According to research published by BMRB International next week, the over-50s are affluent, adventurous consumers with plenty of spare time. More than ever before, marketers need to take this target market into consideration.
The rising importance of the “grey” market has become a fairly regularly covered topic in the trade press, but there remains a need for in-depth research into this target market. Research database TGI Gold tracks the consumer behaviour and lifestyles of the over-50 market, and will publish its latest data on November 22.
The profile of 50- to 75-year-old consumers has changed as post-war baby boomers have moved into this age category, taking with them their wealth, influence and market-dominating numbers. This sector has grown by 700,000 in the past five years, with a 25 per cent increase among the sub-group of 50- to 54-year-olds. The over-50 generation accounts for about a third of the total adult population – some 14.7 million people.
While income levels remain lower than for consumers under 50, the gap is closing steadily. Year-on-year increases in household income levels among the 50- to 75-year-old group have consistently outstripped those of the under-50s during the Nineties.
One reason for this could be that over-50-year-olds are holding on to their jobs for longer and creating new employment for themselves – specifically among the growing segment of people in their early 50s. In fact 230,000 of those still working describe themselves as being employed as consultants.
Since 1989, full- or part-time employment among the total population has risen by two per cent, while the equivalent figure for over-50s is 12 per cent. This is despite evidence from TGI Gold that the average age of a man retiring from full-time employment has dropped by a year since the first survey in 1995, from 62 to 61.
It isn’t only employment that creates disposable income. Although 38 per cent of 50- to 64-year-olds are still saddled with a mortgage, the figure plummets to nine per cent among 65- to 75-year-olds. Home ownership also brings a feeling of financial security. For example, among those who anticipate paying off their mortgage within the next five years, there is a 25 per cent above-average desire to subscribe to digital TV.
Many over-50s are the second major generation of home-owners and benefit from being the children of the first. One in ten has inherited property, while over a fifth have gained cash inheritance.
Investment of their burgeoning income is also on the rise. The forthcoming TGI Gold data shows a sharp increase on the 1995 figures for stock market investment, with over a million new share owners. It also reveals that ISAs are owned by one in six over-50s.
Such injections of wealth, coupled with relative financial security, make the grey market a key spending group. Over-50s are almost 30 per cent more likely than the average adult to buy a new car and over 40 per cent more likely to take three or more holidays a year.
Their holiday destinations tend to be further afield than those of younger groups, and are often influenced by where their children and other relatives live.
This adventurous outlook on life is also reflected in the growing penetration of technology among consumers aged over 50. The 28 per cent level of computer penetration among this group has grown by over 50 per cent over the past five years.
Furthermore, the new data shows that almost one in ten plans to replace their existing computer hardware in the next twelve months and one in five intends to upgrade it.
When it comes to spending money, the grey market has an additional outlet others are unlikely to have – grandchildren. By their own combined estimates they spent over £430m on their grandchildren last year, with purchasing decision-making being evenly split between grandparents and grandchildren.
As the balance of wealth continues to shift towards consumers over the age of 50, marketers will have to improve their understanding of the requirements of this older generation.