One of the chronic negative features of our economy these days appears to be sluggish consumer interest. Retailers point to online purchases from overseas and cheap imports. They worry about job losses around the country and fear further reductions from tough budget cutting measures.
Part of the answer to these real concerns may lie in their own hands. Are retailers of goods and services in Australia wasting business opportunities because of widespread ageist stereotypes?
Retailers very often overlook the huge potential of older consumers, those over 55s and over 65s who have money to spend and the desire to spend it. Our research at the Australian Human Rights Commission shows that most businesses just forget about our better off older citizens. While the over 65s constitute 14% of the population (and the fastest growing demographic) they feature in only 4.7% of advertisements and even here are targeted for only a limited range of products.
Plenty of older people on comfortable incomes report what I, myself, have experienced. For many older shoppers, youth obsessed marketing, advertising, store fit-out and service orientation translates into another message – we don’t want you as our customer.
Another relevant finding from our research on age stereotypes was this: a common reaction to the shopping experience for older people was a feeling of invisibility. Invisible customers don’t buy things.
The beliefs that all older people are too poor to spend, too inflexible or brand loyal to change their purchasing behaviour, or too disengaged with the modern world to buy new or modern products and services, are as widespread as they are wrong.
Recent data from NATSEM found that these days the income levels of the majority of people over 65 classified them as middle class. They found that the percentage of older people in the middle income bracket continues to increase. The 2nd Annual Sentiment Index, released by National Seniors last week, reported that around 65% of seniors felt they had financial wellbeing.
Australian Statistics from 2011 show that seniors hold over 40% of the nation’s assets. Couples between 50 and 70 have the highest median net worth: $900.000, while singles between 30 and 40 have the lowest at $50,000.
Consumer behaviour information from around the globe shows that older consumers are spending more on themselves instead of saving it up for their heirs. We find that a large proportion of this spending is on recreation, culture and travel. People aged over 60 spend more on food and beverages than younger people.
Older people shop more frequently, tend to be less price sensitive and value quality above anything else, buying fewer items but spending more per item.
Increasing numbers of older consumers are technology friendly. They see technology as an important part of their lives and a great many are online. This has been taken seriously by global e-retailer, Amazon. It launched a sub-site in 2013 dedicated to over 50s.
My point is that just as a significant part of the solution to the skills shortage crisis can be found in the ranks of competent older people who want to keep working, older people may well hold part of the solution to the consumption shortfalls.
All retailers need to do is use the research and change their approach. They need to discard their ageist view of older people. Of course, they will always want to target the new markets represented by younger people. But, as well, they should get rid of the false stereotypes of older people and follow the money.
I must stress that we do have older age poverty in Australia and it is unacceptable. But at the same time we have plenty of seniors who would be in the market for a wide range of products and services if only the producers acknowledged their existence and their preferences. Smart operators in travel, financial services and even parts of real estate are already benefiting. But what about the rest?
Negative stereotypes don’t only discriminate against older people, they cost retailers a significant market share. It is surely time to change all this.