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Empty nesters and financial servicesPublished by: Datamonitor Published: Jun. 28, 2005 - 64 Pages Table of ContentsTABLE OF CONTENTS CHAPTER 1 EXECUTIVE SUMMARY 3 Introduction 3 The future decoded 3 The number of Empty Nesters is growing 3 Important changes occur in Empty Nesters’ lifestyles 4 Price is a key driver of Empty Nesters’ consumption behaviors 4 Borrowing is becoming more of a way of life for Empty Nesters 4 Action points 4 CHAPTER 2 INTRODUCTION 14 What is this report about? 14 Who is the target reader? 14 How to use this report? 14 CHAPTER 3 THE FUTURE DECODED 16 Introduction 16 Trend: Empty Nesters are a rapidly growing group 17 The number of Early Empty Nesters is growing faster than the number of Late Empty Nesters 18 Empty Nesters change their attitudes and behaviors 19 Trend: Empty Nesters’ incomes vary according to age 21 High earning power boosts Early Empty Nesters’ disposable incomes 21 Late Empty Nesters’ disposable incomes suffer from retirement 22 Empty Nesters are a large, wealthy group that financial services providers should target 23 Insight: Price is a key driver of Empty Nesters’ consumption behaviors 23 In most purchasing decisions, an Empty Nester will compare price tags before buying a product or service 23 Age impacts the purchasing criteria of Empty Nesters 24 Empty Nesters have varying demands when they are picking their financial services providers 26 Providers must realise that price will get Empty Nesters through the door but customer service will be the key driver of retention rates 28 Insight: Borrowing is becoming more of a way of life for Empty Nesters 30 Of all seniors, Empty Nesters show the greatest willingness to borrow 31 Providers need to be aware of country-level variations in Empty Nesters’ borrowing preferences 32 Age impacts the attitudes of Empty Nesters towards borrowing 33 Insight: newly-found spare time means that convenience is less important for Empty Nesters 34 Increased control of their time reduces the need for convenience 34 Financial services providers can exploit Empty Nesters’ behaviors to maximize their revenue growth 36 CHAPTER 4 ACTION POINTS 38 Introduction 38 Target Empty Nesters’ attitudes, not their age 38 Use marketing campaigns to shift the “center of gravity” 38 Saga’s marketing strategy is targeting most Empty Nesters effectively 39 Use ageless marketing to target Empty Nesters 40 Focus product development around price 42 Companies can analyze Empty Nesters’ unique characteristics to design cheaper products 43 Communicate effectively with Empty Nesters 44 Play on Empty Nesters’ sense of pride 44 Do not patronize Empty Nesters and avoid stereotyping 45 Avoid using a ‘glitzy’ approach 46 Keep messages honest, transparent and literate 46 Provide information to satisfy Empty Nesters’ thirst for knowledge 46 Avoid being too negative in advertising campaigns 47 Focus on certain channels to reach Empty Nesters 47 Use partnership marketing to increase brand appeal 48 Charity credit cards have already been introduced to appeal to consumers with a social conscience 49 Target the growing willingness of Empty Nesters to borrow 50 Financial services providers should seriously consider offering equity release products 51 CHAPTER 5 APPENDIX 53 Supplementary data 53 Definitions 61 Research methodology 62 Future readings 62 Report writing team 63 Datamonitor’s custom research capabilities 63 LIST OF TABLES Table 1: Empty Nesters as a percentage of all Seniors, 1999-2009 17 Table 2: Number of Empty Nesters in Europe and the US (m), 1999-2009 19 Table 3: Annual per capita disposable income of Empty Nesters (€ & US$), 204-2009 22 Table 4: Decision-making criteria when purchasing a good or service 25 Table 5: Empty Nesters in Europe and the US (m), 1999-2009 53 Table 6: Late Empty Nesters in Europe and the US (m), 1999-2009 54 Table 7: Early Empty Nesters' disposable income as a percentage of the national average, 1999-2009 54 Table 8: Late Empty Nesters' disposable income as a percentage of the national average, 1999-2009 55 Table 9: Annual per capita disposable income for Early Empty Nesters (€ and US$), 1999-2009 56 Table 10: Annual per capita disposable income for Late Empty Nesters (€ and US$), 1999-2009 57 Table 11: Decision-making criteria when opening a bank account 57 Table 12: Decision-making criteria when purchasing an insurance policy 58 Table 13: Empty Nester’s reaction to poor customer service 58 Table 14: Empty Nester’s reaction to poor customer service from financial services providers 59 Table 15: Agreeability of Empty Nesters and Seniors