The old days of a household containing mum+dad+2.2 kids is history

For the last year I have been banging on about the importance to marketers of the increase in multigenerational households. The impact of the recession on employment has made the issue even more important.

It is good to see that Adage has published an article about the subject.

A more detailed an elegant analysis of the subject comes from the Pew Research Centre.

While high unemployment and housing foreclosures of the recession have played a key role in the trend it has been growing over several decades, fuelled by demographic and cultural shifts such as the rising number of immigrants and the rising average age of young-adult marriages.

Whatever the reason it’s something that marketers cannot ignored. When their target consumer is in the supermarket, bank, real estate office they will be making the purchase decision not just based on their own wants and needs but on and increasing complex inter-generational family model. Dick Stroud

Latest research from Pew about the use of social networking

As usual, when Pew publishes research it is worth reading. As the graph shows, the desire of older people to use social media continues to rise.

The numbers that particularly interested me was the difference in penetration between the youngest group and the 50-64 year olds. Since May 2008 it has fallen by 17 percentage points. (i.e. was 67% V 11% and is now 86%V47%). Assuming I got my sums right. That’s a really dramatic change. Yes, yes I know the argument that the older group is coming from a lower base and hence you would expect the increase to be larger, but even so that is a dramatic shift. Dick Stroud

Let’s ‘Engage’ the oldies in the climate change ‘debate’

Back in 2007 there was a report published that showed that oldies have a disproportionally large carbon footprint.

I was not too happy with the methodology that was used to come to this conclusion and wrote a blog about it pointing out the weaknesses in the way the figures were calculated.

Since then the climate change industry has suffered something of a setback with the COP15 joke and the stream of evidence of bad and possibly criminal science that supports many of the arguments.

I think it is a tragedy that such an important subject seems to have been hijacked by people who are only concerned with the next headline rather than the grunt work that is required to construct solid arguments to support their cause. Interestingly, many scientists in the green lobby would agree.

Why am I telling you this? Well the guy who was behind the 2007 report has now produced another document “Older People and Climate Change: the Case for Better Engagement”. I am sure his heart is in the right place but somehow I don’t think this is going to change the world.

The questions I asked about his methodology for his conclusions about age and carbon footprint are still unanswered. As long as they are I will continue to consign the report to the same pile that reckons the Himalayan glaciers are going to melt by 2035.

My questions are:


1. The research didn’t take account of the geographic spread of older people (i.e. far more are based in a rural and suburban than urban areas). This changes their need for car transport. To provide an accurate comparison the researchers should have compared the carbon consumption of rural 30 year olds with the rural 50-plus. Also cities have a higher ambient temperature which reduces the need carbon used in household heating.

2. Older people are more likely to have larger properties, with all of the implications this has on heating and lighting etc. Also older people are likely to live in their own properties whilst many younger people live in rented multi-occupied properties.

3. No consideration was given for the way that older people consume carbon on behalf of their children and grandchildren (i.e. kids not leaving home until much later and the amount of time that grandparents spend looking after grandchildren). Since 2007 the number of multi-generational households has skyrocket. Was this taken into account in the form the conclusions?

4. The report used a measurement of carbon efficiency (kg/£/capita) which is misleading since older people (75+) spend a disproportional amount of their total incomes on heating/lighting. The true comparison is the total amount spent on heating - not as a proportion of total income.

5. The research didn’t appear to take account of the carbon that employers consume on behalf of their employees. Since there are a lot less 50+ in employment than 30 year olds that is an important factor.


Answers welcome. Yep, nearly forgot. There is no mention of the level of confidence about the research result. Dick Stroud

Facebook reckons the world ends at 64

This article points out that Facebook’s demographic targeting ends at 64 years old – after that you are history.

This got me thinking. I wonder how many people in the UK are on Facebook aged 50-64.

If you can believe the results of the web site then a couple of million – all of them checking on what is happening to their kids and grandchildren?

I cannot get too upset about Facebook thinking the world ends at 64. It would be interesting to know how many 65+ year olds have a profile. One thing is certain. Not enough to ever make it worth using Facebook a useful tool for targeting them. Dick Stroud

Yet more data demonstrating the importance of Bank Mum and Dad

The press release from the Council of Mortgages lenders, in May 2007, said that 40% of young home-buyers get help from Bank of Mum and Dad.

Things have changed a bit. A total of 84% of first-time buyers under the age of 30 were given money from their parents towards a deposit during the last three months of 2009.

It is the highest proportion on record, according to the Council of Mortgage Lenders.

