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Senior Purchasing Decisions - US - May 2010

In today’s media, over-65s are largely marginalized by marketers that want to keep their appeal as broad as possible. This tendency will necessarily change over the next few years as Baby Boomers bring their buying power across the 65-year mark. An understanding of how retirement and age shift purchasing behavior will be essential in capturing Boomer retirement assets.

In this report, Mintel takes a closer look at how over-65s make their purchase decisions.

Analysis and insights offered include:

  • Why seniors are delaying retirement
  • Why buying power of retired consumers is shrinking
  • How advertisers are re-defining how they portray seniors
  • What kinds of new marketing channels for seniors are emerging
  • Which discretionary categories do seniors spend most in
  • How important are budgets to senior spending
  • Where do seniors get their product information
  • Which product qualities do seniors value most

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Consumer survey data
          • Advertising creative
            • Abbreviations
              • Terms
              • Executive Summary

                • Aging Baby Boomers to drive shift in senior marketing
                  • Delayed retirement comes amidst decline in consumer appetite
                    • Living situation impacts discretionary spending
                      • Seniors are marginalized for fear of losing younger consumers
                        • Senior internet usage grows quickly and enhances quality of life
                          • Innovations create new channels for senior marketing
                            • Quality is the key value proposition for seniors
                              • Most seniors don't follow a budget but seek value
                                • Dining out, gifts, and vacations lead senior discretionary spending
                                  • Marketing techniques vary by distribution channel
                                    • Newspaper and internet are most popular sources of product information
                                      • General disdain for advertising makes reaching seniors through TV difficult
                                        • Role as grandparent offers another approach to senior marketing
                                          • White seniors more resistant to ads but more likely to buy on brand
                                          • Insights and Opportunities

                                            • Senior couples may appreciate a more accurate depiction of marriage
                                                • Figure 1: Categories of discretionary spending, by household size, February 2010
                                              • Baby Boomers bring technology into retirement
                                                • Online strategies can target seniors while avoiding stigma
                                                • Inspire Insights

                                                    • Empowered Seniors
                                                      • What's it about?
                                                        • What we've seen
                                                          • Specifics
                                                            • Implications
                                                            • Background Factors

                                                              • Senior demographic to see boost from aging Boomers
                                                                • Figure 2: Population, by age, 2005-15
                                                              • Recession shrinks the nest egg and puts hold on spending
                                                                • Recession leaves lingering bad taste in the mouths of seniors
                                                                  • Medical costs and housing put pressure on buying power
                                                                    • Most seniors live independently; married seniors are a priority target
                                                                      • Figure 3: Senior living situations, by household income, February 2010
                                                                      • Figure 4: Senior living situations, by gender, June 2009
                                                                    • Diversity of seniors increases but still much less than younger generations
                                                                      • Figure 5: U.S. population share—over-45s, by race/Hispanic origin, 2005-15
                                                                  • Lifestyle Marketing

                                                                    • Overview
                                                                      • Mobile technology: Jitterbug taps into an older stereotype
                                                                        • Food and beverage: Coca-Cola injects hope into reality
                                                                          • Consumer Association: AARP sees the kid inside
                                                                            • Figure 6: AARP TV ad—When I Grow Up, March 2010
                                                                        • Healthcare Marketing

                                                                          • Marketers shy away from candid images of aging
                                                                            • Figure 7: Elations—Body Parts, April 2008
                                                                            • Figure 8: Tylenol Arthritis—Body Parts, April 2008
                                                                          • Some products for seniors opt to target relatives
                                                                            • Figure 9: Aricept—Forgetting Lasagna, March 2009
                                                                          • Marketing can benefit from realistic and relatable senior models
                                                                            • Figure 10: Woodlands Creek—Happy Hour, March 2010
                                                                        • Financial Products Marketing

                                                                          • Trusted senior celebrities make complicated products more palatable
                                                                            • Iconic celebrities speak to a generation facing retirement
                                                                            • Dining Out Decisions

