Figures released by the UK Office of National Statistics in 2019 showed that 5.% of over 65s had shopped online. That number is likely much higher today, given the impacts of the COVID-19 pandemic. In fact, a recent report from a British retailer Waitrose found that amount of regular online shoppers over the age of 55 has trebled this year.
Maybe that’s not a surprise. The pandemic forced many of us to adopt new behaviors overnight. But what’s interesting is how the older generation now value online goods and services differently.
A recent study by renowned economists David Nguyen and Professor Diane Coyle explores how the way people value online goods and services has changed during the pandemic. They found that over 65s now value online services 35% higher than before — online grocery shopping shot up by a massive 137%.
So this isn’t a fleeting surge in activity borne out of necessity. It's a long-term change in how a whole demographic behaves that unlocks tremendous new opportunities for merchants.
Yet this demographic tends to be all but ignored by e-commerce brands. That is a remarkable oversight, especially in this era of hyper-personalization, where so much potential exists to capture the hearts, minds, and massive spending power of the over 65 demographic.
Savvy yet loyal — save yourselves the toil
The older demographic appears to perfectly combine tech-smarts and loyalty — the dream combination for online merchants.
The UK’s over 65s are savvy and sophisticated when it comes to security — 70% of those surveyed check security and encryption before purchasing online. And 30% use e-wallets with ease — compare that with only 13% of the same age group in the US.
They also buy a wide range of products and services online. Our survey earlier this year found the majority of the over-65 respondents were purchasing books, films, beauty products, clothing and household items online.
As well as this, a study that we conducted found that the over-65's value online food shopping 137% more than they did pre-pandemic.
Despite their digital savvy, this demographic also displays a quality previously unknown in e-commerce — patience and steadfast loyalty. The value e-commerce brands should attach to this quality is significant.
Our research, which looked at the views and behaviors of 5000 consumers, reveals that first choice merchants are losing more than $20 billion due to false declines because consumers are ready to take their business elsewhere. Not so the over 65s. 76% of them are willing to continue retrying. Only 12% would consider moving their purchase to a competitor site.
Ditch your data dearth to stay ahead of the curve
Having said all of this, it’s not surprising that merchants are lagging in their understanding of this important demographic.
Consumer payment data is one of the most valuable data sets in the economy. It tells businesses so much about their customers and where opportunity exists. Yet our research shows that many merchants still don’t receive valuable payment data and insights from their payment providers.
For example, in the UK, 68% of businesses say that they don’t receive the level and quality of payment data and insights from which they can effectively build their online strategy.
The fact payment providers are not effectively passing this information onto merchants means many lack the sort of intelligence that ought to have informed a fast and tailored pivot to new and emerging demographics.
Scrap your assumptions; it's time to focus on the boomer consumer
In the past, it was easy for merchants to assume that over 65s don’t shop online. And when they do, being new to it, they lack nous and aren’t worth targeting.
That’s not true anymore. Our data proves this assumption is wrong and that the over 65s possibly a much better target audience than their grandchildren. So merchants would do well to take this demographic seriously and unlock the potential of the boomer consumer.