|
 Online shopping is not just for younger consumers. Growing numbers of the over-50s are turning to the internet for their shopping needs according to IGD’s latest report, The Golden Generation. IGD analysts Michael Freedman and Gavin Rothwell outline the potential of this market.
We’re not getting any younger...
Already totalling 21 million and accounting for 51% of total grocery spend, the over-50s population will grow by 4 million in the next ten years according to IGD’s latest report, The Golden Generation. Few businesses can afford to ignore a section of the population that is becoming much more technology-savvy, as growing numbers of older shoppers embrace the internet. In 2006, just 18% of over 65s had used the internet, but in just two years this has grown to 30%, and prospects for further increases are strong.
 |
| Online shopping is growing in appeal to older shoppers | |
 | |
Older shoppers want to buy more groceries online
Over the past two years, the number of over-65s shopping online has doubled, easily surpassing the already highly impressive increase of 25% across the adult population as a whole over the same period. This is making it a real opportunity for grocery suppliers and retailers.
Six per cent of over-50s are already shopping online for groceries, and there’s further potential beyond this with a further 27% - representing 5.7m potential customers – saying that, under the right circumstances, they could be attracted to online grocery shopping.
But what lies behind this?
We’ve seen leading grocery retailers placing a greater focus on developing their online propositions over the past two years, and there are some significant improvements coming through.
Websites are more customer-centric, faster to use and easier to navigate, and of course, increasing broadband penetration has played an important part in this. It is now easier to find offers online, and at times you can even get free delivery if you can be flexible over delivery times - an advantage that many older shoppers have.
This development will continue – Asda for example has recently announced it will relaunch its grocery website at the start of 2009, building on the significant infrastructural progress it has made over the past year. Others too are making enhancements, for example, providing greater reassurance on shelf-life and product quality, linking in their transactional websites to recipe tools and better communicating their promotions online.
How can retailers take advantage?
• Deliver more on value: Forty-eight per cent of those questioned want better prices. The main incentive would be to waive delivery charges, mentioned by a third of all shoppers aged 50 or over who would start to shop online or increase their online grocery shopping if this was an incentive. These shoppers also want reassurance that shopping online isn’t more expensive than in-store (19%), or that they can get the same promotions and price reductions as they can get in-store (12%).
“It does not show me the full picture of the store. It won’t tell me that next to the butter I normally get is one that is reduced by 50%.” Barnet, aged 50-65, BC1
• Deliver improved customer service: The ordering process is another key area in which older shoppers wish to see improvements. This includes having greater security against ID fraud (22%) and providing shoppers with a better view of products they were choosing and not just a list (12%).
Service is also important, with 12% prioritising a quicker ordering process, and 11% highlighting someone to help them to order online.
• Better target the product offer: Around four in ten (39%) require more confidence in the quality and delivery of products. This includes knowing that the right products will be delivered without any missing items or mistakes (19%); knowing that the selected products would be of good quality (18%); and having confidence that the products delivered had long use-by or best-before dates.
Four in ten of these shoppers would shop online if they were no longer able to get to a supermarket because of infirmity.
“I have not tried it. I like to see the things that I am buying. I suppose when I can’t go out that would be different.” Sainsbury’s shopper, aged 75+, BC1
Where is the opportunity?
The internet is becoming more important for many of us as we become more familiar with sites such as facebook, myspace and linkedin. We’re also witnessing the growth of sites such as www.kaboodle.com in the US, where virtual communities recommend products to one another. More niche retailers such as Hotel Chocolat are really looking closely at how they can use online – with online communities being developed in addition to the transactional and information functions of the sites.
In short, we’re seeing a situation where, in the future, the internet will become more important. Retailers and suppliers need to understand the key dynamics, how the market is evolving, what different groups of customers are looking for and the potential routes of development open to them if they are to maximise potential in the online arena. Clearly the over-50s are emerging as a particularly key group. Greater consideration of ‘silver surfers’ will become a more important driver or success for many in 2009 and beyond.
More information:
 |
The Golden Generation |
|
|
The over-50s are one of the most adventurous and experimental groups of shoppers. Our time-saving one-stop guide to this generation of shopper will enable you and your team to identify the real appeal of this key market and the extent to which you are under trading with them. |
| |
|
 |
UK Grocery Retail Outlook |
|
IGD's in-depth guide to the UK grocery retailing sector, with grocery market size & structure, emerging grocery sector trends and five-year market forecasts. |
|
