There are now more pensioners than teenagers in the UK. The grey market – the over-50s – includes 20 million people and holds over 80 per cent of the UK’s wealth. And the Government forecasts that there will be 30 per cent more people aged over 50 by 2020 (Government Actuary’s Department of Projections).
Yet the marketing industry seems intent on ignoring this highly influential sector – on average, less than ten per cent of marketing expenditure is aimed at the grey market. Nowhere is this more true than in the new media arena. Online and SMS propositions are the exclusive domain of the 18to 35-year-olds who have been brought up on new media, and the time-hungry 30to 45-year-olds, for whom speed and convenience are everything. While it is true to say that the over-50s were not early adopters of mobile or internet technology, indications show that “silver surfers” are gathering momentum. With more disposable cash and time, the grey market could hold rich rewards, according to the latest Claritas research, using data from its national Shoppers Survey.
It is vital for marketers to remember that the grey market is not a homogeneous mass, and never has been. But with life expectancy on the increase, people are both healthier and wealthier and that means throwing the old grey stereotypes out of the window and adopting a more segmented view of the over-50s.
The need to segment the grey market becomes self-evident when you look at who does and who does not have an internet connection. Those aged 50 to 54 (often considered the start of the “grey” age) are 13 per cent more likely than the national average to have internet access at home – a figure that even outstrips 18to 24-year-olds. Web access begins to fall off among 55to 59-year-olds, but they are still in line with the national average. Sixtyto 70-year-olds report the lowest levels of internet connection.
The internet and e-mail are used as a communications tool by 27 per cent of 50to 64-year-olds with Net access. This drops to seven per cent among those aged 65 and over. When it comes to commercial transactions, booking holidays is the most common activity – ten per cent of 50to 64-year-olds book online. Only 1.6 per cent of those aged over 65 do so, however.
The same pattern holds true for other types of online commerce: eight per cent of 50to 64-year-olds book hotels or cinema tickets, or buy books or CDs online, while a further seven per cent use the internet to buy gifts. In all categories, less than two per cent of over-65s engage in online shopping. Interestingly, online grocery shopping seems to have made few inroads into the grey market – just 1.9 per cent of 50to 64-year-olds do their supermarket shopping online.
Clearly, marketers of online products who wish to target the grey market need to take these age-group divisions into account, since there is a danger of reaching not only those with no access to the internet but also those with no desire to buy online.
Affluence is another key determinant in grey-market online access at home. The report shows a strong link between income and internet connection and those households earning over &£25,000 a year should be a primary target. Occupation also correlates with online access: grey-market professionals and senior managers report the highest rate of daily internet use.
The internet has made significant inroads in all age groups, but mobile phone ownership is more heavily skewed towards the under-40s. Within the 40 to 54 age group, mobile ownership is in line or just above the UK average, but there is a steep decline among the over-60s, and just 23.3 per cent of those aged 75 have one – against a national average of 60.5 per cent.
Older people are also unlikely to use SMS. A mere 3.2 per cent of over-65s regularly communicate in this way. Those older people who do have a mobile are likely to use it less often, and “glove-box” ownership (where the phone is used for emergencies only) is prevalent. SMS, then, is not an obvious media choice for advertisers targeting the grey market.
Claritas predicts that, by 2011, there will be more people in the UK aged over 65 than under 16, and the economy’s purse-strings will be firmly in the hands of the grey market. Wireless technology will be increasingly integral to everyone’s life, but advertisers (both online and offline) will need to take a segmented view of older consumers by life-stage and lifestyle if they are to reap the potentially rich rewards the grey market offers.