                                                                              • Quality and convenience more likely to attract senior diners
                                                                                • Figure 11: Importance of restaurant qualities, by age, October 2009
                                                                              • Denny’s appeals to broad age range with older character humor
                                                                              • Leisure Travel Marketing

                                                                                • Seniors are under-represented in travel marketing
                                                                                  • Online travel booking
                                                                                    • Cruise lines
                                                                                      • Smaller travel companies tackle the senior niche
                                                                                      • Seniors and the Internet

                                                                                        • Usage of internet by over-65s is growing quickly
                                                                                          • Figure 12: Top 10 online activities performed in the last 30 days by over-65s, Fall 2009
                                                                                        • Facebook is not just for the young
                                                                                          • Figure 13: Top 10 online destinations by over-65s, November 2009
                                                                                        • Senior-leaning sites relate to news, weather, and travel
                                                                                          • Figure 14: Popular websites for seniors, April 2008-June 2009
                                                                                        • Online usage promotes mental health
                                                                                        • Innovation and Innovators

                                                                                          • Mather’s Café Plus reaches seniors with a sense of vitality
                                                                                            • Social networking platform targets seniors in retirement homes
                                                                                              • Mobile applications cater to health needs of seniors
                                                                                              • Purchase Decision Factors

                                                                                                • Quality is a critical selling point for seniors
                                                                                                  • Figure 15: Factors in the purchase decision, mean score, by household income, February 2010
                                                                                                • Seniors who live alone more concerned about privacy
                                                                                                  • Figure 16: Factors in the purchase decision, by household size, February 2010
                                                                                                • Seniors trust the dependability of known brands
                                                                                                  • Figure 17: Attitudes toward brands when shopping, by age, November 2008-December 2009
                                                                                              • Attitudes toward Budgets

                                                                                                • Most seniors don't follow a budget but watch expenses
                                                                                                  • Figure 18: Attitudes toward budgets, by gender, February 2010
                                                                                                  • Figure 19: Attitudes toward budgets, by household income, February 2010
                                                                                                • Seniors living alone more likely to follow strict budgets
                                                                                                  • Figure 20: Attitudes toward budgets, by household size, February 2010
                                                                                              • Discretionary Spending

                                                                                                • Dining out, gifts, and vacations lead senior discretionary spending
                                                                                                  • Figure 21: Categories of discretionary spending, February 2010
                                                                                                • Majority of low-earning seniors make no discretionary purchases
                                                                                                  • Figure 22: Categories of discretionary spending, by household income, February 2010
                                                                                                • Senior men more likely to make discretionary purchases
                                                                                                  • Figure 23: Categories of discretionary spending, by gender, February 2010
                                                                                              • Purchasing Behavior

                                                                                                • Different channels rely on different marketing strategies
                                                                                                  • Figure 24: Purchasing behavior at various channels, February 2010
                                                                                              • Attitudes toward Health and Diet

                                                                                                • Health enhancement offers a strong basis for premium positioning to seniors
                                                                                                  • Figure 25: Attitudes toward health and diet, by age, November 2008-December 2009
                                                                                                • Senior women are slightly more health-conscious
                                                                                                  • Figure 26: Attitudes toward health and diet, by gender, April 2008-June 2009
                                                                                              • Sources of Information

                                                                                                • Newspaper is a primary source of info for seniors
                                                                                                  • Internet far more influential than TV, especially among affluent
                                                                                                    • Word of mouth still important for over-65s
                                                                                                      • Figure 27: Sources of information, by household income, February 2010
                                                                                                    • Internet most likely used for price comparison
                                                                                                      • Seniors value customer ratings but not yet interactive
                                                                                                        • Figure 28: Uses of the internet for consumer research, by household income, February 2010
                                                                                                    • Attitudes toward Advertising

