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.

Direct marketing and retailing to older adults

In addition to traditional advertising and store shopping, retailers and marketers have also promoted products and services to older adults through nonstore ventures including catalog, direct mail, and electronic shopping on cable television and the Internet. These methods of promoting and selling are often called ‘‘direct marketing’’ or ‘‘direct retailing.’’ Both catalog and electronic shopping can be convenient for older adults. Although most products could be sold through catalogs or the Internet, some more readily lend themselves to this form of retailing. Insurance, credit cards, magazines, books, clothing, audiocassette tapes and CDs, toys, and gardening supplies are frequently sold to older adults through direct marketing (McDonald).

The products most likely to be sold to older adults through direct marketing are not widely distributed. In other words, a product such as paper towels would seldom be sold by direct marketing because it is readily available in outlets ranging from grocery stores to discount and drug stores. Obviously, most consumers would not want to wait for this type of product to be shipped when they could easily purchase it at a local store. On the other hand, supplements designed to help keep older adults’ bodies more flexible or tools to assist with a hobby such as musical instrument tuning and repair can be more effectively sold through direct marketing. To reduce the risk to consumers who are purchasing goods they cannot see or touch, unconditional guarantees are a standard business practice in the direct marketing industry (Katzenstein and Sachs).

Convenient shopping and special promotions

Older adults tend to be quality-conscious, preferring a few high-quality items rather than a larger number of lower-quality ones. In addition, they look for added comfort. For most, the ski jacket that costs an extra fifty dollars but keeps them dry and warm is worth the higher price. Like most other consumers, they want hassle-free shopping and do not like long checkout lines. Safe and convenient shopping locations are especially important to older consumers. In fact, housing that attracts older adults is often located close to grocery stores and shopping malls.

Some retailers have special promotions designed to attract older people into their stores. Some may offer special delivery services, and others may offer senior citizen days or open houses just for them and their caregivers. Others offer senior citizen discounts and special services such as free giftwrapping. However, some older adults reject these discounts as stigmatizing and damaging to their self-image. Retailers and marketers cannot assume that senior discounts will appeal to all older adults.

Health care, cosmetics, and personal care products and services

Older adults are targeted for health products and services that are less likely to be marketed to younger consumers and that may be designed to assist them in retaining a youthful appearance. These include products such as pharmaceuticals, and services such as eye and ear surgery as well as cosmetic surgery. The ‘‘fountain of youth’’ is often stressed in personal care products. Hairpieces and hair dyes, creams designed to make the skin look younger, and even outpatient cosmetic surgery are available for both men and women who want to ‘‘look as young as they feel.’’

Retailers and marketers promote health products specifically designed to treat illnesses that most often affect older adults. These promotions and products offer treatments, remedies, and therapies for afflictions such as arthritis, fibromyalgia, eye and ear afflictions, Parkinson’s disease, Alzheimer’s disease, diabetes, and osteoporosis. Those suffering from these and other functional disorders may require special diets and adaptive equipment. Adaptive devices such as wheelchairs, walkers, and beds, as well monitors of blood pressure and sugar levels, are promoted to older adults. Other products targeted to older adults include vitamins and nutritional supplements, such as high protein drinks and prescription and over-the-counter drugs. Older adults are also targeted for specific types of insurance focused on health issues such as long-term care insurance and insurance for specific illnesses such as cancer.

Caregiver and grandparent roles

Older adults often find themselves in the role of caregiver—caring for a spouse, a friend, or a parent. Caregivers are targeted by marketers and retailers for products designed to make this role easier. Included are adaptive devices such as a ramp or stair lift that takes the place of steps or stairs. Also promoted to the caregiver are home security systems and emergency response systems that automatically notify authorities in case of a medical or fire emergency. Smaller items include tape to secure carpets and rugs, and throw rugs designed not to slip on floor surfaces.

Products and services are also targeted to older people as the grandparents/caregivers of young people. These include toys—often expensive ones—designed for the doting grandparent to give to a grandchild, as well as investments such as a college education for the grandchild. Some prospective grandmothers are even given baby showers. Cribs, strollers, books and videotapes, computer games and videogames, safety gates for stairs, and children’s apparel are often marketed and sold to older adults to be given as gifts. Some retailers estimate that 30 percent of all sales of children’s products are to grandparents (Jeffrey and Collins). In addition, many older adults provide childcare for grandchildren and other young people—thus, another reason to purchase such products.

Entertainment and educational activities

Older adults are the targets of travel promotions such as special tour packages and transportation offers, which often include plane, train, and bus discounts. Even cruises are designed to accommodate older adults’ needs. Hobbies that older adults are likely to engage in, such as woodworking, gardening, cooking, and handicrafts, are promoted (Schofield-Tomschin and Littrell). Entertainment centers, such as the one located in Branson, Missouri, provide celebrity entertainment specifically marketed to older adults. However, the movie and television industries do not target older adults. The movie industry targets individuals between the ages of eighteen and forty-nine. Some observers consider older adults a missed market.

