Retail businesses are ignoring cashed-up Baby Boomers due to “pervasive ageism” and instead targeting marketing initiatives towards generations with less cash.
This is according to two RMIT University marketing experts who both say businesses could benefit from being more inclusive to older generations in their marketing and touchpoints.
Associate professor in marketing Foula Kopanidis said there are 5.6 million Baby Boomers in Australia, making up 21.5 per cent of the national population.
“With an average accumulated net worth of $381,100 per person, they own more than half of Australia’s national wealth – and they like to spend it,” Kopanidis said.
“Baby Boomers should be the prime target market for brands, yet many ignore the great potential of this consumer with only 5% of advertising expenditure in Australia spent on this demographic.”
RMIT associate professor in marketing Dr Bernardo Figueiredo said the “pervasive ageism” in Australia, particularly in the realm of technology, stems from stereotypical assumptions that older people lack the capability or interest to engage with digital innovations, leading to their neglect in marketing strategies.
“The stigma around older Australians and technology not only marginalises a significant demographic but also overlooks their growing proficiency and interest in digital platforms,” Figueiredo said.
“Addressing ageism in technology requires a paradigm shift in how businesses perceive and cater to the older population, recognising them as a viable and valuable market segment.”
According to Roy Morgan retail and consumer expert Laura Demasi, older people have shifted towards online usage, predominately driven by the COVID-19 pandemic. This trended alongside an online sales boom over the last four years, lifting from $1.8 million in December 2019 to $3.8 million in November 2023.
“Most of the changes triggered by COVID stuck - predictably, COVID ramped up time spent online and this stuck,” Demasi said in an update last year. “Now almost half the population spends more than 24 hours a week online.
“But what's most interesting about this is that this is a permanent behavior change.
“The key driver of this hike and heavy internet usage is older people who are now starting to catch up to younger people.”
Demasi said COVID also ramped up time spent on social media, which has also stuck.
“More than a quarter of the population is now a heavy social media user, spending eight hours or more a week on social - and this is up by 26%. It's the same story in terms of older Australians catching up with younger people.
“The surge in people shopping online over COVID also stuck, still hovering around peak level. In other words, six in 10 people still shop online regularly. This looks different by age, with 25-34 being the biggest online shoppers - almost seven in 10 are buying at least once at an average four weeks.
“In what seems to be the same pattern, we have older people growing the most when it comes to shopping online.”
Kopanidis said another stereotype lumped onto older demographics is that they don’t want to engage in eclectic lifestyles and hobbies that would otherwise be attributed to younger generations. But this is also wrong.
“In fact, Baby Boomers show diversity not only in attitudes but also in lifestyle choices and they don’t always stick to the same path with their brand preferences,” Kopanidis said. “They resist cultural stereotypes associated with aging and strongly reject ageist labels and caricatures.
“They also often engage in online shopping, with at least 70% making one purchase from Amazon monthly and engaging with TikTok, Snapchat, Reddit, YouTube, and Facebook.
“If brands want to bring in big business as younger generations tighten their purse strings, they must pay attention to the Baby Boomer market and truly understand what their purchasing habits and goals are – not assume.
Kopanidis said businesses should also look at their whole customer experience and whether it is inclusive of older demographics - such as website design, font size and customer service options.
“Some brands, such as Bonds, have reaped the rewards of paying attention to Baby Boomers in their marketing,” he said.
“As a well-loved brand, it knows how to take advantage of being inclusive of their target market – something many more brands can learn and benefit from.”
Dr Figueiredo added that businesses should incorporate older individuals in co-design, user experience and product testing, which can lead to more inclusive technologies that better cater to a diverse age range.
“Businesses stand to benefit significantly by tapping into the 'silver economy,' as older consumers often possess more disposable income and brand loyalty compared to younger demographics,” Figueiredo said.
“There need to be more strategic marketing campaigns that positively represent older individuals interacting with technology to help dispel ageist myths and attract this demographic to new tech products and services.”
“Play, and digital play, is a significant, but often underestimated area, of market growth”