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In 1900, only 13 percent of the population was over the age of 50. By the year 2020, that number will increase to more than 35 percent — resulting in a huge economic impact that will no doubt fuel growth throughout the retail industry.
While some retail channels, particularly drug, mass and dollar stores, have begun shifting focus to senior citizens, the rest of the retail world has largely ignored this profit-generating demographic. Convenience stores, especially, have the opportunity to benefit from this growing consumer market with a few simple senior-targeted programs.
While the majority of c-store retailers recognize that seniors are a part of their customer base, not many are doing much about it. Pinehurst, N.C.-based Fuel Mate LLC, which operates six c-stores, caters to a heavy retiree crowd in its markets but hasn't yet taken advantage of its captive audience.
"Unfortunately, I have to say we really don't target directly at the retirees," said Lowell Simon, managing partner for Fuel Mate. "I think that it's a great point and something to look at more closely, but we really haven't thought about it in those terms yet."
Rather than targeting the seniors directly, Simon said his chain does directly market to the golfing lifestyle of the Pinehurst area, which also happens to include the senior community. "People here in general are golf people — it just so happens that a lot of them are retired golf people," he said.
The difficult issue is getting senior consumers to want to come into the store and, once inside, giving them a reason to want to come back again. MAQ Group Inc., a Margate, Fla.-based chain with 144 stores under the banners Subco, Farm Stores, Super Stops, Petro America and Magic Market in Florida, Ohio, Georgia, Michigan, Indiana and Illinois, also targets senior shoppers indirectly with promotions and specials.
"In some of our locations east of the beach area where mostly senior citizens live, they buy a lot of gallon milk, coffee and newspapers so we have to watch that supply," said Mahammad Qureshi, CEO of MAQ Group. "They also seem to come heavily in the mornings. We sell a lot of the weekend Sunday papers in our heavily senior communities. They carry a lot of coupons, and I think that's a big interest for them."
Lottery tickets, which Qureshi said are very popular with senior shoppers, are also big sellers in his stores with these value-oriented consumers.
Finding these niches for attracting and pleasing the older shopper is the key to incremental sales — the trick is finding what works in what markets and how to capitalize on it.
Born To Spend
In 2001, consumers aged 45 and older spent $2.38 trillion of the $4.36 trillion total consumer spending in the United States, according to the AARP. That 52 percent market share was not limited to the growth of baby boomers entering senior territory, but increases of market share of consumers aged 75 and older as well.
Clearly, today's seniors are spenders. Value-conscious spenders, perhaps, but spenders nonetheless.
The problem is that while individuals age 50 and over own 80 percent of U.S. financial assets and dispose of 50 percent of discretionary income, they only receive 10 percent of ad messages, reports the AARP. Seniors, as a consumer group, are largely being ignored.
"Seniors tend to have more time on their hands and more money to spend, and yet nobody really targets them," said Gerald Lewis, an independent c-store consultant for more than 30 years based out of New York and former principal of CDI Group. "Convenience stores are looked on by seniors as sort of an unwelcoming place, even a last resort in some instances. I think the convenience store industry could target the senior population in some areas and really benefit from it."
Convenience stores, with their penchant for wanting to get customers in and out quickly, are particularly daunting to the 50-plus crowd, especially as older consumers get into 65 and over category. "If a c-store's only position is to satisfy people in a hurry, maybe they need to rethink outside of their target market," Lewis said.
Food is one measure a c-store can take to attract an older demographic to its locations — particularly fresh foods. In the Food Marketing Institute/ACNielsen Shopping for Food Study, fresh produce ranked at the top of the list for store selection for how seniors determine where to buy food. Thus, adding a few items of fresh fruit in the store could go far to attract that additional customer base.
"Having a strong foodservice program also helps," Lewis advised. "Have somewhere where seniors can come in and enjoy a cup of coffee and a doughnut in pleasant surroundings."
Today's seniors are healthier and more active than ever, which adds to the mix of things convenience stores can do to attract this segment. "I think we're going to see manufacturers responding with more 'functional foods,'" said Todd Hale, senior vice president, consumer insights, for the Cincinnati-based division of ACNielsen. "We're going to see a lot more focus on vitamin-enhanced, more nutritional foods in the future than what we have seen. I think we're going to see the potential for a big shift in manufacturers trying to take advantage of those opportunities, and therefore a shift in potential focus in retail as well.
"A few c-store operators have done a good job taking advantage of the fresh-foods-wins-customers mantra," Hale said. "Wawa is an excellent example of [a company that] has been focused on food and on fresh food as a way of appealing to a population segment that appreciates it. Fresh produce does overindex among the older population because they're looking to eat healthier. I think Wawa's a chain that has responded very well," he said.
Mixing a few senior-geared products into the offering can turn out to be surprisingly effective for the average c-store chain. After resisting his supplier's persuasion for months, Fuel Mate's Simon was finally convinced to add a small metal pill box that seals onto a key ring to his shelves. The result? "My supplier pushed it and pushed it, and I finally put them in and sold quite a few of them," he said. "They were hugely popular."
To appeal to elderly shoppers, retailers might consider making the c-store environment a little more friendly and familiar by hiring local seniors as employees. In the same way that stores attempting to attract a Hispanic demographic hire bilingual employees so that other Hispanics feel welcome in the store, senior employees can achieve the same effect with senior shoppers.
"Wal-Mart employs seniors as greeters, and that really impacts their older shoppers," Lewis said. "Having seniors as employees would in itself attract other seniors as customers. The fact is that seniors tend to be excellent employees, because they already have the good work habits and they feel useful. They generally require less supervision, show up on time and are very courteous. In a lot of markets, it's very difficult to find good employees. That could be one of the keys to going after this market."
Loyalty programs targeted at senior gas customers are another means of gaining a senior shopping base in convenience stores. "For those seniors who are still driving, you have the target market right there as they come to fill up their tanks," Lewis said, adding that window signage, pump toppers, fliers and audio messages could all be effective mediums for drawing senior gas customers inside the store. "The good marketers in the convenience store business are already doing this to make sure the gas customer comes into the store — why not target seniors?" he asked.
Capitalizing on the heavy-spending senior demographic may well be the industry's next big thing. The trick is to grab their attention while you can get it.
"We do think that future seniors will behave differently than past seniors," Hale said. "We've got better educated consumers and a lot more concern with health and wellness than there ever was before. And there's just so many more shopping and buying choices than seniors in the past have had." n
Sidebar: What Seniors Want
Attributes most important to seniors in selecting stores to shop for food
% 65+ Households
Good Value 39%
Fresh Produce 46%
Low Prices 27%
Fresh Meat 41%
Weekly Specials 32%
Easy to Find Items 29%
Source: FMI/ACNielsen Shopping for Food Study
Sidebar: Spend, Spend, Spend
The share of spending by U.S. seniors will increase with population growth
Chart: Estimated Percent of All Outlet UPC Dollar Spending
Seniors 55-64 Seniors 65+ Total Seniors 55+
2004 14% 12% 26%
2015 17% 14% 31%
2030 15% 19% 34%
Source: U.S. Census Bureau & ACNielsen Homescan ASP
"Seniors tend to have more time on their hands and more money to spend, and yet nobody really targets them."
- Gerald Lewis, independent c-store consultant