Isn't Bank Mum and Dad doing well? I do hope the Financial Services Industry understands the importance of this change in the funding of house purchasing. Dick Stroud

Internet Access 2010 - Households and Individuals

The ONS has released its 2010 analysis of the Internet use in the UK.

No surprises and not a great deal of change from 2009 but it contains lots of data to pad out presentations about what older people do online.

Not surprisingly we have near saturation use by the 16-24 year olds and the big step change down for the 65+. Please don’t forget that these ‘average’ numbers mean very little. The question is: “Are your older customers using the Internet.” If they are In the top socio-economic groups then the answer is almost certainly yes. Dick Stroud

Watch out for the grankini

It is Saturday. It has been a long week. I reckon it is OK for a few words of trivia.

According to Debenhams (a large UK department store) the sales of 'grankinis' have risen 118% in two years, driven by ladies in their fifties and sixties.

The store spokesperson said: "A full costume on an older lady instantly says ‘granny’; but a supportive, well-proportioned bikini is less ageing and accentuates rather than hides natural shape."
Apparently, advances in swimwear technology mean there are more two-pieces available that suit more mature bodies.

If you want to see the pictorial proof than have a look at the snaps.

So there you have it, a new product term to add to the list of silly words – the grankini. You might think it ageist but you cannot accuse the store of ignoring their older customers. Dick Stroud

Whatever happened to Focalyst

I just received a spam comments on one of my old blog posting that featured Focalyst.

That got me thinking. Whatever happened to Focalyst.

The web site is still there but on the news page the last entries are for 2008. The last report, for download was published in 2008.

I am amazed that AARP and Millward Brown would still let the thing fester on if it was dead - maybe there has been no news or anything to report since 2008? Anybody know the answer?

Older Americans don’t value money as much as their kids and grandchildren

This research from Harris provides confirmation of your common sense hunches. The only one that surprised me was that the degree of difference of 55+'s value of being ‘richer’ compared with younger groups. Either they have already achieved their wealth aims (I doubt it). Given up on the aims (not an American trait) or have discovered the attainment of wealth has its limitations.

As with all of these research studies, they are worth a smile, but not a great deal more. Dick Stroud

Baby boomers of the world, stand proud

I never reproduce a whole artcle from a newspaper but I thought this one was particularly good and unless you are a FT subscriber it would remain hidden.

So please excuse me FT but I am going to break a rule (and probably copyright law) – promise I will not do it again.

The author is Martin Dickson the FT’s Deputy Editor

Psychiatrist: “So, Mr Babyboomer, please lie on my couch and tell me when you first became aware of this sense of persecution.”

Mr Babyboomer: “It’s not just a sense of persecution, doctor, it’s for real. Though I still find it hard to believe that someone hates me not for who I am, but just because of the way I look, just because of my – well, my skin.
“I mean, I can’t help how I look: the wrinkles, the liver spots, the yellowing teeth, the paunch, the white hair, the general pull of gravity on once-firm flesh. But it marks you out, doesn’t it? It says you’re a baby boomer. Well, that and driving a BMW, I suppose. And people hate baby boomers.
“I suppose it first began to sink in when I read this book – this awful, ageist book – by a man named Willetts. David Willetts, who just happens to be the UK’s universities minister and ought to know better. He blames us baby boomers for ruining our children’s future. If you ask me it’s a naked incitement to facial hatred.
“After reading that book, well, I started to notice the way people looked at me – people under the age of 40, that is. The way they curled their lip. And I began to hear voices:
‘You’re a baby boomer, you bastard. You’re a thief. No, you’re lower than a thief because you’ve not just robbed us of money, you’ve stolen our future. You’ve taken all the jobs; you’ve taken all the houses and pushed their prices up so far that we can’t afford them; you’ve taken all the gold-plated final salary pensions and changed the rules so we can’t get them; you’ve taken free university education and lumbered us with monster student debts; you’ve squandered the earth’s resources through your selfish, hedonistic disregard for future generations.
‘And now – to cap it all – you’re changing the law so that you don’t have to retire at 65, so that you don’t have to drag your nasty, tired, offensively crumbly body off into the retirement home where it belongs, and can keep us out of jobs indefinitely. Is it any wonder we hate you?’
“But you know what, doctor? I think it’s time to take a stand. I think it’s time for each and every one of us baby boomers to take a deep breath and say: ‘I will not be a victim. I will not give in to facial stereotyping.’
“So the next time some smooth-skinned babyface with a full head of hair curls his lip at me, I’ll give it to him straight. I’ll say: ‘Yes, matey, I am a baby boomer – and proud of it.
‘And you know what? Our generation hasn’t had it easy like you think. Not easy like your soft, spineless, self-centred generation. Yes, some of us have bought our own homes, but you know what? We worked for them. We worked damned hard – and endured the hell of negative equity along the way. And yes, a few of us are lucky enough to have final salary pensions. But you know what? We paid for them, month after month after month, out of our salaries, and lost out heavily if we moved jobs. And many more of us don’t have fancy private pensions, and have to just scrape by.
‘As for university – or “uni” as you young people put it – there just wasn’t much of it on offer in our day. Not like now, when every damned dimwit seems entitled to spend three years getting a degree in getting wasted. “Uni”: it even sounds like someone throwing up, doesn’t it?
‘And as for trashing the planet – don’t make me laugh! This from the most materialistic generation of all time! We didn’t have iPhones, we didn’t have Topshop, we didn’t have cheap flights to Ibiza, we didn’t even have computers. We had a scratchy Dansette, a family phone in a cold hallway and a week in Bognor Regis – if we were lucky.
‘But we did have political commitment: against the bomb, against apartheid, against Vietnam, against the trashing of the planet. Just who do you think founded Greenpeace? And what did your generation ever stand up for? The right to Happy Hour in some bar in Koh Samui?
‘So, let’s ditch this daft idea that my generation has ruined the world for your generation. In fact, we’re all in this together. Well, you know that, don’t you? You doubtless have a generous account at the good old Bank of Mum and Dad.’”

