Brands increasingly understand the importance of providing personalised online experiences to attract and retain customers. Many have tackled this by changing their business models to offer subscription services to customers, with 3,500 such services existing today, nearly half of which launched in the last year alone. Birchbox, for example, has earned itself around 2.5 million subscribers by offering curated beauty boxes, including products tailored to suit customers skin, hair and style.
However, most of these shifts are intended to engage millennials, suiting their expectations of being targeted with personalised content and offers, and their preference for experiences over ownership. But with baby boomers owning over half of Britain’s £11 trillion wealth, the potential ‘grey dollar’ to be earned by brands is significant, and those which fail to market towards this demographic could be missing a trick.
It is also important for brands to understand that many in this demographic have a good grasp of technology. When you take into consideration the fact that around 72% of those aged 55-63 shop online, and eight million baby boomers spend more than 20 hours online per week, it’s clear that there is immense value in retailers offering this age group personalised e-commerce experiences. What is more, 75% of baby boomers tend to stick with a brand as long as they are happy with the customer service and quality of product they’re offered. However, nearly 24% will stop buying from a brand if the quality of a product or service goes down. So, brands must make sure they offer the best experiences and customer service both online and in-store, or risk losing out on their business.
If brands want to make the most of the ‘grey dollar’ market, they should consider the following four things:
1. Do not treat all over 55’s as one homogenous segment.
While there are notable trends across baby boomers, both in terms of their personal interests and shopping habits, this valuable macro segment is comprised of a very diverse range of individuals. For example, while many retirees are interested in healthcare products and higher-price point goods, it is too simplistic to assume that this is the case for everyone in the age bracket. What is more, within the baby-boomer segment, other factors, from age and gender to whether they have grandchildren or enjoy fishing, all contribute to their shopping habits and should not be overlooked. To make the most of the grey dollar, brands much research and break down the segment in order to engage with them on a personal level and in the right context.
2. Offer exceptional online customer support.
Brands should still target the grey dollar audience online, but not in the same way as millennials. Baby-boomers are 50% less likely to visit a store than millennials, so offering high-quality online experience is of utmost importance for brands.
While personalisation and fast customer service are very important to time-poor 22-37-year-olds, the older generation values high-quality, thorough customer support and an easy, humanised experience. With 85% of boomers saying they would switch to a competitor due to poor service, this, as well as recommending products and tailoring offers, should be the focus for brands seeking to retain their online loyalty.
One way to offer this is through the use of chatbots. For example, British high-end fashion retailer Ted Baker, launched a Facebook-based digital chatbot earlier this year. The bot,
named ‘Seemore’, offers immediate solutions to customer queries – the kind of support that over 55’s in particular find valuable. Ted Baker’s bot is a great example of how brands can reach this demographic, especially as their social media platform of choice is Facebook.
3. Provide them with in-store experiences to suit their needs.
While millennials are known to value speed and convenience, favouring subscription services and contactless payments, many baby-boomers have a greater interest in ownership. This, along with higher levels of disposable income, means that it’s wise to target baby-boomers with higher price-point goods, including the latest technologies, health products, wine and household appliances.
John Lewis for example is trialling private in-store shopping experiences for those willing to spend £10,000 or more. Aimed at those intending to make luxury purchases, the service sees staff locate desired items while shoppers relax with sparkling wine.
Additionally, while baby-boomers are increasingly savvy online shoppers, the high-street has a definite role to play in their shopping preferences. In line with a trend for purchasing goods over services, the older generation is more likely than those younger than them to want to see and feel a product before they buy. This means a well-stocked store is vital to ensuring the customer journey ends in a purchase, be that at a physical till or a digital shopping basket.
4. Recognise the value of your Grey Dollar customers by rewarding their loyalty.
Although we have established that boomers are likely to stick with brands they are happy with, companies must continually work to meet their needs and provide them with reasons to stay, otherwise they are likely to be ‘brand hoppers’.
One way for brands to encourage loyalty is through using reward schemes, and analysing customer data (such as average transactional spend, frequency of visits or products purchased) to build a profile of their most valuable customers. This will help target customers with personalised offers and rewards that are relevant to them. A well-executed programme can give customers a sense of community and make them feel that they’re part of an exclusive group. For example, Sky launched its VIP loyalty programme last year, targeting customers that have been with the brand for a long time, through a tiered reward system. As well as exclusive film previews and VIP tickets to events and sports fixtures, those who have been with Sky for more than 15 years are offered a priority customer service phone number, enabling them to skip the queue and speak to a Sky VIP advisor. Given that over-55’s value customer service highly, this is a great way for Sky to continue to inspire loyalty from customers within that age bracket.
So, in order to make the most of the ‘grey dollar’, brands mustn’t underestimate the older generations affinity with technology or their shopping habits as they frequently browse and buy online. As such, brands targeting baby boomers should focus their efforts online, meet their demand for higher price-point goods and of high-quality customer service. Finally, encouraging loyalty is essential; the over 55 age group isn’t scared to look elsewhere if a brand doesn’t meet their needs so this should be key to brands’ online marketing strategy.