The End of Financial Year (EOFY) sale is one of the most critical moments of the retail year. Following 18 months of ongoing Covid-related hurdles, brands will be looking to take advantage of the uptick in consumer spending and will know that well timed communications, in the right medium, can be the difference between a customer converting their basket or switching to a competitor.
Despite holding substantial purchasing power, older Australians are often forgotten about as brands rush to target digitally-savvy consumers. While the delivery of high-tech communications is critical to reaching many customer groups, retailers also need to understand how they can better deploy mobile communications, to capture older audience groups that may otherwise become alienated.
Rediscovering an untapped market
Data shows that people aged over 55 control two thirds of Australia’s $2.3 trillion household wealth, meaning they have a significant amount of disposable income for brands to compete for. Research also shows that the wealth gap between younger and older Australians is continuing to grow, with the latter group now controlling 56% of national wealth, up from 48% in 2004. According to the RBA, this growth is occurring at twice the rate of other households, due to the changing household composition at this age and the increase in Australia’s ageing population.
Despite this, older age groups are rarely talked about when brands are considering their digital transformation plans and investment. Millennials, Gen Z and other young, digitally-native groups often capture marketers’ attention because they are willing to spend on new goods and services and may become long term customers when they do. But given their purchasing power, older Aussies shouldn’t be forgotten.
The key consideration for brands is how can they speak to this group effectively.
Who are your communications for?
Research shows that digital transformation investment is set to hit $6.8 trillion globally between 2020 and 2023. While there are some amazing examples of how chatbots are used in the real world, such as the ANZ bot that achieved a click rate three times higher than the benchmark, customers are also valuing human connection more than ever.
Months of physically distancing ourselves from our loved ones has had a greater impact than expected. Social connection is a vital human need, which was demonstrated through human behaviour during the early months of Covid-19. Research revealed that participants reported increasing use of communication tools to connect with the rest of the world. Notably, there was a 43% increase in the use of text messages, growth that outstripped all other communications formats.
So, is there more value now in using “traditional” communications methods? Research indicates that many older people reject new digital services because they are concerned about making mistakes, security issues, or simply that they don’t like the impact that digitisation has had on society. In a fast paced EOFY sales environment, this and the human connection craving is a key consideration brands should keep in mind for communications. Meaning companies racing ahead with chatbots as a silver bullet for digital communications should pause and think.
Keep things familiar
Although older Australians outpace their counterparts in the US and UK in using digital services, the frequency of use is far below those of other age groups, a result which could stem from unfamiliarity or the perception that substantial behaviour change is required.
While there is hesitation to embrace the new normal, a recent study found that there’s a 95% open rate on SMS for Australians aged 44-54 and that they are seven times more likely to respond to a text message than an email. By using tried and tested formats such as SMS messages businesses are meeting the critical need to keep this valuable customer group engaged.
The retail landscape is more competitive than ever and brands can’t afford to be using communications methods that only suit certain groups, therefore it is essential for businesses to start considering a holistic approach to communications and focus beyond just AI driven digital communications. This means putting SMS back on the table to ensure brands don’t lose access to an entire generation.
Matt Thompson is vice president of global marketing at Soprano Design.