Psychiatrist: “All this sounds an excellent therapeutic response to your bewilderment and anger.”
Mr Babyboomer. “Well, it certainly shows how absurd it is to stereotype people. Although ... well ... of course we all know who the real villains are. Well, breathe it softly: the civil servants ... yes, the civil servants.
“They’ve all got these fat, final salary pensions – generously inflation-proofed, please note. And, behind the scenes, what do they control? Everything! Housing policy, pensions, the banks, the welfare system, boom and bust. . . .And they sit there, on their fat behinds ... Yes, doctor, there’s one thing everyone can agree on: it’s OK to hate the civil servants.”
Psychiatrist: “I am a civil servant.”

And so say all of us! Dick Stroud

Brave Old World

I really don’t know how to define this Web site.

It is created by the Columbia University Graduate School of Journalism and records what happened when a group of very creative people went and talked to gerontologists, academics, medical researchers, advocacy groups and older Americans and their families, to learn about what getting old is all about.

The result is a collection of very moving, informative and fascinating videos, graphics and documents.

I have only had a look at a couple of the links. Do make sure you see Elderland. Dick Stroud

Bank Mum and Dad is expanding and taking market share

Aviva, the company with the dreadful insurance ads, has published some research showing the importance of parents in funding their kids. A few factlets from the research (sorry no sign on the Aviva Web site of the research report, just the press release)

29% of parents worry that further handouts will limit their retirement income and 16% are concerned they will have to continue working as a result.
20% of parents anticipate providing funds in the future with 30% adult children are relying on future support from their parents.

The FT has an article (subscription only) , based around the research that is worth a read. It goes some way to counter the tirade of “they are spending our inheritance” nonsense.

The article’s author suggests there are two types of accounts offered by BMAD

Type one: The “Forever Young” account. This is mainly opened by students and allows children to have their lifestyle funded by their parents up until they secure a job that can pay instead.

Type two: The “Help! Lifetime” account. This allows customers (kids) to go to their parents for financial help on a need-by-needs basis.

As traditional banks and building societies become more risk averse it look like Mum and Dad will play an ever great role in funding their nippers. Dick Stroud

Oldies stacking the shelves and on the cash registers

A new bit of research is reported in the retail press showing the surge of older people working in the Retail Industry. This certainly substantiates what I have seen during my visits to supermarkets and DIY stores. Lots of older faces.

It seems that last year, workers aged over 55, accounted for one in seven of the workforce, with 50,000 more people from that group working in retail than in 2001.

And the potential market for retailers to employ from within the 50-plus age group is nearly three times greater than the 16 to 24 age group.

Skillsmart Retail, an analyst company, predicts a 22% increase in the number of over-50s working in retail in the next 10 years.

The report also predicts that the next decade could see a 9% drop in the number of 16 to 24-year-olds working in retail. Typically, a younger worker will remain with a retailer for one to two years, while the over-50s stay for between five to 10.

Looks to me like as the Eastern European workers move home their positions are going to be taken by older UK workers. Maybe I am being a tad to cynical?


