Introduction 

The ‘grey’ consumer market (55+ years old) is enormous. According to Nielsen¹, older people (i.e. baby boomers) account for 70% of the US disposable income and constitute almost 50% of the country’s retail sales. Yet, advertisers are regularly admonished for apparently focussing on younger consumers, and older consumers report feeling neglected by marketers². 

A possible explanation for marketers’ actions is that they believe older consumers are ‘set in their ways’; that older consumers, having more purchase and consumption experience over time, have more ingrained habits compared to younger people. Older consumers may be more inclined to repeat their brand choices from a long-standing repertoire of older brands that they have bought for many years and as such, their behaviours are harder to change. 

In this report, we examine this belief by investigating the brand buying behaviour older buyers (>55 years old) compared to younger buyers (<55 years old) across a range of consumer packaged goods (CPG) brands. We approach this issue from two perspectives:

(1) Do older consumers buy older brands more often than younger consumers?
We compare competing brands’ loyalty metrics for different consumer age groups; and

(2) Do older brands have a disproportionate amount of older buyers?
We compare competing brands’ user profiles according to brand and buyer age.

Data

We analysed 15,000 UK consumers’ purchases³ for 60 brands in 2010 and 2014. Six categories were explored: deodorant, shampoo, skin care, yellow fats, cooking sauce and dog food. It was important that the categories contained brands with varying launch years to compare older and younger brands, and to enable us to compare a brand’s launch year to a consumer’s birth year. Brand age is treated as being relative to consumers’ age in order to estimate which brands consumers have had more exposure to throughout their lives (i.e. if the brand has existed since the buyer was born⁴) and how this affects their current buying.

The following metrics are used in this report:

• Average Purchase Frequency (APF) – The total purchases of the brand divided by the number of buyers who bought the brand at least once.
• Share of Category Requirements (SCR %) – The proportion of a buyer’s total category purchases that the brand fulfils.
• Average Absolute Error (AAE) – A measure of divergence of each brand’s user (age) profile across the category.

All tables presented in this report are ordered from the newest to the oldest brand.

Finding 1: Older consumers do not buy older brands more often than newer ones

Across the categories tested, the average purchase frequency (APF) showed no signs of older consumers purchasing older brands more frequently. Table 1 shows an example in the deodorant category. We might anticipate to see the biggest deviation departures for the oldest brand (i.e. higher APF for Old Spice or Imperial Leather from older consumers). In fact, we see do not see higher APF among older consumers for the oldest brands. For all of the older age groups, the APF for Old Spice and Imperial Leather are actually under the average.

In most cases, the APF within a consumer’s age group for any brand follows the group’s average APF. Consumers aged 18-24 had the lowest APF among all groups at 1.7 occasions, this is reflected in the APF of this age group for every brand. Those aged 45-64 y/o had highest APF (2.6 times) – they buy all brands slightly more often irrespective of the brand’s age⁵. 

When compared to the category purchase rate, bigger brands have higher repeat purchases from buyers of all ages, such as Lynx and Sure.

Table 1: Average purchase frequency for deodorant brands (UK, 2010)

Finding 2: Older consumers do not principally buy older brands

There was no pattern of brand loyalty towards any particular newer/older brand based on consumers’ age profiles⁶. In the six categories, SCR⁷ scores typically move in line with market share (i.e. bigger brands have a higher SCR across all age groups, such as Simple and Nivea in the skin care category, illustrated in Table 2). We found consumers of all ages have brands of different ages in their repertoire, suggesting that older consumers do not show systematically higher loyalty toward older brands.

Categories that are purchased less frequently tend to show higher SCR scores as consumers have smaller repertoires in any time period. Table 2 showed lower SCR scores for older consumers in the skin care category, which is a reflection of their higher category purchase rate. However, at brand level, brand age is not an indicator for brand preference as we do not see older consumers purchasing older brands more so than others.

Table 2: Share of category requirements for skin care brands (UK, 2014)

Finding 3: Brands attract consumers of all ages irrespective of brand age

We found that brand user profiles across all six categories do not vary much⁸. 

