Over-55s and the new customer experience

As part of our in-depth study into changing consumption patterns of over-55s since the onset of Covid-19, we interviewed Scott Logie - Customer Engagement Director, REaD Group for his thoughts on how this age group is embracing online shopping, and what brands and retailers must do to maximise the opportunity.

Q: Are you surprised by the current shift to digital shopping among over-55s?

A: Not really, but they have been forced to. My own parents have become more digital, for example, because of things like shopping and using Zoom.

It’s now about building the right experience. Think about travel. It made people go online whether they wanted to or not. It was the only way to get cheaper flights and holidays. Once they were educated that it wasn’t as difficult as it might have seemed, it became normal for them. It’s the same with Netflix - once they use it the fear goes, and everything they ever wanted to watch is on there.

Remember they’re not digitally native, you’re asking them to do something different and outside of their comfort zone.

Q: So will the same happen in retail?

A: You now have an educated group of consumers who start to think they could go online to buy things they need, and you can reinforce that with your marketing, making them more naturally keen on digital.

But this creates a threat for the high street. Fewer people below 40 want to go into shops, and if the same is now true for over-55s, what does that leave you with? Charity shops and cafés - the end of retail as we know it. M&S has just laid off 700 staff because its customers want to shop online; who would have believed that even a year ago?

Yet while people are becoming more digitally savvy, one of the things they still crave is human experiences. One of the challenges for retail and eCommerce is to humanise the engagement, particularly with this group.

If they want to chat, they want to chat to a person, about price and options, and so on. You can’t do that with an automated chat function yet. But you could retain shops and teach people to use both at the same time.

Q: How will retailers and brands create a satisfactory online experience for this age group?

A: They will need to experiment with customer engagement and experience, depending on product type. It won’t be the case for a packet of biscuits but is important for an expensive item of clothing or an electrical item. Getting people comfortable with this type of engagement is a big shift away from what they’re used to.

It’s not just about having a traditional call centre either. Brands might put a Zoom link on their direct mail, so rather than phoning an operator you actually get to see someone from the customer service team. It creates a more personal engagement. This age group still responds well to direct mail, so tying that to digital should work well. 

Q: Do you think brands and retailers consider the needs of over-55s important?

A: Not long ago, this group wasn’t really taken seriously. Part of the problem in the past was marketing was a young person’s game; everyone thinks consumers are like them. That bias hasn’t helped.

When Saga set up as an over-50s business, people laughed. Look how successful that’s been. Nowadays there are a lot of brands and consultancies dealing with this age group. There are a lot of consumers there, and they hold a lot of wealth through better pensions and financial planning. That is more likely to be the case after Coronavirus; they will have even more spending power than younger groups. 

The industry talks about over-55s as being one group. But to treat 17 million people in the same way is madness. Segment and research them as a non-homogenous group of people, from the cash-strapped to the well-off.

Q: What do you make of the results of our survey which show word of mouth isn’t an important marketing channel for over-55s?

A: Not many of their friends have been shopping online so far, but I wonder if you asked them again in a few months’ time whether there would be a different result around word of mouth?

Also, if you split friends from family in this age group you get different outcomes. In financial services, for example, I’ve seen strong evidence in data that children are recommending products to their parents.

Q: Given everything we’ve discussed, do you think over-55s will keep shopping online - and stay for good?

A: How it settles down is key. These consumers have learned to buy online with the fear removed. The opportunity is for brands to keep them engaged. How do eCommerce providers quickly stop people defaulting back to shopping in-store?

John Lewis, for example, has decided not to reopen all of its stores. That must be because enough of its audience is going to stay online. They couldn’t afford to lose those customers, so they must believe they will keep buying online. It’s quite a surprising move but they must have the data to back it up.