THE GROWING MARKET POWER OF 60+

Transcription

1 THE GROWING MARKET POWER OF 60+ and HOW YOU CAN CAPITALIZE BY SERVING THIS MARKET MORE EFFECTIVELY Prepared for delivery at the Beyond the Boomers conference Chicago, Illinois October 20, 2006 Linda L. Fisher, Ph.D. Director, National Member Research, AARP

2 AARP s Mission AARP is dedicated to enhancing quality of life for all as we age. We lead positive social change and deliver value to members through information, advocacy and service.

3 60 and Beyond: Boomers Plus

4 Three Messages 60+ is already a powerful market even without most boomers. Boomers will expand the market size and dollars. Boomers will change the nature of the market and what you have to do to serve it. Boomers at 60 are heralds of the future.

5 The Market Incentive

6 60+ is a Market Powerhouse Today A large and powerful market today 50 million consumers $1 trillion in annual spending (est.) More than ever continuing to work, play, and spend

7 Dollars on the Table Age Share Dollars All U.S. 100% $5 trillion All % $2.8 trillion Ages % $1.25 trillion Ages % $822 billion Ages % $706 billion Source: U.S. Consumer Expenditure Survey for 2004

8 What They Buy at 45+ Drugs Health Care Cash Contributions Home Maintenance Reading materials Entertainment Personal Care Housing Women s/girls apparel New cars/trucks 77% / $43 billion 70% / $209 billion 70% / $115 billion 70% / $116 billion 65% / $10 billion 57% / $56 billion 56% / $38 billion 54% / $867 billion 54% / $56 billion 53% / $109 billion Source: U.S. Consumer Expenditure Survey for 2004

9 Where Power Shifts to 55 and 65+ Share by Age Total Age 45+ Ages Ages Age 65+ Total 55% 24.7% 16.3% 14% Expenditures $2.8 trillion $1.25 trillion $822 billion $706 billion Drugs 77% 20% 20% 37% Health Care 70% 21% 19% 30% Contributions 70% 23% 19% 28% Home Maint. 70% 25% 21% 24% Reading mat. 65% 23% 20% 22% Source: U.S. Consumer Expenditure Survey for 2004

10 And Even More Tomorrow Boomers at Plus Boomers at Plus More consumers and more dollars More consumer oriented Evidence from those turning 60 this year suggests the core generational consumer psychology will not change with age

11 The Age Wave Millions Ages 75+ Ages Ages Source: U.S. Census Bureau, 2004, U.S. Interim Projections by Age, Sex, Race, and Hispanic Origin,

12 Market Psychology

13 60+ Consumer Psychology Satisfied with life overall 60+ even more than boomers Acceptance of financial status Increasing concerns about health Seeking/experiencing the freedom to do what I want to do whether that is indulging in self-expression or giving back Source: Boomers at Midlife: The AARP Life Stage Study,

14 Lives in Motion: Work/School at 63 Age 63, working /college student, law school next Today I am not retired and do not plan on retiring in the near future even though I will be eligible for retirement next year. I currently work as a Legal Assistant and attend college in pursuit of a B.A in political science. Tomorrow When I graduate, hopefully next year, I plan on going to law school. I look forward to traveling more and seeing all those historical and faraway places, not too far in the future. Source: Online Bulletin Boards, Roper/Langer Qualitative Research, December 2003

15 Liza, San Diego, Age 75 The thing that surprises me about being in my 70 s is that it s so much fun... you don t have to play out any role like daughter, boss, employee.

16 60+ Market Psychology and Values Constant Value for money Quality/durability Customer service Emerging Customization Convenience Independence

17 Boomer Psychology Satisfied with life overall Ambitious for even better life in future Optimistic about achievement Yearning for self-reliance Yet in some areas feeling out of control Source: Boomers at Midlife: The AARP Life Stage Study,

18 Patricia would like to scuba dive around fantastic coral reefs. My Time Nancy has a lot of plans... Maybe go into business... Maybe catering... Maybe write a book... Source: Online Bulletin Boards, Roper/Langer Qualitative Research, December 2003

19 Boomer Market Psychology Customization I want what I want Speed I want it when I want it Convenience I want to find and purchase it easily Independence I want the tools to make my own decisions

20 Boomers at 60 Heralds of the New AARP telephone survey of 800 Boomers born in 1946

21 Sixty and Satisfied 3 in 4 (77%) are satisfied with life 2 in 3 or more say their finances, health, and work life are either as good as or better than they had expected at this age Boomers Turning Sixty: A Survey of Boomers Born in 1946, AARP, 2006

22 Sixty and Still Seeing the Silver Lining Percent who look forward to next five years with these feelings: Hopeful Confident Fulfilling 79% 86% 85% Exciting 70% Uncertain Stressful Anxious 47% 54% 52% Boring 30% Boomers Turning Sixty: A Survey of Boomers Born in 1946, AARP, 2006