From a marketing perspective it makes a lot of sense to try and find a better match between the customers and those serving them. Dick Stroud

Anything but Boomers

An amusing video, from AARP, about what older people want  to be called.

The main message is they don’t want to be characterised by a single name - who does?

The mistake that many marketers make is to think that the names of the categories they use are the same as how the market sees itself. I doubt if there are too many people around who know they are Gen Y or Gen X.

AARP have also published very funny article about the subject of the name Baby Boomers.

There is an additional problem in Europe that our ‘baby boom’ was nothing like that in the US. So not only do we have a name that nobody likes but it is also inaccurate. Dick Stroud

We had it all – sex freedom, money……..

It's Sunday so it must be another 60 year old whining on about how his or her generation screwed up the world. This Sunday it was the turn of Will Hutton to add his two pennies' worth. Needless to say but it was accompanied by the mandatory picture of a half crazed hippie.

I nearly trashed the article when I got to this section

Having enjoyed a life of free love, free school meals, free universities, defined benefit pensions, mainly full employment and a 40-year-long housing boom, they are bequeathing their children sky-high house prices, debts and shrivelled pensions. A 60-year-old in 2010 is a very privileged and lucky human being – an object of resentment as much as admiration.

Having got to the end of the article it was not as bad as I expected. Hutton and I have a lot in common (regarding age and background) – not a jot in terms of political beliefs. I felt rather sorry for the guy. He seems to be suffering from a real dose of destructive self-introspection.

Where he, and most of the people who have dished up their homilies on this subject, get it so wrong is that they extrapolate their generation's history from their own experiences. This is basic mistake of marketers who think the market universe is an extrapolation of their own needs and wants.

Hutton tells us how when he was at university he was part of the revolt against the university authorities. My university (Sussex) was probably the most revolutionary and I remember how the vast majority of students thought the Hutton’s of this world were an absolute pain in the a****. The 'revolting' Huttons were a particularly vocal bunch of self opinionated students, nearly always from an arts faculty. Believe me, they didn't represent their generation anywhere as much as they think they did.

The Hutton’s of this world went to university but in those days only 8% of kids did – unlike 38% today. The Huttons of this world worked in jobs that provided final salary pension schemes. For large numbers of his peers, the 92% who did not go to university, they were luck to get any pension.

The media/political/chattering class are those who have taken on the mantle of commentators about the baby boomer generation. It is a great pity that they are incapable of thinking outside their own, very limited, social group.

Reading the comments to the article was one thing more depressing than the article itself. From their tone I assume they were penned by the UK’s Yoof. How very depressing. Dick Stroud

Should You Copy a Famous Site's Design?

I must think of another opening sentence than “I always think it is worth reading Jakob Nielsen's Alertbox.” The trouble is I can’t.

I like what he writes and how he writes. He gets the balance absolutely right between tempting the reader with acquiring more of his thoughts (via conferences and books) and giving away a lot of valuable insights.

I am sure that for many, what he says reads like common sense. For example: “Users prefer well-established designs that follow conventions and work as expected.”

Why then do so many designers spend their time and their client’s money doing exactly the opposite trying to be ‘innovative’ when bog standard – current Web design – works best.

Another example: “Web site visitors want to get things done. They don't want to read.” Obvious you would think? I would like a dollar for every conversation I have had with clients and friends as they agonise over their Web site copy – not for its ease of reading – but to ensure it captures exactly the essence of their company, brand, product etc. Web site visitors don’t give a damn they want to get/do something.

I guess as long as people ignore what Nielsen has to say it keeps the dollars rolling in. Dick Stroud

Is an iPhone App Right for Your Business? Six Questions to Consider

Many thanks to Erin for sending me a link to this article about the experiences of a US law firm that developed an app for their business. Good common sense stuff.

Considering the importance of the subject it is amazing how little has been written about Apps Marketing. There appears to be a couple of books on Amazon and that’s that.

Looks to me like a vacuum waiting to be filled. Methinks there are hoards of people at this moment trying to fill it. Needless to say there is zilch about using Apps to market to older audiences. Watch this space. Dick Stroud

Worth spending time understanding demographics

I know I can “Bore for England” on the subject of demographics. I find the subject fascinating – both at a local and global level.

Business Week has a feature about the countries with the fastest shrinking populations. No prizes for the winner – Japan. On current estimates its population will decline by a quarter in the next 40 years with most of those remaining being old.

