Bright Spot: Marketing To Older Consumers Pays Off

Bright Spot: Marketing To Older Consumers Pays Off

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Consumer electronics are not just for young people; they have broad consumer appeal. While many companies involved in the consumer technology industries focus on the coveted 18- to 34-year-old age group, they shouldn’t dismiss the overlooked segment of older Americans.  

The number of consumers ages 50 and over will increase from 94 million in 2008 to about 119 million in 2020, a 26-percent increase, according to the U.S. Census Bureau. They already represent 31 percent of the U.S. population, and by 2020 will increase to 35 percent. Consumers ages 45 to 64 also have a mean income 26 percent higher than that of the overall population (ages 15 and older).

This older population is sizable both in numbers and income, making them an important market segment for any industry, including consumer technologies. Let’s explore how older Americans have embraced technology and how their shopping activity for technology products differs (if at all) from other consumer segments.

According to the recent study, "Greying Gadgets: How Older Americans Shop for and Use Consumer Electronics" conducted jointly by CEA and TNS Compete, older Americans (those 50 and above) are quite comfortable shopping for consumer electronics. Despite the fact that many older Americans were born well before the proliferation of technologies, such as cell phones, DVRs and the Internet, 62 percent of 70-somethings, 68 percent of 60-somethings and 78 percent of 50-somethings feel comfortable or very comfortable purchasing consumer electronics.

Technology has also helped older Americans in their shopping process itself. As one older woman in her 80s reported via in-person interview for the study, "I love my computer. I use it to do research… and to keep in touch with my friends and family."

Another interviewee explained his reasons for frequently shopping on the Amazon website,  "I usually go to Amazon because I have an account set-up with Amazon. It’s very easy to order. It’s pain free…

What are older Americans planning on purchasing?

With challenging economic conditions on the forefront of most consumers’ minds, 2009 may shape up to be an uncertain year for most retail sectors. Still, over half of consumers under the age of 70 plan to purchase at least one consumer electronics product over the next twelve months.

Consumers of all ages basically agree on which three consumer electronics they would most likely purchase in 2009: HDTV, laptop PC and cell phone. Older Americans are less likely to purchase video games, but more likely to consider the purchase of a GPS device or desktop PC in the next year than their younger counterparts. Given economic concerns, marketers need to convince consumers why they should spend their hard earned income on one product over another that may also be on the consumer’s "wish list."

Messaging convergence or dual-purpose functionality could be effective. For example, some recent cell phones have been marketed as a replacement for a digital camera. Samsung’s Behold and Motorola’s Motozine ZN5 both offer five megapixel cameras and have been promoting that feature in advertising campaigns.

That type of "get more for your money" messaging could go a long way in getting past any fear of spending in 2009. However, marketers must be careful not to overwhelm older shoppers in the process. Sixty-four percent of 60-somethings reported that they get frustrated with technology products because they have "too many features". Fifty-two percent also said that "confusing terminology" was a source of frustration.

Older Americans are a unique group, and have taken interest in shopping for consumer technologies. With their population and economic influence increasing over the next ten years, marketers are advised to pay attention to this segment of consumer. With the right products and shopping experience tailored to older Americans, this segment could be a bright spot in an otherwise uncertain 2009 and beyond.

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