23 Sixty and Working Nearly 7 in 10 are working (54%) or planning to go back to work (14%) Just 21% are retired and not working Among those working 54% want to retire as soon as I can. 37% plan to work until I drop. Boomers Turning Sixty: A Survey of Boomers Born in 1946, AARP, 2006

24 Sixty and Planning to Do More Not Less.... Take better care of my health Spend more time with loved ones Spend more time on hobbies/interests Spend more time doing what I want Travel more 56% Volunteer more 47% Save more/retirement 45% Take classes/learn 43% Move 30% 87% 80% 72% 71% Boomers Turning Sixty: A Survey of Boomers Born in 1946, AARP, 2006

25 What I Want for My 60 th Birthday A red convertible/ a Harley Trips (to Alaska/ Vegas/ around the world) To see the man I had an affair with A million bucks (and a diamond ring) A grandchild/ a hug A good book/ jug of wine/ glass egg/ trip to spa Health To be 30 again Immortality/ 60 more birthdays!!!!!!! Boomers Turning Sixty: A Survey of Boomers Born in 1946, AARP, 2006

26 Exploding Myths Not Brand Loyal Not focused on price as key to value Not Technology Averse Not going to retire from work or life Not going to stop spending

27 Brand Loyal Not Don t ignore this market You can win them as new customers if you try You can lose them as former customers if you don t AARP Brand Loyalty Survey 2005

28 Brand Loyal They Are Not Even at 60+ Care about value, not brand 89% 92% 88% Will pay more and switch if product better meets my needs Does not pay to be loyal to one brand 65% 62% 61% 65% 75% 77% Age Age Age 60 + AARP Brand Loyalty Survey 2005

29 Not Motivated by Price Alone Factors very important in major purchase decisions Quality 85% 90% 94% Price 55% 54% 57% Advice of Family and Friends Brand 21% 27% 35% 47% 49% 45% Age Age Age 60 + AARP Brand Loyalty Survey 2005

30 Technology Averse Not Don t talk down to me when it comes to technology. For me, technology is a tool that helps me to Get my work done, whether personal or career Keep in touch with family Locate right product for my needs Research/compare products Save time and/or money

31 Video Purchases Store vs. Online Percent of purchasers Ages % 93% Ages Ages % 14% 79% 91% Store Online AARP Technology Survey 2005

32 Travel Ticket Purchases Store vs. Online Percent of purchasers 11% Ages % 77% 14% Ages % 78% Ages % 25% 56% Store Telephone Online AARP Technology Survey 2005

33 What can you do to get me to buy more online? Percent who agree they would buy more online if: 77% Better security 69% 58% 72% Easier to return 66% 46% Better customer service 51% 72% 68% Ages Ages Ages 60+ AARP Technology Survey 2005

34 Retire? Not Really My life is just great. I feel more active and have a more interesting life than in the past. I have been married for 4 years and have taken up the hobby of fly-fishing. I am not fully retired. I work a few days a week doing office temp stuff. If I didn't have the office temp stuff to do, I think I would be bored. Online Bulletin Boards, Roper/Langer Qualitative Research, December 2003

35 Stop Spending? Not Likely I don t think that I spend money very differently today than when I was younger. I have always been careful with money, spending on what I truly need and not being wasteful. The difference is that now I can afford some things that I could not afford when I was younger. Source: Online Bulletin Boards, Roper/Langer Qualitative Research, December 2003

36 Advertising Matters Be Where They Are Speak in their Language

37 Information-Seeking for Major Purchases Friends/family 38% 47% 57% Newspaper ads 38% 48% 46% TV ads 40% 40% 35% Research online 18% 46% 40% Age Age Radio ads 23% 19% 16% Age 60 + AARP Brand Loyalty Survey 2005

38 Connecting with Advertising Percent who agree with statements Less likely to consider a product if ads are offensive 68% 80% 75% A lot of ads are too weird for my taste 39% 58% 74% Identify with model years younger, not more Ads geared toward people my age are often condescending or insulting 38% 37% 47% 53% 47% 55% Age Age Age 60 + AARP Brand Loyalty Survey 2005

39 What to do? Advertise both in store and out Use humor but don t insult me Go young but not too young Market to attitude not age Focus on value not price Focus on family Offer tools to gain control Retire retire

40 Recap: Healthy, Wealthy, and Wise Time for reflection: My Time Have money and spending it Looking for new experiences Open to new ideas, new technology Open to new brands Value independence/control

41 Big and Getting Bigger and more demanding The 60+ market is big and getting bigger in both size and dollars Needs are driven by work, care-giving, and my time on top of health/finance. They expect service, and increasingly, customization to their needs. They are insulted by what you are trying to sell them and how you are speaking to them.

42 Pay Attention Pay attention don t ignore them. Court them don t take them for granted. Understand their lifestyles and values. Respect them in your advertising. in your store or online displays. in the way you serve them.

43 See Real People Women Singles Multicultural Working/ retired Life stages Lifestyles Values

44 More Information Web Site Linda L. Fisher, Ph.D. Director, National Member Research, AARP