THE AGING OF AMERICA

The Rising Tide

BY JENNIFER N. BROCK

When asked to describe the changing relationship between the senior population and the business community,

marketing professor George Moschis is quick to offer an example. "There is a model named Ann Roberts; she was very popular in the late '60s. At age 25, she lost a job to a 20-year-old model and thought that her career was over. Today, at age 52, she has a six-figure contract with Oil of Olay."

Moschis' example leads to questions regarding the reasons behind this shift in attitudes and actions. Are seniors redefining the concept of growing older and thus refusing to be excluded, or are companies realizing that they are only hurting themselves by ignoring a viable group of consumers? According to Moschis, both statements are true, but the phenomenon is not that simple. Changes in technology and the environment, longer life expectancy, economic strength and various marketing tactics all play a role in the study of the mature consumer.

As director of the Center for Mature Consumer Studies, Moschis is one of the leading experts on the consumer habits of senior citizens. He has studied their spending patterns, conducted surveys and focus groups on their preferences and compared them by race, sex, age and lifestyle factors. He knows what they spend money on, and often of more interest, he knows why they spend money.

This focus on seniors came as Moschis noticed dramatic changes in the demographics of this country. "In marketing, we recommend that companies adjust to environmental and demographic changes," explains Moschis. "It's important to foresee these shifts and be proactive in dealing with them." He realized that the senior population was going to have a number of effects on society and the economy and found a new area of research to pursue. Armed with his marketing background and a year of postdoctoral study in gerontology, Moschis began to discover some fascinating, and often surprising, information about mature consumers.

One of the most important and dramatic changes is that the stigma associated with being old is disappearing. Seniors are proud of their age and society's attitude is reflecting this pride. Today's senior can be active and productive Ð two qualities greatly respected in any age group. There is a new type of respect for the mature population due in part to seniors' increasing awareness of companies' interest in them, and their becoming a force in the marketplace.

Buying Power

Society is becoming more accustomed to seing older faces, and advertisers are realizing that a teenager cannot sell every product to every segment of the population. The inclusion of seniors in market research and in marketing campaigns is a drastic change from 20 years ago. "In the '70s, less than 2 percent of commercials had older spokespersons in them and Nielsen did not gather data on anyone older than 50 until 1979," Moschis says. In answer to today's changing demographics, marketing campaigns increasingly emphasize the older population. Seniors are being portrayed as role models and are shown in a number of situations and lifestyles.

The senior population has already affected certain segments of the economy. According to Moschis, mature consumers are spending three times the national average on health care products and services. Another sector feeling the impact of this generation is the travel and leisure industry. With both the free time and the money to travel, seniors are having great effects on the travel business. For example, Moschis has found that the average age of guests on a cruise is 67.

Along these same lines, the main purchasers of luxury automobiles are in the 55 and older age category. Although addressing the senior generation as consumers, the automobile industry still has lessons to learn from Moschis' research. "The industry, both in commercials and in showrooms, concentrates its attention on the man," says Moschis. "But studies show that the older the couple, the more likely the woman is to assume responsibility for major financial decisions such as car purchases."

Today's seniors are educated and sophisticated, and they have a strong need to remain independent. "They are in touch with the importance of saving and investing, and they are realistic about the choices the future may hold," says Moschis. "With the advances in medicine, many people are living longer with chronic health conditions, and seniors are sensitive to unexpected costs and the high price of long-term care."

High-Tech Savvy

Technology has advanced rapidly and dramatically in the past decades, and this has greatly affected the senior population. Each generation is influenced by its environment, and today's seniors have been exposed to a plethora of opportunities and innovations. "Television was unknown to previous generations, but by the time the baby boomers reach age 65, they will have spent a total amount of 11 years in front of the television," Moschis explains.

The senior population also is becoming comfortable with technology such as computers and the Internet, both because they are more technology-prone in background and because the technology itself is becoming easier to use. Although growing, the percentage who use the Internet is still relatively small, mainly because the majority do not have a lot of use for the products and services offered on the Internet.

However, this could change as organizations and companies create a greater senior presence on the Web. "Seniors are very results oriented. If you show them benefits, they will use the Internet," says Moschis. The American Association for Retired Persons (AARP) has a very successful Internet site that offers information and resources important to seniors. Once seniors do become involved in Internet technology, they are devoted participants who can commit great amounts of time. In fact, seniors who have access to the Internet are twice as likely as younger people to use the technology, according to Moschis.

With the growth of telemarketing and companies purchasing databases, seniors would seem to be at greater risk for becoming prey to fraudulent activities. Although the media portray them as being victims, research has found quite the opposite scenario. According to studies by the AARP and the Center for Mature Consumer Studies, seniors do not have an increased susceptibility to being victimized, and in fact, younger people are four times as likely as seniors to be "scammed."

These findings are actually not that surprising, says Moschis, given that wisdom comes with age. "Older people don't expose themselves to risk and they have learned defensive strategies over time. Experience is worth a lot and they have learned lessons that protect them from many situations." Seniors will not open doors to strangers and rarely release information over the phone. They patronize reputable stores, use referrals and buy brand names, and avoid new and uncertain things: most of them live active yet low-risk lives.

The Future of Business

As consumers, seniors possess financial resources, make educated decisions and are loyal to their chosen service providers. These qualities, and their increasing longevity, make them model customers for most businesses. In regards to the future of marketing to mature consumers, Moschis feels that traditional marketing theory will hold true. "For companies to be successful, they have to advertise to the majority of the population with a high discretionary income," he explains. "So we'll see an increase in older models and companies will have more opportunities to address seniorsÕ needs, not for PR but for profit."

Due to the longer lifespan experienced by people, companies have even greater opportunities to segment the population and specifically address the needs of different groups. However, many seniors do not like labels and titles that reflect the ideas associated with traditional stigmas about age. Businesses must respect seniors and not be patronizing in their attempts to cater to them. "We need to have more sensitivity to aging issues and market through themes that are important to all generations," Moschis explains.

The business world is adapting and responding to the demands of a senior population that possesses confidence, self-awareness, financial security, intelligence and an unprecedented joie de vivre. The effects of the senior population reach farther than the marketplace, however, because the aging of America is truly the reshaping of America. And, as with all pivotal events in history, the emergence of this newest culture of seniors promises to leave a lasting impression on life as we know it.

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