CommPRO Editorial StaffAmericans aged 50 and older account for 51 cents of every dollar spent in the United States and generate $7.6 trillion in annual economic activity, which makes this demographic equivalent to the world’s third-largest economy.⁽¹⁾ And with the 50-plus population projected to grow from 115 million in 2018 to 132 million by 2030,⁽²⁾ their financial clout will likely continue to grow. While many brands have made millennials their top target, Chargebacks911—a dispute mitigation and loss prevention firm—advises merchants not to overlook older consumers, whose purchasing power offers a path to sustainable profitability.A new AARP report projects that as of 2030, adults 50 and over will spend $84 billion on tech products.⁽²⁾ Computer penetration among this group is 91%, smartphone ownership rose from 70% to 75% in one year, and 49% own a smart TV, with another 9 million planning to buy one this year.⁽²⁾ Visa forecasts that consumers over 50 will be responsible for 51% of aggregate spending by 2020, while under-35 millennials will account for just 19%, falling to 18% by 2025.⁽³⁾ In fact, Visa’s 2018 holiday outlook suggested that Generation X and Baby Boomers are already outspending millennials by a ratio of nearly 4 to 1, with the under-35 demographic contributing just 21% of holiday sales.⁽⁴⁾“As brands rush to win over millennials, many are losing sight of a more lucrative audience,” noted Monica Eaton-Cardone, co-founder and COO of Chargebacks911. She points out that Gen-X consumers have started moving into the 50-plus age bracket over the past couple of years—a transition that should redefine how businesses approach this population segment. “Rather than focusing the bulk of marketing budgets on millennials and new prospects, merchants would be better served by diversifying their spend and allocating a larger portion to the over-50 crowd and to retention of existing customers.”PaymentsSource recently identified specific challenges in pursuing younger consumers: “they are costly to acquire, have fewer financial assets and hold little to no brand loyalty.”⁽⁵⁾ The publication warns that focusing too heavily on customer acquisition could leave a firm “vulnerable to losing its more profitable, long-term clients—many of whom tend to be older.”⁽⁵⁾ An Adweek analysis supports that conclusion, reporting that it is five times more expensive to acquire a new customer than to retain a current one, while the probability of selling to existing customers is 60% compared to just 5% for new prospects.⁽⁶⁾  Eaton-Cardone cautions that the risk of fraud can grow if merchants place greater emphasis on quantity of customers over quality. If a large proportion of new customers prove to be one-time purchasers drawn by loss-leader deals or if they initiate a high number of returns, refund requests or chargebacks, a merchant’s losses could exceed the value of those sales. This issue appears to be particularly problematic in the online sector. For the retail industry as a whole, 18% of fraud losses are due to chargeback fraud and 20% to fraudulent refund requests; yet for eCommerce merchants, those figures are 30% and 27%, respectively.⁽⁷⁾ In addition, fraud costs as a percentage of revenues average 1.8% for all retailers but climb to 2.38% for eCommerce merchants.⁽⁷⁾  “If brands begin shifting more of their marketing budgets to older consumers and retention of existing customers, it could pay off handsomely over the long run,” asserted Eaton-Cardone. “Young consumers may not be the ‘holy grail’ many believe them to be; it could take years until they develop more responsible spending habits and brand loyalty. In the meantime, it’s critical to identify your most profitable target audiences, invest in your most loyal clientele, and proactively fight fraud and other ‘profit parasites’. Ultimately, these steps offer the most direct path to sustainable profitability.”Below, Eaton-Cardone shares a few tips to engage older consumers and current customers:

• Use social media as a lower-cost way to reach millennial consumers, and place paid ads in media that appeal to older consumers with greater spending power.
• Don’t limit your best offers to new customers only; show some love to your existing customers to encourage repeat purchases.
• Monitor reviews and social shout-outs to identify your brand champions, and solicit their feedback and suggestions. If you implement their ideas, be sure to credit and/or reward them.
• Newsletters can help you stay top-of-mind with past customers, but make sure those communications provide value rather than just sales pitches to avoid unsubscribes.
• Include an upgrade or unexpected gift when you fulfill orders for your best customers, which can boost loyalty and prompt word-of-mouth referrals.

1. AARP. “AARP, at CES 2019, Showcases $7.6T in Annual Economic Activity From Americans Age 50-Plus”; press release issued January 8, 2019.
2. AARP. 2019 Tech and the 50+ Survey; January 2019.
3. Best, Wayne. “Gray Is the New Black: Baby Boomers Still Outspend Millennials”; Visa U.S. Perspectives; December 2016.
4. Visa. 2018 Holiday Spending Outlook; November 2018.
5. Moeser, Michael. “Data: How Older Shoppers Use FinTech”; PaymentsSource; January 23, 2019.
6. Brown, Michael and Kinshuk Jerath. “How the Marketing Technology Landscape Will Transform in the New Year”; Adweek; January 2, 2019.
7. LexisNexis Risk Solutions. 2018 True Cost of Fraud Study; August 2018.