Seniors and E-Commerce: Selling to the Older Shopper

Part I: The stereotype of the older Internet user is far from flattering. But online merchants are wise to look beyond this stereotype.

Editor's Note: James Maguire's weekly eBiz Profiles will no longer appear. Beginning today, Monday, Sept. 9, we will have a weekly feature written by Mr. Maguire focusing on industry trends, online business basics and more.

The stereotype of the older Internet user is far from flattering. Those surfers, who are age 65 and older, in the eyes of some younger users, are seen as doddering and easily confused. Simply booting up a PC and navigating a browser is challenging for them, much less handling the complexity of online shopping.

But online merchants are wise to look beyond this stereotype. Seniors are a lucrative market that e-tailers can't afford to ignore, notes Jakob Nielsen, a leading Internet usability expert. The reasons are numerous: "The total number of seniors is growing, the percentage of seniors online is growing, and the percentage of online seniors who shop is growing — so you have three things that are all growing together. So senior shoppers online are really going to be growing," says Nielson.

In fact, this group of shoppers is increasing more than any other group, he says. Internet use "is close to saturation among other parts of the population. If you look at teens or people in their 30's, if they're going to get a computer, they have it by now," Nielsen notes. "But if you look at where the growth is going to come from in the next ten years, it's going to come almost only from adding seniors to the Net population."

All those factors make seniors an attractive market, but one key fact makes them all but irresistible, he notes: "The amount of discretionary money controlled by seniors is growing."

Grandma Goes Shopping
According to data from the U.S. Census Bureau, there are 36.7 million Americans who are 65 or older. But estimates of the total size of the senior online market vary.

Nielsen/NetRatings, in March 2005, indicated a senior online audience of 11.8 million, while comScore Media Metrix that same month used the figure 7.9 million senior Net users. The Pew Internet & American Life Project, in February 2005, stated that 26 percent of seniors go online, which points to a senior audience of about 9.1 million.

How many of these seniors are shopping? According to Harris Interactive from July 2004, 59 percent of online seniors shop on the Internet. This is far less than those who use e-mail (98 percent) and use search engines (90 percent). Pew data from January 2005 claims 50 percent of online seniors have purchased on the Net.

The senior market online is expanding, says Forrester analyst Lynne Bishop. Over the least three years, "You see about 9 percent of seniors newly coming online within the year," Bishop says. Moreover, "the percentage of seniors who go online daily is growing," she says, noting an increase from 21 percent to 26 percent in the last two years. (Data from the Kaiser Family Foundation puts senior daily usage at 46 percent; Pew puts it at 49 percent). Broadband usage among seniors is jumping still faster, Bishop says, increasing from 20 percent two years ago to nearly 30 percent this year. "Broadband correlates to doing more online," including shopping, she notes.

Underneath these still relatively modest figures lays a much larger figure. While no statistics reveal the total wealth of senior Americans, recent data states the population of Americans 50 and older control more than $47 trillion dollars, and holds 50 percent of discretionary income. Whatever exact share of this fortune is controlled by seniors, it is surely considerable.

Underserved Market
The veritable fortune held by older folks is not being fully tapped online, Nielsen notes.

"My data shows that they [seniors] are not being catered to very much," he says. His research firm has created reports that focus on the online shopping habits of various groups, including teens and seniors. Based on the number of businesses that have bought reports for each age group, "there is three times as much interest in catering to teenagers as for seniors, even though in terms of money, there's probably 10 times as much money to be made from seniors."

Much of advertising focuses on romancing younger consumers, knowing that these shoppers' buying habits have not yet been fully formed.

However, "Spending habits online are certainly not yet set for seniors because they haven't done it very much yet," Nielsen says. "And when you get them they can become very loyal customers — if there are given good service."

Catering to Seniors
Senior Internet users are often "more tentative," says eMarketer analyst Debra Williamson, "especially those who didn't use the Internet at work." On the other hand, Williamson recently learned of a 103-year-old woman — probably the oldest Net user — who e-mails and writes books on her Macintosh computer.