In addition to entertainment activities, some older adults seek educational opportunities. They often combine travel, entertainment, and educational activities. To meet these needs, a nonprofit organization called Elderhostel was founded in 1975. Elderhostel organizes learning activities for older people and offers programs throughout the world. These are often held on college and university campuses during the summer or vacation times. Courses focus on a large variety of subject matter from astronomy to English literature.

In addition to the Elderhostel movement, colleges and universities target older adults as consumers of special learning opportunities. Learning is promoted as a lifelong activity, with workshops and courses targeted to older adults. For example, in May of 2000, the governor of Wisconsin signed a bill allowing free college attendance to those sixty and older. Thus, older adults can attend classes at schools in the University of Wisconsin system and in the Wisconsin Technical College system, provided there is space available.

Older adults as investors

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.

Housing and home modifications

With the majority of older adults staying in their single-family home for at least ten years after retirement, home modifications are promoted to them. These include sit-to-work areas in the kitchen, adjustable-height work surfaces, single-lever faucet control, bathroom grab bars, movable shower heads, beds that can easily be adjusted at the touch of a button, and door knobs and light switches that require little hand dexterity.

Communities, often with residential living arrangements such as retirement apartments, have been designed and marketed specifically to older adults. The retail housing industry offers many alternatives to older adults, including independent living, assisted living, and nursing homes. Services such as housekeeping, meal preparation, transportation, and home maintenance may be included. These facilities are promoted in magazines, newspapers, and radio and television advertisements as well as Internet sites. Most of these advertisements invite the older consumer to live luxuriously by using promotional phrases such as ‘‘spectacular community center,’’ ‘‘stimulating activities and outings’’ and ‘‘spacious one- and two-bedroom apartment-homes.’’

Ethical issues

Although most retailers and marketers are honest, a few unethical ones target older adults. Schemes such as free gift and get-rich-quick offers, fraudulent travel awards, and sweepstakes can plague older adults. Other problems come from deceptive advertisers, telemarketers, and door-to-door sellers who prey on older people whom they may believe to be isolated and lonely. Although any product or service can be sold in an unethical manner, those most often associated with unethical promotions to older adults, including hearing aids, insurance, home improvements and repairs, investments, medical devices and cures, and recreational property such as time-shares or membership camping.

Shopping by mail can also be a problem for older adults. In fact, the number one consumer complaint in the United States is mail order problems. Although there are many reputable firms, there are some that overprice and misrepresent their products and services. In addition, telemarketing fraud aimed at older adults has been a growing problem in both the United States and Canada. The U.S. Justice Department estimates telemarketing fraud is costing victims $40 billion a year (Wisconsin Department of Agriculture, Trade, and Consumer Protection).

Some unethical retailers and marketers specifically target older adults because, compared to younger adults, they are less likely to report unethical practices for fear they will be viewed as incompetent to handle their own affairs. However, federal and state rules and laws help to protect consumers. At the federal level, the Federal Trade Commission has rules obligating retailers to be ethical in advertising and to have adequate quantities of sale items in stock. At the state level, states such as Wisconsin have enacted legislation that stipulates additional fines and penalties for those who specifically take advantage of older persons. Wisconsin law (sec.100.264, Stats) allows courts to impose additional fines of up to ten thousand dollars for violations of consumer laws. This law includes violations related to a number of different consumer problems targeted at older adults, such as false advertising, home improvement schemes, mail order and telecommunications fraud, and prizes that require purchases (Wisconsin Department of Agriculture, Trade, and Consumer Protection).

Retailers as employers of older persons

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.

Conclusion

Overall, older adults make up a dynamic market that will be increasingly targeted by retailers and marketers as their population keeps growing. The roles of older adults within the retail marketplace will continue to change as the ways in which older people are perceived change. Stereotypical views of older adults as incapable of change, ill, and controlled by routine are giving way to the perception that older adults seek new experiences and personal challenges. Retailers and marketers will need to develop new marketing and retailing techniques to meet the needs of this market. The older market will probably be divided in different ways, and new categories of goods and services will likely be developed to meet the needs of older adults. This market will probably be segmented in more specific ways based on lifestyle, value orientations, and demographic factors such as income and educational level. These efforts to further segment the older market will help retailers to sell, and marketers to create and promote, new products and services to meet the needs of older adults.

Cynthia R. Jasper

See also Consumer Protection; Consumption and Age.

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RETIREE HEALTH INSURANCE

See Retirement, early retirement incentives

RETIREMENT AGE

See Pensions, history; Retirement, early retirement incentives