The data used in the article is taken from the Population Reference Bureau. It is really worth downloading this organisation’s free fact sheet. If you ever need proof that the Earth is splitting into old and young countries then this report provides the evidence. Dick Stroud

Great new iPad ad

Yep, I know that I think that Apple and its i-things can do no wrong. But I have to say I really like the new iPad ad. Totally age neutral, full of excitement – works for me. Dick Stroud

Ageism and Age Discrimination

One thing you can be certain of when you attend an event related to ageing is that some bright spark will come to the mind shattering conclusion that the perceived problems are all the fault of ‘ageism’ and if only we could recify the ills it creates then the world would be full of sweetness and light.

How refreshing to read a well argued and well written paper that unpicks the issues and provides a fascinating historical context.The author is Professor John Macnicol, from the LSE, and is published by ILC-UK as a “think-piece”.


A few factlets that caught my eye:

Between 1881 and 2008 the economic activity rates of UK men aged 65+ fell from 74% to 10%. Can this really be attributed to a sevenfold increase in ageism at work?

In the early 1950s, two-thirds of men worked past the state pension age of 65 (often mistakenly assumed to be a universal mandatory retirement age); now two-thirds have left work by age 64. Clearly, being forced out of work at the age of 65 has not been a major factor in the spread of retirement. The major cause has been declining labour market demand in those sectors of the economy that have employed high proportions of older workers.

Most male early retirement (that is, occurring before the age of 65) has been involuntary (caused by redundancy or ill-health) rather than a result of employers’ ageist hostility.

The author doesn’t offer any ‘solutions’ but at least he provides a good starting point to decide what the ‘problem’ is we are trying to solve. Really worth reading. Dick Stroud

Two excellent blog postings about Boomers and food

The Creating Results blog is always worth a read.

If you are interested in the food industry then have a read of blog1 and blog2.

The first posting contains some interesting details about the levels of spend (in the US) on different expenditure areas. I feel that the precision of data reporting is a tad overdone but it gives a feel about how spending changes, or doesn’t, between the age groups. Dick Stroud

Live with the kids - you must be joking

Australians prefer the “ageing in place” option rather than any of the alternatives.

When asked to nominate which options they would like to deal with their future housing needs, more than 90% of older home Australian home owners said they wanted to stay in their homes and wanted to be able to modify them with grab rails or other devices to suit their needs.

Moving into their children's homes was distinctly unappealing - fewer than one in five said they would even consider it. If anything, the opposite is happening and the kids are moving back to live with their parents.

Australians appear to have the same attitudes, at least about housing, as their US and European peers. Dick Stroud

The reporting of age in the UK has changed.

The latest employment statistics from the Office for National Statistics (ONS) contain a significant change to the way the figures are reported. The concept of the ‘working age’ population has been dropped.

No longer is there any reporting in the monthly Statistical Bulletin on the population aged 16 to state pension age (SPA). Instead the focus has switched to people age 16 to 64 and then those aged 65+.

A small change you might think but it means that the statistics for the number of people who are employed, for those who are economically active or inactive are now broken down into the following categories:

16 and over
16-64
16-17
18-24;
25-34
35-49
50-64
65+

So what does the change mean? If we take July’s figures, the number of people aged 50 to SPA in work was 6.6 million and the employment rate was 71.1%; in the August figures the number of people aged 50-64 in work was 7.24 million and the employment rate was 64.5%.

Similarly, the number of women aged 50-SPA reported as being in work in July’s ONS figures was 2.68 million with an employment rate of 70.7%; August’s release reports 3.32 million women aged 50-64 in
work with an employment rate of 58.1%.

Many thanks to TAEN for explaining these changes so well. Dick Stroud

30 business opportunities driven by the Boomers

Brent Green has a new book being published in the Fall 2010.Generation Reinvention: How Boomers Today Are Changing Business, Marketing, Aging and the Future.

As a ‘taster’ he has published 30 different areas of business where Boomers will have a major impact. The book will certainly be worth a read. Dick Stroud

Absolutely everything you need to know about communications channels in the UK

This report, all 379 pages, is the definitive document about UK communications channels and how they are used.

It is published by OFCOM and I reckon it will be the last they produce once the austerity measures start to bite.

This graphic shows some startling differences in the way the different age groups use the different comms channels. Dick Stroud

The Web Is Dead. Long Live the Internet

This is certainly not a 50-plus specific blog post but it applies to them as much (if not more so) than other age groups. The title of the article in Wired and the graphic says it all.

If you want more explanation then this excerpt from the article makes it absolutely clear.

