Retail | Trends
How are older consumers reacting to the post-lockdown world?
As lockdowns have lifted in many countries, safety concerns are causing the more mature generation to react in different ways to younger drinkers. Lucy Britner looks into how this might spell trouble for certain areas of the off-premise, while extra caution among older consumers will drive growth in other areas.
In the near term at least, health concerns and continuing uncertainty around the Covid-19 pandemic are keeping many of the older generation away from the on-premise. According to research in the UK, for example, older people are particularly concerned about safety and more anxious than most to see precautions in place when it comes to returning to pubs, bars and restaurants.
Recent research, coordinated by insights group CGA, data analytics platform Yumpingo and trade association UKHospitality to gauge post-lockdown opinions, found that while three-quarters (78%) of 18-34 year-olds thought safety measures were extremely clear, only three in five (60%) 55+ year-olds felt the same.
"Younger adults are leading the return to hospitality, and operators have done a great job in demonstrating their rigorous precautions and hygiene protocols," says Rachel Weller, CGA's head of consumer research & marketing. "Given their greater vulnerability to Covid-19, it's not surprising to see that older people are more anxious about going out and are more demanding on safety.
"Securing these older demographics' spending will be crucial to hospitality's recovery, and it's vital to show them that their concerns are heard and that they are in safe hands."
Drinks companies keen to see a return of the more mature cohort to bars, pubs and restaurants should consider working with venues to communicate safety measures or target off-peak occasions with specially-created menus or added-value events.
Online opportunity
While older consumers may be making a more cautious return to the on-premise, the demographic has grown far more comfortable with online purchasing.
Overall, PricewaterhouseCoopers says this segment of the population is more tech-savvy than it was two decades ago: In 2000, only 14% of older adults were online. Now, the US arm of PricewaterhouseCoopers estimates 73% of the market's older adults are online, while some 50% own smartphones.
In fact, in a note following Amazon's Q2 results, released at the end of July, analysts at SunTrust Robinson Humphrey told MarketWatch that "older demographics, who had under-indexed to ecommerce pre-pandemic" had helped drive positive trends for the ecommerce giant in the three months to the end of June. Moreover, the analysts predicted that the older demographic will likely continue to spend online amid persisting health concerns.
Over in China, retail companies have been working to embrace this trend. According to research by Mintel, only 12% of Chinese consumers over 55 were shopping online in 2019, while just 5% ordered their food online.
Research suggests that in the current environment, there have been many efforts to bring more seniors online to shop and to cook. For example, supermarkets in China are providing a more simple online shopping experience to make the process easier for less tech-savvy consumers.
With this in mind, drinks brands should consider working with retailers to make online transactions feel safe and simple, leaning on trusted brands to guide shoppers through the experience.
Spending power
While older consumers might be reticent to venture out to bars and restaurants, the coronavirus pandemic has encouraged more of every generation to shop online. Research suggests that not only are the older generation getting on board with online shopping, they're also spending more in the process.
Therefore, the differences between consumer groups and their spending habits will continue to make older consumers more appealing for online retailers. Indeed, in the UK, Mintel research suggests the older generation will be a driving force in market growth for ecommerce in the coming months.
A generational divide will arise as a result of Covid-19.
"A generational divide will arise as a result of Covid-19," the company said in a recent report. "Many older consumers have been forced to engage with online retailing, as they're part of the population especially at risk from the pandemic.
"While Generation Z and Millennial consumers are likely to continue to be the driving forces of the market as the leading online shoppers, they will also be more likely to be cutting back on non-essential spending than older groups. As a result, online retailers, and indeed courier services, are more likely to rely on new business from older consumers in the short to medium term."
Other trends around loyalty and trust will come into play, too, especially as scammers look to take advantage of more inexperienced internet users. Just like the return to the on-premise, this will make messages around safety paramount, especially if those 'short to medium term' consumer trends are going to last any longer.
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