Retailing and Older Adults

Older adults have become an attractive market for retailers and marketers. People over the age of fifty-five, a fast-increasing part of the population, have a growing amount of spending potential. They are rather affluent in terms of discretionary income, and many have both time and resources to devote to shopping. In the past, older adults’ spending habits were more conservative than their younger cohorts. However, in the last twenty years older adults have begun to spend at about the same rate as younger people. The older population’s expenditures cover a variety of goods and services: health care products, travel, recreational vehicles, sporting equipment, secondary homes (apartments, condos, cabins, summer homes), luxury cars, electronic equipment, home improvement, clothing, gifts, and philanthropy. Nevertheless, in many product and service areas, such as the movie and television industries, marketers and retailers still insist on targeting younger consumers.

Yet many retailers and marketers have begun to target a wider variety of products to older consumers beyond those traditionally associated with older adults. Retailers and marketers face an increasingly competitive market, and find that one way to improve their competitive position and profitability is to target an underserved and growing part of the population. Some of this interest in the older population is due to significant social and demographic shifts that result from the growth of the population of older adults. In 1996, 13 percent of the population was over sixty-five years old. This will increase to 20 percent by 2030. Also of interest to retailers and marketers is that older people are living longer with more active lifestyles, and life expectancies are expected to continue to increase (Henderson). As people age, they continue to shop, and the majority of older adults do their own shopping for goods and services.

Obviously, older people are not a homogeneous group. Their behavior regarding the purchasing and consuming of products and services varies depending on age, income, and other demographic, sociological, and health factors. Purchasing and consuming decisions will be quite different for an individual who is fifty-five years old and in good health and one who is eighty-five years old and in poor health.

The financial industry often targets older adults as consumers of mutual funds, annuities, estate planning, and long-term care insurance. Many older adults have benefited from the appreciated value of stocks and mutual funds as the world’s stock markets have prospered throughout the 1990s, and are looking for ways to invest their money. Thus, the older adult population has become the perfect market for retailers of financial products.

Retailers often employ older people who wish to work part-time or full-time in positions ranging from cashier to management. The discount firm Wal-Mart employs older adults as greeters to welcome customers into its stores. Other retailers actively recruit older workers, who often bring experience, maturity, and a good work ethic to the retail establishment.