Seniors spend more than other age groups
Friday, July 19, 2002 | bySTEVE TARTAR
In 1961, Pepsi Cola launched an advertising campaign "for those who think young." The company cited "the increasing importance of the younger, postwar generation."
The Pepsi generation has grown up.
As baby boomers—those born between 1946 and 1964—grow older in the 21st century, they're reshaping the marketplace.
The more-than 77 million boomers in the United States form a market segment to be reckoned with, experts say.
It's the middle-aged buyer who holds the balance of power in the U.S. economy. Americans ages 45 to 64 years old outspend any other group, accounting for more than 15 percent of the purchases made by the average household, according to Bureau of Labor statistics.
And don't rule out seniors as a market, either. Those 75 and older are not only active consumers, but also quite media conscious. More than 70 percent of adults 65 to 74 read a newspaper every day, according to a study by the National Opinion Research Center.
Older viewers also are tuning into television. The study says one-third of those 75 or older spend five-plus hours a day watching TV.
But not all stay home with the remote control.
"It's a very active travel group. They've got the money and the time," says travel agent Barbara Hoffman, co-owner of Sutton Travel Service of Pekin, Ill., speaking of customers 55 and older.
The older group makes up more than a third of Sutton's business, she says, citing the growing cruise business as just one that caters to the mature traveler.
"Last year we took a cruise from Lisbon to Fort Lauderdale. My husband is 61 and he was the kid on this trip, the youngest man on board," she says.
Older voyagers are well-served by the travel industry. "There are some very good bargains out there. The airlines cater to them," Hoffman says of low-cost senior fares and the senior travel pack, where major airlines offer four discounted tickets for those 62 and over.
"The older traveler is often looking to go to more exotic destinations like Iceland or the Galapagos," Hoffman says.
Stan and Jean Morris are frequent Sutton customers.
"Stanley sails," says Morris, 78, of her 76-year-old husband. So they sail together, having taken a half-dozen cruises since his retirement 15 years ago. They just returned from the West Indies, where they enjoyed scuba diving.
"We try to plan one big trip each year with little trips in between," says Stan Morris, who sails on the Illinois River throughout the summer.
The couple also frequent the Elderhostel program, a Boston-based travel program that offers educational and cultural activities in 90 countries around the world.
Whether bird watching in Arizona, where they also learned how to make a quick draw—with pistols, not pencils—or learning about Africa, the pair is good example of today's active senior market.
So are Arthur and Esther Patay. Since retiring in 1983, Patay, 83, has returned to his native Europe on many occasions.
Originally from Budapest, Hungary, the couple arrived in the United States in 1949.
"We like to travel many places, but it's a matter of the budget," Patay says.
The budget of older consumers is no trifling matter. "Middle-aged households have the money," says Cheryl Russell, author of "How We Live: the Mid-Youth Market."
Women 55 to 64 spend more on clothing per capita than any other group, she says.
"The fact is that people keep spending. Those 65 to 74 spend more per capita than those 25 to 34 on food, housing and transportation," says Russell.
Older customers are not only booking airline trips, but also buying cars and trucks.
"The average age of our Cadillac customer tends to be in the mid-60s and many buy a new car every two years," says sales manager Dale Linebaugh.
"The one thing older customers look for in a car is the ease of getting in and out of the vehicle. That's why leather interiors are so popular. It's easier to slide right into the seat," he says.
"Older customers are buying Pontiacs and SUVs. People are more active today," Linebaugh says.
One-third of the pickup trucks sold go to U.S. drivers 50 and older, according to AARP.
Mature buyers also drive hard bargains in real estate.
"There is more demand for what I call one-level living," says real estate agent Brenda Epley. "A larger portion of the condominiums I sell are to 'empty nesters' and people 55 and older. In the 1980s, a condo was a hard sell. ... Not now."
Older buyers also buy toys, pets and playground equipment and other items you might associate with the youth market, such as compact discs.
"Sometimes older Americans feel out of place in loud youth-oriented shops. But they come to us online," says Howard Blumenthal, vice president of media and sales for online music store CDNow.
Almost one-quarter of the CDs purchased in the United States last year were by customers 45 and older, according to the Recording Industry Association of America statistics.
The Internet—the most visible of cutting-edge technologies often equated with youth—is another venue where the older market rules.
Two-thirds of online buyers are older than 40, a National Retail Federation survey indicates.
With seven million people 50 and older now online (about a quarter of the total U.S. population that's 50 and over) older users are challenging their younger counterparts on the Internet, according to Jupiter Research, a New York-based firm that focuses on online commerce.
When older Americans go online, they buy. Almost 80 percent of computer owners older than 50 have made a purchase on the Internet, says AgeLight, a consulting firm in Clyde Hill, Wash.
Older Internet users are logging on for longer periods of time, according to a recent SeniorNet survey. It showed 70 percent of computer users 50 and older are online for 20 hours a week or more.
Championing seniors as a group was underrepresented on the Web. But San Francisco Internet consultant Sherry Miller believes the group is now making its presence felt.
The author of the Internet column, "The Oldest Woman on the Web," Miller, 61, says older people need to be integrated into culture as a whole.
"You don't see sitcoms about older people, and they're just now making fashions for this group," said Miller.
Is the advertising industry ready to release its fixation with youth and adjust to the graying of America? Skip Dampier, president of Ross Advertising, believes it has already happened.
"That (ad) revolution has been going on for some time. Advertising has gotten more targeted. It's a rifle shot compared to 20 years ago," he says.
"The 25 to 54 group will continue to be a major market, but the market is more segmented now. Older actors and actresses are already being used, when in the 60s, advertisers would have used a younger model," says Dampier.