Over the past few years, one of the most important shifts in the digital world has been the move from the wide-open Web to semi-closed platforms that use the Internet for transport but not the browser for display. It’s driven primarily by the rise of the iPhone model of mobile computing, and it’s a world Google can’t crawl, one where HTML doesn’t rule. And it’s the world that consumers are increasingly choosing, not because they’re rejecting the idea of the Web but because these dedicated platforms often just work better or fit better into their lives (the screen comes to them, they don’t have to go to the screen). The fact that it’s easier for companies to make money on these platforms only cements the trend. Producers and consumers agree: The Web is not the culmination of the digital revolution.

We live in interesting times.

However, there is a different take on what is happening. This article from WARC,contributed by Comscore, suggests caution:

"What we're seeing is a disconnect between the hype around apps and the number of people who are actually using them. Brands need to think outside of the app space if they really want to engage with a mass-market audience. Apps are by no means the dominant channel, although it would be unwise to abandon them altogether."

I think both views are right. Sure the Web is vital and will be for ages but the balance of power is shifting. Not as fast some think (including me) but the direction and the end position is clear. Dick Stroud

Use them or lose them

If you are interested in physiological ageing then you should listen to this BBC Radio 4 programme about muscles and what happens to them as we age.

I was so pleased to hear Claudine Aherne interviewed. She has been convinced about the importance of exercise and older people and setup a business (Vida Wellness) to exploit the opportunity. Claudine deserves to do well and I really hope the ringing endorsement, given by this programme, helps achieve her goal. Dick Stroud

Eldergadget.com – somebody who shares my iPad enthusiasm

Have a look at Elie Gindi, from Eldergadet.com. who shares my enthusiasm about the iPad. Sorry, but there was no way I could embed the video – you will have to use the good old fashioned link to watch it on the CBS site.

If you are interested in tech products that have appeal to older consumers you should check out his blog. Dick Stroud

Getting older working longer

In the last three months an extra 40,000 people over the age of 65 have joined the work force, taking the total number to 823,000. This is the highest number since the Office for National Statistics started keeping these figures in 1992.


The current ratio of four working adults for every pensioner will fall to three within a decade and two by 2040.

Now this is a really frightening fact. According to Aviva, 12% of people aged 65 to 74 have a mortgage with the average being close on £60,000. This is along with credit card bills.

The positive thing for marketers is that there are going to be a hell of a lot more economically active 65+ year olds. Dick Stroud

Prepare for the worst and you will not be disappointed

Just in case you are feeling too cheerful, Moody’s, the debt rating agency, has some words of doom and gloom to send you into a deep depression.

“Genuinely adverse debt dynamics were only expected to materialise in 15 to 20 years. The crisis has 'fast-forwarded' history, eroding all the time available to adjust "

The US, UK, Germany, France, and Spain are all at risk of an "interest rate shock", either because they must roll over a cluster of short-term debt (US, France, Spain) or because deficits are so large.

Countries that "fail to demonstrate the level of social cohesion required to stabilise debt" will lose their AAA rating. "Intra-generational" conflict between young and old requires careful handling.

 Whatever way you look at it, Europe and the US is in for a ride into double dip recession. Best come to terms with that ‘fact’ and decide how you can prosper from it. Dick Stroud

Saga and the AA float along on a sea of debt

Acromas is the holding company behind the AA and Saga. Thanks to one of those eye watering deals, done at the height of the private equity era, it is running as fast as it can pay its mountain of debt.

The group operating profit of £183.5m was wiped out by interest payments of £705m.After including a small loss on the group’s pension schemes, the pre-tax loss was £529m.

In June 2007 a private equity consortium acquired the group in a deal valued at £6.3 billion funded by £4.8 billion of bank borrowings and £1.5 billion of shareholder loans. The three buyout firms in the consortium put only £1m of equity into the deal. Before the merger, AA and Saga had £2.8 billion of debt between them.
As from nowhere a couple of extra billion pounds was added to the value provided an excellent reward for the financial wheeler dealers.

The result is a group of companies with a massive debt that is out of all proportion to the ability of the business to repay.

The accounts show that net debt rose last year by 3.5% to £6.4 billion, including bank loans of £4.9 billion, which its owners do not have to start repaying until 2015.

The only way out of this position is to float the company but somehow I don’t think the City will be that daft.
Last week Saga made a £102m takeover offer for Nestor, one of Britain’s biggest providers of home carers. I just hope the management of Nestor only consider a cash deal.

It is interesting that Saga is moving even further into the residential care market. I wonder if they think they are selling to their existing customers or their children? As Saga’s customer base ages it would seem sensible to recognise this fact and forget any pretensions to be targeting the baby boomers and focus on the old-old. Dick Stroud

Dell really should start thinking about its customers

Here is a free bit of consultancy advice for Dell and anybody else that deals with older people via call centres. Some of your customers might be a tad hard of hearing – not deaf – but with their hearing not functioning as it did when they were 21 years old.

