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Empty nesters and financial services

DateJun, 2005
Pages64

€2 236 

Report Information | Custom-Tailored Research | Product Trade Lead


Abstract:

Introduction
 
By 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




Table of contents:
 TABLE 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 (Ђ & 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 (Ђ and US$), 1999-2009 56
 
Table 10: Annual per capita disposable income for Late Empty Nesters (Ђ 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
 

 




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