Article: Thursday, 19 December 2024
Shopping habits change as people get older. As the proportion of older people in the population increases it becomes increasingly important for retailers and manufacturers to adapt to these shoppers. Linda van Rijn, who is responsible for category management for international consumer panel organisation YouGov, investigated how age influences consumer behaviour for her thesis in the Part-time PhD programme at Rotterdam School of Management, Erasmus University (RSM). She found that older people prefer to visit smaller local supermarkets more often, but buy less (even if it costs more), and get less adventurous in what they buy. Her research is useful for supermarket and retail business managers and CPG brands– and also relevant for governments, planners, and consumers. She will defend her PhD thesis, Old Habits Die Easily: Longitudinal Studies on Age-Related Consumer Behaviour Changes, on 19 December.
“Senior consumers exhibit distinct physical, psychological, and behavioural traits that affect their purchasing habits,” she explained, “and the rapidly growing elderly population in Western societies is a significant demographic transformation.” It’s expected that by 2045, a quarter of the population in the USA and Europe will be 65 or older; it’s a global demographic shift that presents challenges and opportunities for marketers and retailers. Linda analysed data that tracked households' shopping behaviour over a 14-year period – long enough to show how increasing age affects shopping habits. She combined this purchase data with demographic information and other data to present a comprehensive and nuanced understanding.
In the first part of Linda van Rijn’s study, she found that older adults visit the supermarket more frequently, but buy fewer items per visit. That pattern holds steady until around age 69, when the frequency of shopping trips begins to taper off. As time goes on, the shopping basket stays small and there are fewer trips to the store: older consumers purchase less.
The second part of her study examined the decline in store loyalty with age, and found that it levels off when shoppers are in their mid-seventies. Retailers might find this surprising – it appears older generations with long-standing habits and routines are not loyal to particular stores. This becomes more pronounced when consumers reach their mid-seventies. Loyalty for these consumers is influenced by how far away the store is, and how big it is: Linda found that smaller, conveniently located stores generate more loyalty among older people – they become more appealing as mobility declines. The result is that seniors start switching stores more often, a trend that could overturn assumptions about loyalty in this demographic.
Her third study shows that after the age of 50, people are less likely to seek variety – their shopping baskets typically contain fewer categories and brands of goods. After this age, consumers are more likely to stick with familiar brands and fewer product categories, suggesting that simplicity and familiarity take priority over novelty. It’s at this age that the ‘Buy one, get one free’ (BOGOF) deals start to lose their effectiveness too. “It's not that older consumers aren’t aware of these deals, but their changing priorities mean they’re less influenced by them,” commented Linda van Rijn.
Older consumers, despite buying fewer products, are still prepared to pay more for their groceries. This makes them a commercially attractive segment, but only if retailers can adjust marketing strategies to meet the needs of older customers. Smaller stores, fewer promotions, and more convenience could be the key to tapping into this market.
So what do all these shifts mean for retailers and brands? The message is clear: ageing consumers are a unique and growing market, but they behave differently from their younger counterparts.
As shoppers age, particularly after 70, their shopping frequency and activity decline, but they continue to spend more on groceries, making them an increasingly valuable market. To tap into this opportunity, retailers and brands need to rethink their strategies and consider prioritising smaller, conveniently located stores, optimising store layouts for easy access, and offering products and services tailored to the preferences and needs of this growing demographic.
“My findings suggest that retailers and consumer packaged goods suppliers must adapt their marketing strategies to older generations,” she commented. Her recommendations for age-related marketing campaigns are:
She suggested that there’s more research to be done to explore the impact of ageing on online shopping, and the psychological changes that influence consumer decisions. More details about these processes would provide deeper insights for retailers to make strategic adaptations to their marketing campaigns. If brands and retailers don’t take these findings seriously, they may miss out on capturing the loyalty of a significant and growing demographic.
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Rotterdam School of Management, Erasmus University (RSM) is one of Europe’s top-ranked business schools. RSM provides ground-breaking research and education furthering excellence in all aspects of management and is based in the international port city of Rotterdam – a vital nexus of business, logistics and trade. RSM’s primary focus is on developing business leaders with international careers who can become a force for positive change by carrying their innovative mindset into a sustainable future. Our first-class range of bachelor, master, MBA, PhD and executive programmes encourage them to become to become critical, creative, caring and collaborative thinkers and doers.