Yesterday, I needed to try and re-arrange a delivery of a computer. This required me to talk to Dell’s carriers and to my ‘customer care’ rep. One based in Ireland the other in India.

Both conversations were perfectly amicable and the operators were courteous and well briefed. The trouble was I found it next to impossible to hear either of them, so the conversation was a constant stream of “can you say that again” – “pardom me” – “you will have to speak louder”……

Needless to say that my problem was not resolved but that is par for the course but at least I would have liked have had a stress free conversation.

Mr Dell, this is what you need to do. Mystery shop your customer care, and any other phone based customer contact system, with people who have hearing levels that are average for their age. If, as I think you will find, people over the age of 50 find it difficult to hear what is going on then do something about it.

Maybe I should buy myself one of these phones (Amplicom) that have just been launched in the US. Dick Stroud

Unemployment is bad whatever way you look at it

One argument says that this recession has been particularly bad for young people as their rate of unemployment increases. Another argument says the recession has been a nightmare for older people since once they are unemployed they cannot get a job. Of course both arguments are correct as is illustrated by the graphs.

Yesterday the ONS reported the data about long-term unemployment. My chums at PRIME have written an excellent summary of what the numbers mean. The bottom line is that:

There are now 3,605,000 people, men and women, aged 50-to-64 who are workless. That is over 32 per cent, or fractionally below one in three.

I just wish the media would not get into the idiotic game of linking the employment prospects of people at both ends of the age range as if when one age benefits the other must suffer.

Sorry to take a hard-headed attitude to these numbers but from the point of view of marketers you have to decide what parts of your customer base are going to be the least affected by the recession.

A good starting place is to get a firm grip on the actual numbers. These graphs only represent the first level of analysis since the term 'unemployment' has many meanings. Still, getting to the first base is not a bad idea. Dick Stroud

Designing accessible icons

This blog posting is only for those interested in designing Web sites and their components that have maximum accessibility. All you ever wanted to know about designing icons. Dick Stroud

iPad a hit with the older Japanese?

Bloomberg has article about the popularity of the iPad with older Japanese folk.

It is something of a fact free article but if, like me, you are convinced of the iPad’s appeal to the older market, worth reading.

As usual there is a comment from an Apple spokesperson saying: “We don’t disclose sales by country or demographics.” Dick Stroud

Going up – going down – going up – going down and down and down

This is the share price chart of Southern Cross, the UK’s biggest care homes group. Another dip in price  after it warned about its full-year profits

The chief culprit, according to the company, are local authorities who are cutting back on funding for residents.

Southern Cross, like most of the care homes groups has made horrible financial mistakes, but today’s problems are all about the repercussions in the cuts in Government spending.

The terrifying this is that the real cuts have yet to occur.

The first victims of the cuts are not going to be felt in the public sector but the zillions of contractors that rely on state spending for their livelihood. Many of these companies have only known a market environment where they have a single customer – the state. They had better start (and fast) acquiring the skills to sell to the citizen.

I fear this is going to be a step too far for many of the care providers. Dick Stroud

Retiring habits of US boomers

Jo Coughlin has a thoughtful item in his blog about the changing retirement habits of US Boomers. Amusingly titled: “Should I go or should I stay” – the Clash – remember them?

So will today’s 60-plus following in the footsteps of the parents and move after retirement? The big difference between the US and the UK is that the US has some places that have decent weather so there is an incentive to move and get the sun. Us poor sods in the UK just have dismal weather wherever we live.

I thought these facts about the US were fascinating:

• The annual growth in retirement-destination counties has declined from 3.1% between 2000-2007, to 1.7% between 2007-2009.
• 126 of 440 retirement counties in Arizona, California, Florida, and New Mexico lost population over the last two years.
• 33 out of Florida’s 43 retirement counties grew at a slower rate than prior years while seven counties lost population.

No doubt about it, the “stay-in-place” behaviour seems to be spreading. Of course another explanation is that moving at the point of retirement has been delayed not stopped. 75 is the new 65 etc etc..Dick Stroud

The old–old are getting older

The population is ageing. I know, tell me something new.

OK, well according to the ONS the fastest population increase is in the number of 85+.

In 1984, there were around 660,000 people in the UK aged 85 and over. Since then the numbers have more than doubled reaching 1.4 million in 2009. By 2034 the number of people aged 85+ over is projected to be 2.5 times larger than in 2009, reaching 3.5 million (5% of the total population).

