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Aging Well

Retailers with five-year plans to lure hungry teens and busy young adults may want to consider this little statistic: Six years from now one-third of the population will be over 50. The year after, the oldest members of the 76-million-person baby-boom generation will be blowing out 65 candles.

This is not great news for the youth-oriented c-store industry, where a hefty 80 percent of U.S. teenagers and adults under 40 shop at least once a month. That store-usage number falls like a boomer off his son's skateboard to 71 percent of folks aged 40 to 54 and plummets to 56 percent of consumers 55 and older, according to Convenience Store News Market Research. Even among regular c-store shoppers — the folks who actually stop in to buy gasoline, cigarettes and snacks — the grayer they get, the less often they visit. More than 60 percent of adult c-store shoppers under 55 stop by at least once a week, but only half of the loyal customers 55 and older make it in that often.

"So much focus is on the youth market, 18 to 49, which traditionally has been the group that buys the most," said David Bishop, of Willard Bishop Consulting Ltd., based in Barrington, Ill. "But the most opportunity for retailers in the next 10, 15 years will be in the 55-and-over group."

Indeed, while the U.S. population is projected to grow 10.4 percent between 2003 and 2015, the number of folks 55 and over will grow 36.4 percent, according to the U.S. Census Bureau.

"The most important business opportunity for c-stores is the boomer segment," said Brent Green, formerly national director of advertising and sales promotion for Total Petroleum and author of Marketing to Leading-Edge Baby Boomers, which focuses on Americans born between 1946 and 1955 (now aged 49 to 58), a group 37 million strong, with approximately $750 billion in annual spending power. "As consumers, boomers and the Silent Generation, who are now in their 60s and 70s and were influenced culturally in their late 20s by the [upcoming] boomers, have a lot of experience in the marketplace.

"They are brand-conscious, which fits in with most c-store strategies. Plus, price is not necessarily the driving objective of this generation, as compared to young males today. They are quality-driven."

As young adults, the growing senior population was responsible for the evolution of the country's Youth Culture, which advertisers strongly responded to, Green said. The problem: Marketers are ignoring them now.

"This is a huge mistake based on years of habit," the author noted. "The major-brand marketers became fixated on youth back in the 1960s and haven't broken that habit."

One reason: The myth that people are less likely to switch brands as they grow older, because preferences have been made. "That is patently untrue," Green said. "Boomers are experimenters."

Hurried, but Older

Like other c-store customers, older consumers stop in because the stores are convenient. "The older boomers are like everyone else, they are in a rush and have certain needs c-stores may be able to accommodate," Green said.

While many Americans still think of 65 as retirement age, many older Americans now work well into their 70s, Bishop pointed out. "This puts a premium on convenience and services in a group that has reached the zenith of income potential from an earnings perspective. These people will be willing to pay a premium on high-quality products or services."

Still, those products must be wanted by older consumers. "Our needs and satisfactions shift as we get to our 50s, 60s and beyond," said Jim Gilmartin, president of Coming of Age Inc., a marketing communications firm specializing in boomer-and-older markets. "Our values and relationships are basically the same, but how they manifest themselves change. Unfortunately, many marketers don't tap into that. The people doing the marketing are often under 35."

While older boomers and seniors often have a good deal of disposable income, in c-stores they are simply buying goods, not experiences, unless the retailer creates experiences for them. For instance, Gilmartin said, Ukrops supermarkets provide benches for older shoppers to rest. "Some stores offer small boutique restaurants where whoever isn't interested in shopping can sit down and read the paper and have a cup of coffee. That is the kind of competition the c-stores are fighting against."

Whether or not older consumers are willing to pay for convenience, as younger customers are, remains to be seen, he added. "As we get older, we are cautious in spending money on goods and commodities. My gut says this is a major issue c-store owners are not looking at."

You Are What You Buy

As the country ages, health issues have taken center stage, already having an impact on the products purchased. Many c-store operators have seen a shift toward healthier beverages, for instance, with growth coming from water, tea and juice products. "Non-diet colas are virtually stagnant," Bishop noted. "In 10 years, I'm sure the mix of beverages will include healthier alternatives, whether they have lower calories, lower carbs, or be vitamin- or mineral-fortified. This could be very relevant to how c-store operators begin to satisfy an older populations' needs."

C-store operators also would be wise to consider do-it-yourself-health products, Green said, a growing category of foods and supplements that address people's interest in gourmet, flavorful products, with health overtones. "It took over supermarkets 10 years ago, led by companies like Whole Foods Markets and Wild Oats Markets," he said. "C-stores are addressing it, but the question is: Are they merchandising these products effectively? Could they do a better job of testing other products?"

While many operators already offer protein bars, Atkin's products, low-fat ice cream and other products for the diet-conscious consumer, the offer isn't clearly presented in most c-store environments. "The opportunity has not been exploited," Green noted, warning retailers not to position themselves as a place for "older" consumers, but for customers interested in health and fitness.

"Seniors of the future will be more active and generally keep their health longer, because they are more focused on health," he said. "They will suffer from age-related disease, but won't be put in a box of the traditional stereotype of being old."

At Tom Thumb Food Stores Inc., based in Hialeah, Fla., customers drink less beer and taper off their smoking as they get older, said James McCarthy, president of the 14-store chain. "They are not consuming as much as the 35-year-old, but they are still good customers. Many older customers are still buying beer to watch the ball game at night."

Among the chain's bestsellers among seniors: dietetic foods, especially candy, and healthier fare. Juices, water and sugar-free beverages also are attractive to older customers. "I think sales of those products will continue to improve," McCarthy said, noting customers of all ages are becoming more conscious of what they're eating.

Still, there are many convenience foods older consumers on restricted diets are not likely to buy, McCarthy said. "But we try to evaluate every new item every three to six months. The customer shows you what works and what doesn't, no matter their age."

Unfortunately, most convenience stores stop meeting the needs of consumers as they get older, Green said. "Do you visit McDonald's as frequently as you did when you were a teenager? Most c-store offerings don't appeal to a changing demographic. As palates become more sophisticated, people become less interested in traditional candy and junk food and they typically don't find or expect to find healthier products."

While cigarettes are less likely to draw older customers, Green says co-branding foodservice — but not with traditional fast-food brands —may bring seniors in. "Is there an opportunity to partner with Chipotle or Quiznos? The older demo prefers food that is fresher and has the earmark of healthier."

His advice to the dubious c-store operator: "Test. Only the market will fully tell us. But if you are going to put a deeper stake into a market you've let go, you need to do more than just put a few things on the shelf. Make people conscious of the fact the store isn't the same store as it was when then were teenagers."
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