Though smaller in number, older online users have more buying power

Adults aged 55 and over are expected to constitute 17% of all online users by 2007 – a smaller group than younger users, but a significant one for retailers: they have more purchasing power. According to new findings from Jupiter Research Inc., in 2002 older adults accounted for 18% of all online spending, including goods and entertainment, though they represented only 11% of all online users.

“This disproportionate share reflects large overall purchasing power and high online spending per buyer, especially relative to online users under the age of 35,” says Jupiter.

By 2007, online retail spending by older adults will account for 25% of all online spending, or nearly $26 billion, with the annual spending per buyer in this group reaching about $800 from the current $500. The increase in spending will be driven in part by a larger population of older adults being online, as the number of online buyers aged 50 and over is expected to more than double from 14 million in 2002 to almost 33 million by 2007.

Significantly, Jupiter’s data show that older online users are both more sensitive to Spam – defined as unsolicited e-mail -- and more likely to purchase products online as the result of an online advertisement. One-third of older online users surveyed deemed Spam the most intrusive form of online advertising, compared with 25% of online users. Less than one-third of older users reported they’d made a purchase online after being influenced by an online ad, versus only 19% of users overall.

The finding, says Jupiter, “suggests that while certain forms of online advertising are intrusive, older users remain a more responsive audience.