Mobile accounted for 25% of Ulta's e-commerce revenue during Q2.
Older consumers have money, and they're spending more of it online. E-retailers are adapting to this growing boomer demographic.
Gearheads may account for many of the buyers of electronics and computer components at Newegg.com, but they're not the only consumer group the e-retailer is focused on. Newegg has observed the percentage of consumers on its site who are 55 and older grow from 16% in 2008 to 18% last year, and it's making changes to accommodate the greyheads as well as the gearheads.
That includes featuring less techie and more mainstream products on its home page, changing the way it describes products and offering more assurances of the e-retailer's reliability, an important concern for older consumers.
"The age group coming to Newegg is inching up," says Bernard Luthi, vice president of marketing at Newegg Inc. "In order to create an experience that had a farther-reaching appeal we needed to make changes."
Other online retailers are making similar adjustments, and not just because more older consumers are coming to their sites. There's another reason to make a special effort to satisfy older consumers: They tend to have more money than younger consumers, and often are less concerned about finding the best price. That means e-retailers that win their confidence can count on selling more at full price to a growing cohort of well-heeled shoppers.
$3 trillion to spend
And, make no mistake, this age group is big, growing and shopping more on the web.
There are 116 million consumers age 50 or older in the United States, more than a third of the population. These consumers wield $2.9 trillion in spending power annually, and two-thirds of online adults age 46-73 say they shop online. In fact, 69% of Internet users ages 56-64 say they shop online, a higher penetration than any of the other age groups tracked by the Pew Internet & American Life Project, which regularly surveys U.S. consumers on their web activities.
That's showing up in e-commerce traffic statistics. In the past two years, the share of traffic to leading e-retail sites from consumers age 55 and older increased 3.3%, while decreasing 1.6% for those 25-34 and 2.6% for the 35-44 age group, according to web tracking firm Compete Inc. For some retailers, the changes are dramatic. For example, consumers 55 and up represented 17% of traffic to the e-commerce site of apparel retailer Gap Inc. last year, versus 7% in 2008, Compete says.
These changes are important because many consumers age 55-64 are in their peak earning years and are among the highest spenders. For example, consumers 50 and up spend the most money each year on gifts, about $1,353, among the age groups tracked by the U.S. Bureau of Labor Statistics.
So what kind of changes are e-retailers making in hopes of selling more to older web shoppers? They're adjusting the language they use, the products they show, and focusing more on building trust.
Newegg.com made several changes to reassure wary shoppers, reacting to the frequent calls from older consumers considering a purchase. "Older consumers called more often than other age groups in advance of a purchase," Luthi says. "They'd say: 'I want to understand more about the organization. Let me know who you are and what your return policy is.' They're still not as comfortable as a person in his mid-20s about shopping on the web."
The site now features customer testimonials on its home page, more details about the company on the About Us page and product ratings and reviews. Luthi says pre-purchase calls inquiring about the e-retailer's policies decreased after Newegg added the information and testimonials, although he could not say by how much.
Newegg.com also now features more products on its home page that appeal to casual shoppers, while still satisfying its core audience of technically astute shoppers. "We mix it up," Luthi says. "Today you'll see a point-and-shoot camera and a Flip video camera next to advanced power supply cords. It makes it more accessible to more consumers," he says. Luthi says the company also expanded beyond electronics to appeal to a broader range of shoppers. The e-retailer itself sells appliances and cookware, while its two-year-old marketplace division lets other sellers market products like jewelry and apparel.
Serving multiple audiences
Like Newegg, Alibris.com also is trying to do a better job of catering to older shoppers, while also satisfying a younger group of shoppers. Alibris.com serves two core audiences: students and teachers that come seasonally to buy textbooks, about 30% of its clientele, and middle-age and older consumers that shop year-round and make up the remaining 70%.
The two customer segments respond to the site differently, says Molly Siemers, director of product management and user experience. A typical student has no fear of shopping online, she says. "If something goes wrong, he is going to blame the site and assume he is doing everything right. An older consumer who encounters a problem is going to think he is doing something wrong," she says.
One way to serve older shoppers is to make sure error messages are worded in a way that a non-techie, older consumer would know what to do next. If a consumer enters bad log in information, for example, instead of saying "You entered incorrect information, try again," Alibris says: "We weren't able to log you in, please check your information and try again. If you continue to have difficulty, please contact us." It also includes a link to customer service.
"You have to show there is a clear path forward and remove any roadblocks," Siemers says.
Alibris.com also began letting shoppers rate booksellers in its marketplace late in 2009, and was overwhelmed by the response. "There was tremendous interest in making comments about the sellers," says Jeanie Bunker, general manager of Alibris.com. "The expectation of this population is for high-quality, high-touch service, which is tough to deliver in a low-cost online space."