The difference in user skills between young and old users is large, Nielsen notes. "About a hundred percent difference, or a factor of two. To have a 40-year-old person and a 70-year-old person use a Web site, the 40-year-old is typically twice as fast."

"So if you think of that in terms of the potential sales to the 70-year-old person, if you can cut away some of the bigger [site design] issues that are really hurting them back…we're talking about big potential."

To optimize commercial appeal for older users, be aware of the following:

  • Font size Declining eyesight calls for a larger font size. But e-tailers don't need to present oversized text to all their users. Instead, use adjustable fonts in designing your site. (Every browser allows a user to enlarge font size to the size they like.) Most important: don't allow your chic Web designer to use the "frozen" option. "It's amazing to me how many sites use frozen font sizes, and typically small," Nielsen notes.
  • High contrast background-foreground It's easier for someone with poor eyesight to read text that contrasts greatly with its background; for example, black text on white background. "A lot of Web designers think it looks cooler if the text is small and subtle — and you can't read it," Nielsen says.
  • Navigation signposts Because of seniors' problems with short-term memory, a site's navigation must provide users with "bread crumb" signposts. Navigation bars should offer a link trail that says Larger Category > Smaller Category > Subject Page. Users shouldn't have to remember where they are — each page should tell them. Also, "have clear headlines, so that when you arrive at a page you're reminded about what this page is about — you don't have to remember 'Why am I trying to click through here?'" And, in the checkout process, make it clear: "'Here are the four steps, and you're on Step Two of Four,'" Nielsen says.
  • The three-level menu: it's a No-No Some sites offer navigational menus in which a user clicks on a link to reveal a menu, which then rolls out to reveal sub-menus. Bad idea. For users with lessened motor skills, who may not be PC veterans, this is frustrating. "We have videotape of somebody trying to select an airline off a list of airlines, and watching the poor user trying to get to the bottom was sad," Nielsen says.
  • Colored Links It was once standard that a link that had been clicked on changed colors, but Web designers have moved away from this. Yet changing link colors helps senior users. "If you have a list of 10 places and you've already been to two of them, that visited link color helps so you don't have to remember."
  • Avoid double windows Many sites open a new browser window when a user clicks on certain links. This obscures the original window, which is okay for younger users, "but for someone who's less tech savvy, it's 'Oops, it blew up and I lost my window,'" Nielsen says.
  • Search engine marketing To reach seniors through search marketing, it's more effective to use AOL than Google, Forrester's Bishop says. AOL is "more newbie friendly, seniors tend to like AOL a little bit more, whereas Google is for the savvy user."
  • Legal disclaimers Senior users can be hesitant, but they're also more dutiful than younger surfers. "For example, they'll often read through the disclaimers and legal text, which otherwise no one reads," Nielsen says. "A lot of sites know that nobody reads them so they feel they can stick anything in there." But because some seniors actually read online disclaimers, "it's important to have simpler and clearer text for those agreements — try to keep it short," he says.

 

Key Sectors
A number of online sectors will see particularly large increases in senior shoppers: finance, travel and healthcare will benefit.

In the healthcare sector, it's important to integrate offline resources to build trust, says Forrester's Bishop. "If you, as a new content provider or new vendor, want to target them, you need to make a cross-channel effort," she says. "You need to make sure their doctors, their pharmacists, all these trusted parties, know about you."

She gives the example of WebMD magazine, the print publication that compliments the Web site. The print magazine is distributed in doctors' waiting rooms. Seeing something like that in the doctors' office is a marketing coup for the WebMD site, she says.

Also seeing growth in senior shoppers will be "any kind of hobbies, anything from military history to knitting," Nielsen says. "It's targeted niche sites. If you live in a small town in Ohio, the local bookstore isn't going to have a great selection about military history, so the Web can really sell a lot of those specialized products."

Whatever the special needs of seniors, patience by e-tailers is rewarded. "It takes a while before they turn from being browsers to being shoppers," Nielsen says. "We've already had a big growth in the last five years of seniors online — those are the people who are now primed to become shoppers."

Next week: How to reach the senior market of tomorrow.

James Maguire is a contributor to ECommerce-Guide.com. His weekly feature appears every Monday.

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