to the proposition of borrowing money in order to better manage their finances 59 Table 16: Agreeability of Empty Nesters to the proposition of borrowing money in order to better manage their finances, by country 60 Table 17: Agreeability of Empty Nesters to the proposition of borrowing money in order to better manage their finances 60 Table 18: Importance of time-saving products and services to Seniors and Empty Nesters 61 Table 19: Propensity of Seniors and Empty Nesters to spend more on time-saving products and services 61 Table 20: Definitions of terms used in the report 61 LIST OF FIGURES Figure 1: In the US, Early Empty Nesters are particularly valuable, earning considerably more than their European counterparts 21 Figure 2: Empty Nesters choose most of their products and services based on price and customer service 25 Figure 3: Customer service is the main factor affecting Empty Nesters’ choice of bank 27 Figure 4: Late Empty Nesters are customer service driven even when it comes to picking their insurance provider 28 Figure 5: Empty Nesters do not tolerate bad service 29 Figure 6: Empty Nesters react differently to poor customer service depending on the financial services product that it relates to 30 Figure 7: Empty Nesters are more inclined to borrow to manage their finances 31 Figure 8: Swedish and Italian Empty Nesters are the most willing to borrow money to finance their purchases 32 Figure 9: Early Empty Nesters are more willing to borrow than Late Empty Nesters 33 Figure 10: Time-saving products and services are less important to Empty Nesters 34 Figure 11: Empty Nesters are less willing than other Seniors to pay more for convenience 36 Figure 12: Target Seniors by shifting the “center of gravity” in marketing campaigns from their chronological age to their desired age 39 Figure 13: Saga has built a business that only provides services for the over 50s population in the UK 40 Figure 14: The Co-operative Bank’s strategy has been to build a brand which would appeal to ethical consumers 42 Figure 15: RIAS has specifically targeted the over 50s group with cheaper insurance products 44 Figure 16: Television and newspapers are the most effective marketing channels for targeting Empty Nesters 48 Figure 17: MBNA is actively targeting ethically minded consumers with its range of charity credit cards 50 Figure 18: The equity release schemes market is forecasted to exhibit stronger growth rates than the general mortgage market over the next five years, 2004f-2008f 52 Figure 19: Datamonitor’s core consulting capabilities 64 AbstractIntroductionBy 2009 there will be 181 million consumers in Europe and the US classified as Empty Nesters, representing three-quarters of all seniors. This report looks at the attitudinal and behavioral habits of Empty Nesters in the US and Europe, giving financial services providers valuable insights into an important market to target. Scope Data from an exclusive Datamonitor survey of over 3000 consumers in France, Germany, Italy, the Netherlands, Spain, Sweden, the UK and the US In-depth analysis of data covering empty nesters' consumption attitudes and behaviours, broken down by region and age Data and analysis from secondary research on empty nesters' populations, income and expenditure in the US and Europe Focussed research into industry strategies highlighting existing approaches and future opportunities for financial services providers Highlights Although the total number of Empty Nesters in both Europe and the US is forecasted to grow from 160 million to 181 million, it is Early Empty Nesters who are mostly driving this group's growth. Datamonitor's survey shows that Empty Nesters across Europe and the US are more inclined to borrow than their senior counterparts. European Empty Nesters are the most inclined towards borrowing with 44 per cent of this group willing to borrow money to better manage their finances. Communicating with Empty Nesters is important since they resent being ignored by marketers who focus on younger consumers. When communicating with Empty Nesters, companies need to avoid being patronizing and applying common stereotypes. Reasons to Purchase Understand the size and scope of opportunities to target Empty Nesters in both the US and Europe Improve acquisition and retention rates by gaining a detailed understanding of the consumption attitudes and behaviours of Empty Nesters Design innovative products by learning of gaps in the market where existing strategies are not meeting the needs and wants of Empty Nesters Get Full Details About This Report >> |
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