Table 3 gives an example from the shampoo category of using AAE scores to compare each brand’s user profile to the average brand profile of the category.

Overall the incidence of deviations of more than 10% from the category profile is as follows:

• 10% of older brands had a higher number of older consumers.*
• 7% of older brands had a lower number of younger consumers.*
• 10% of newer brands had a lower number of older consumers.

* To simplify the comparison, older consumers are >55 y/o, hence, older brands are those >50 y/o. Younger consumers are <55 y/o, and younger brands are those brands <50 y/o.

In each category, deviations were rare and largely inconsistent, with the one exception being deodorant. Older deodorant brands (>50 y/o) skewed towards buyers of 65+ y/o and away from those 25-34 y/o, see Table 4 in Appendix.

While we found some skews among older or younger brands (8 out of 60 brands tested), there is not sufficient evidence to generalise that older brands tend to have higher number of older consumers compared to newer brands. This is consistent with previous findings where brand user profiles rarely differ across brands (Anesbury et al., 2017, Uncles et al., 2012, Kennedy and Ehrenberg, 2000, Hammond et al., 1996).

Table 3: AAE scores for shampoo brands (UK, 2010)

Implications

Overall, there is no consistent evidence to support that older consumers buy older brands more so than do any other age group for those categories tested. Consequently, older consumers should not be ignored as a market. Despite common beliefs that older consumers are ‘set in their ways’, it seems that their brand choices are not fixed. Although older consumers tend to be heavier purchasers in certain categories, as indicated by APF; they still buy other brands (e.g.  those that are mentally and physically available in-store) to fulfil their purchase needs for the category. It would be a missed opportunity to cease investment in brand communications or product development for older consumers, especially when baby boomers (those born between 1946 and 1964) account for such a large proportion of retail sales. 

Older brands (i.e. early entrants) may enjoy some benefits, such as higher market share and perceived as higher quality (Bronnenberg et al., 2009). However, such advantages will fade if brands rely on their legacy and fail to maintain a competitive presence in-market across all consumer age groups as we see no clear systematic relationship between brand age and market share. Newer brands will suffer if they fail to address older consumers; older brands will suffer if they fail to address younger consumers. This is especially the case for markets with low barriers to entry (e.g. CPG), where new competitors are introduced frequently. Evidence shows that brands compete with all available options as consumers of all ages seem to not exhibit distinct preferences for older or newer brands. 

It is therefore advisable for brands to build their presence and reach a broad market and get into consumers’ minds. That is, they must develop physical and mental availability to ensure brands are included in the purchase repertoire for all category buyers (Sharp, 2010). 

With thanks to Kantar World Panel for providing the data for this analysis.

¹ http://www.nielsen.com/us/en/insights/news/2012/dont-ignore-boomers-the-most-valuable-generation.html

² http://www.iclployalty.com/resources/retailers-at-risk-of-losing-valuable-baby-boomers/

³ Only individual consumer panel and single-person household consumer panel data were used, so the age of the specific buyer could be established.

⁴ “Old” brands are brands that have existed before the individual consumer was born.

⁵ Brand ages are based on the year of panel data (e.g. age of deodorant brands are based on year 2010).

⁶ SCR of 50% is a theoretical benchmark in repertoire markets. It is an exception for brands in repertoire markets to score above 50% in SCR. That is, a typical CPG brand is bought by its buyers less than half the time; the other half of the purchase occasions are shared among competing brands. See Report #1 for details on Dirichlet-type markets. 

⁷ The average SCR of brands are presented on the rightmost column (read horizontally to compare across age groups), and the average SCR of age cohorts are presented on the last line of the table (read vertically to compare across brands). 

⁸ Deviations are identified by deviation of +/-10% from the ‘average brand’. AAEs which deviate by less than 10% are unlikely to be managerially significant.

Appendix  

Table 4 shows user profile skew in older deodorant brands (older brands skewed towards buyers of aged 65+ y/o and away from those 25-34 y/o). Deviation over 10% (+10) are marked in green, and deviations below negative 10% (-10) are marked in italics red.

Table 4: AAE scores for deodorant brands (UK, 2010)