                                                                                                      • General disdain for advertising makes reaching seniors through TV difficult
                                                                                                        • Figure 29: Attitudes toward media advertising, by age, November 2008-December 2009
                                                                                                    • Popular Media

                                                                                                      • Senior-skewing magazines related to home making and current events
                                                                                                        • Figure 30: Popular magazines for seniors, by gender, April 2008-June 2009
                                                                                                      • Senior-skewing cable channels broadcast news and classic movies and TV series
                                                                                                        • Figure 31: Popular cable networks for seniors, by gender, April 2008-June 2009
                                                                                                    • Visitation of Grandchildren

                                                                                                      • Grandparents split evenly between frequent and infrequent visitation
                                                                                                        • Figure 32: Visitation of grandchildren, by gender, February 2010
                                                                                                      • Grandparenting serves as a useful approach in senior marketing
                                                                                                      • Race and Hispanic Origin

                                                                                                        • Brand marketing may be more effective for white seniors
                                                                                                          • Figure 33: Attitudes toward brands when shopping, by race/Hispanic origin, April 2008-June 2009
                                                                                                        • Black seniors more receptive to ads but retention not higher
                                                                                                          • Figure 34: Attitudes toward media advertising, by race/Hispanic origin, April 2008-June 2009
                                                                                                      • Cluster Analysis

                                                                                                          • Big Spenders
                                                                                                            • Demographics
                                                                                                              • Characteristics
                                                                                                                • Opportunity
                                                                                                                  • Big Savers
                                                                                                                    • Demographics
                                                                                                                      • Characteristics
                                                                                                                        • Opportunity
                                                                                                                          • Internots
                                                                                                                            • Demographics
                                                                                                                              • Characteristics
                                                                                                                                • Opportunity
                                                                                                                                  • Characteristic tables
                                                                                                                                    • Figure 35: Senior clusters, February 2010
                                                                                                                                    • Figure 36: Attitudes toward budgets, by senior clusters, February 2010
                                                                                                                                    • Figure 37: Factors in the purchase decision, by senior clusters, February 2010
                                                                                                                                    • Figure 38: Categories of discretionary spending, by senior clusters, February 2010
                                                                                                                                    • Figure 39: Sources of information, by senior clusters, February 2010
                                                                                                                                    • Figure 40: Uses of the internet for consumer research, by senior clusters, February 2010
                                                                                                                                  • Demographic tables
                                                                                                                                    • Figure 41: Senior clusters, by gender, February 2010
                                                                                                                                    • Figure 42: Senior clusters, by household income, February 2010
                                                                                                                                    • Figure 43: Senior clusters, by marital status, February 2010
                                                                                                                                    • Figure 44: Senior clusters, by household size, February 2010
                                                                                                                                    • Figure 45: Senior clusters, by education, February 2010
                                                                                                                                  • Cluster methodology
                                                                                                                                  • Appendix: Other Useful Consumer Tables

                                                                                                                                      • Figure 46: Factors in the purchase decision, by gender, February 2010
                                                                                                                                      • Figure 47: Sources of information, by gender, February 2010
                                                                                                                                      • Figure 48: Uses of the internet for consumer research, by gender, February 2010
                                                                                                                                  • Appendix: Trade Associations

                                                                                                                                    Companies Covered

                                                                                                                                    • American Association of Retired Persons (AARP)
                                                                                                                                    • Cruise Lines International Association
                                                                                                                                    • Facebook, Inc.
                                                                                                                                    • Google, Inc.
                                                                                                                                    • Greenfield Online
                                                                                                                                    • Investment Company Institute
                                                                                                                                    • J C Penney Company, Inc
                                                                                                                                    • Macy's, Inc.
                                                                                                                                    • U.S. Bureau of Labor Statistics
                                                                                                                                    • Walmart Stores (USA)
                                                                                                                                    • Yahoo! Inc
                                                                                                                                    • YouTube, Inc.

                                                                                                                                    Senior Purchasing Decisions - US - May 2010

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