‘The charmed generation’: UK businesses recognising a unique market worth GBP1 billion
UK businesses are waking up to the value of the Charmed Generation, a group of two million over 55 year olds with the highest disposable income of any other consumer age group, it was revealed today.
Research from Royal Mail and 20plus30 Consulting has estimated the net capital worth of the Charmed Generation is GBP1 billion – a level of wealth for over 55 year olds that will not be repeated in future generations.
And businesses are increasingly recognising the spending power of the group that leads the way in buying luxury goods and services:
• Half of new car purchasers are made by over 50s
• 55+ aged women spend 20 per cent more on clothes each year than their 35 year old counterparts
• The Charmed Generation takes 37 per cent more holidays a year than any other age group.
• The over 50s market is the fastest growing segment for both volunteer holidays and the youth hostel sector
• They are the second fastest growing market for ‘round the world’ trips
• They are increasingly becoming the source of finance and buying influence for their children and grandchildren’s purchases.
This group of cash-rich consumers has evolved as a result of affordable housing in the 1960s, with properties significantly appreciating in value over the decades, defined-benefit pensions, family legacies and prudent spending during their youth, including little reliance on credit.
Advertising to the Charmed Generation is now on the increase – demonstrated by a rise in direct mail to that age group between April and June of 15.8 per cent on the same period in 2005.
Dick Stroud, Managing Director of 20plus30 Consulting, said: ‘I find it incredible that a lot of advertising and marketing activity is directed towards what is now coined the iPod generation, when in fact iPod should stand for insecure, pressured, over-stretched and debt-ridden.
“They have less disposable income due to factors such as the high cost of housing and active social lives – in other words the absolute opposite of The Charmed Generation. But companies now seem to be realising the value of this group.”
Royal Mail statistics show that ‘The Charmed Generation’ has the highest response rate to direct mail (over 16 per cent) of any group of consumers. Forty two per cent of this age group have said that in the last six months a mailing enticed them to become a new customer of a company and 48 per cent said a mailing had encouraged them to buy from a company they already use, indicating high levels of brand loyalty.
Alex Batchelor Marketing Director of Royal Mail, said: ‘The Charmed Generation is an audience that has been largely ignored by UK business, but they are waking up to their value to them as customers and the wider economy.
“Businesses with relevant products and services from holidays to financial services should be investing the time to understand exactly what motivates this audience and how to market to them. Past stereotypes of the retired pensioner are very difficult to apply. For example, statistics show that The Charmed Generation spend 14 hours plus a week online.”
He added: “Over the next decade the number of people aged 50-69 will in increase twice as fast as those aged 18-34. Consequently, there has never been a better time for businesses to start engaging with this enormously profitable market.’
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