps, you can help your company tap into that massive market and serve an ever-expanding demographic.