Online retailers ignoring £14.45 billion ‘Grey Pound’ market
Three-quarters (76%) of over 55s shop online at least once a month, yet just one in five (22%) marketers are targeting this age group on the web, reveals new research from Greenlight.
Online retailers are failing to tap into the ‘grey pound’, with just one in five (22%) marketers targeting older shoppers online, despite shoppers aged 55 or over set to account for £14.45 billion of online spend in 2015[1]. With the over 55s set to make up a third of the population and two-thirds of retail activity by 2025, digital marketing agency Greenlight commissioned research to better understand how online retailers can engage this high potential demographic on the web.
The study of 1,000 consumers aged 55 or over reveals:
- Vast majority of over 55s shop online: 9 out of 10 over 55s use the internet to research products and also to buy products, marking out a high degree of ecommerce engagement with the older demographic.
- Over 55s prefer accessing the internet on laptops; 66% of over 55s use laptops to research and discover products; making it the most popular internet-enabled device ahead of desktop computers, tablets and smartphones. However, discerning over 55s have shunned smartwatches with just 1% accessing the internet on these devices.
To better understand this demographic, Greenlight has created a panel of consumers over the age of 55 who they will consult when developing campaigns targeted at this group. The purpose of this panel will be to ensure that campaigns are optimised for the over 55s in order to appeal to their interests, preferences and behaviours.
Andreas Pouros, COO and co-founder said, “With over 55s set to spend £14.45 billion on the web in 2015, online retailers should spend less time chasing the youth market and concentrate on winning the ‘grey pound.’ Here lies an audience with more disposable cash, which is totally suited to ecommerce; eager to compare products and prices, shop flexibly and have products delivered to their door.”
“While tweens and young adults flock to social media sites like Instagram, Facebook and Twitter to see what their friends are buying or browsing, over 55s are more likely to be found reading blogs, shopper feedback, news articles or even Google reviews. Online recommendations greatly influence older online shoppers, this is just one element that brands should be building into their digital campaigns to make sure the “grey pound” is spent with them.”
Shopping behaviours
So, what are the over 55s buying online? More than three-quarters of the over 55s (76%) have bought a book or magazine online, making this the most popular ecommerce purchase. With CDs and DVDs and consumer electronics also factoring highly, this age group shows a preference for low-cost entertainment. However, with only 24% of over 55s having downloaded music or videos online, this demographic is not yet embracing all new forms of online entertainment.
How much are the over 55s spending online?
Just one in ten over 55s spend more than £150 per month online; a relatively small group of big ecommerce spenders. With half of over 55s (51%) spending between £20 and £80 per month, marketers could persuade a greater number of over 55s, who are already won over to the idea of online shopping, to purchase more frequently or invest in more expensive goods.
Men v. Women
Around three-quarters (76%) of over 55s shop for products and services online more than once a week, suggesting that ecommerce has become a routine part of their shopping activity. The average person over 55 spends £65.09 per month online with women spending slightly more than men at an average of £1.85 more per month. Men are bigger spenders than women on the high street however, with outgoings of £13.35 more per month, suggesting that men are more reliant on the traditional retail model while women over 55 are more open to using technology.
Regional variation
By region, the highest online spenders are in the East Midlands, spending £79.38 per month online and outstripping London and the South-East in a trend that will turn many expectations on their head. Northern Ireland is the highest high street spender, accumulating £101.25 per month in physical stores compared with just £53.33 online, shedding light on the opportunity for ecommerce retailers to win online share from this group of high spenders.
Shopping preferences
The top three reasons given by over 55s for shopping online are:
- Flexibility; being able to shop at any time of day
- Ease of product delivery; being able to receive products at any time
- Price comparison; being able to review and compare costs in a simple way
More and more over 55s are being won over to the benefits of ecommerce based on its practicality and simplicity. With this demographic also claiming to find online shopping less tiring without queues or crowded shops, it’s clear that marketers will win over this demographic by making online purchasing quick and easy.
However, marketers should be careful in grouping all over 55s together. As consumers move closer to retirement age (65+), online spend is seen to drop by £5.57, suggesting that older shoppers are less trusting in technology. Shoppers over the age of 65 show a preference for shopping in physical stores where customer service and human interaction is more prominent, increasing their high street spend by £4.19 at this point.
Andreas Pouros, co-founder and COO at Greenlight, added; “Inspiring and engaging this older demographic starts with understanding which products they want, how they browse and what will make them buy. This is exactly what our Grey Pound Panel sets out to achieve and we are looking forward to adding some expert insights to our digital campaigns!”