It doesn’t take a genius to realise that this will have some mega consequences for the provision of health, care and residential services.

There is going to be money to be made in the oldest of old market. Dick Stroud

"Cyberchondriacs" are on the rise

Not that it comes as a surprise but it is still worth saying: “the Web is the place where people go to look for medical information.”

The Harris poll found that the proportion of those who are online, and have ever used the Internet to look for health information, has increased to 88% this year, the highest number ever. In addition,  81% of all Cyberchondriacs have looked for health information online in the last month - 17% have gone online to look for health information ten or more times in the last month.

Cripes there must be some sick people out there.

Whilst the study does not separate the results by age it has been my experience that Web savvy older people are just as likely as the young – more so since they tend to have more wrong with them – to use the web for medical information.

Bottom line. If your products are in anyway connected with the health of older people then you had better take your Web presence seriously. Dick Stroud

GE and Intel form a joint venture company

Laurie Orlov’s blog has an important item about the joint venture company formed by GE and Intel to develop products for the home care market.

If you are in the least interested in the use of technology,  to help with the care related problems of the ageing population, then I really encourage you to read this item.

Considering GE’s and Intel’s size, they have made very little impact in getting technology to the forefront of helping with the care and medical related problems.

The blog post offers some valuable insights why this has been and how things might change.

Hopefully, this new venture will stir the other suppliers and new entrants to remove their digit and get into the market. There is an obvious need that nobody is fulfilling. Dick Stroud

Enjoy the “empty nesting” whilst you can

The Observer reports ‘research’ showing that parents are both better-off and happier once their kids leave home.

I quote:

A poll of 2,000 parents whose children had recently gone to university found that most felt fitter and richer, with better social lives and an improved relationship. On average the parents questioned felt "10 years younger"; had increased their circle of friends by five people, and were able to socialise three extra times each week; and had taken up new hobbies such as foreign travel and keeping fit, with more than half dreaming of an "extreme hobby" such as snowboarding, bungee jumping or white water rafting.

These parents had better make the best of it since the chances are that their kids will be back home before too long as they evolve from being students to boomerangers. Dick Stroud

What women want - according to Yahoo!

This is an interesting white paper from Yahoo! about the effectiveness of the different channels to reach women. I really liked the visual methodology that was used to represent the results.

Maybe it is not surprising that the results indicate the effectiveness of Yahoo’s online presence.

I found this paragraph interesting.

Companies may be better served by understanding women’s core “needs” or what drives and motivates them rather than subscribing to existing stereotypes about “Xers vs. Millennials”, “moms vs. non-moms”, “stay-at-home moms vs. working moms”. Understanding women’s need states allows marketers to have more relevant conversations with them.

Sounds like age-neutral marketing to me.

The presentation is available on SlideShare. Dick Stroud

Lack of innovation in the Healthcare Industry

The Diamond Digital IQ study found that only 3% of healthcare companies were focused on innovation as their primary strategic emphasis. That is terrible.

The author of the blog posting (John Sviokla) goes on to suggest how the iPad and other new mobile technology could be used in the Healthcare sector.

Since older people are the greatest recipients of healthcare then his thoughts are particularly relevant to this group.

During the past few months I have spent far too long sitting in doctor surgeries and visiting hospitals and observing how they operate.It is terrifying!

I totally concur with all of the author’s suggestions. My big concern is the lack of data management infrastructure to support the iPad and other delivery devices. The iPad is perfect for integrating video, graphics and data at the point of need, but only if the data processing infrastructure is up to the job. Unfortunately, in the UK it isn’t.

I can see that the use of these new technologies will widen the gap between the standards of private and public healthcare provision. Dick Stroud

Insights into new product design and the older consumer

Jo Coughlin, the founder and director MIT AgeLab has been a busy blogger.

His own blog has an interesting article about the drivers of product design. He is also featured as CNBC's guest blogger.

There were a couple of paragraphs that struck a resonance with me.

There is no physiological nor psychological reason why fun is not a design element for older adults. Rather than a problem of the user, it is instead the lack of imagination of designers, engineers and market researchers. A product such as Nintendo’s Wii, even 'old fashioned' card games, show that older consumers must be made excited to buy, use and adopt. 

Over the weekend I have been writing about the iPad and a word that I kept wanting to use is ‘fun’. Somehow it doesn’t sound very businesslike but it is powerful driver to purchase. I am glad that Jo used it in his blog.

Often, the reason older consumers do not adopt these technologies is not due to "techno-phobia" nor usability. Instead, the technologies have failed to provide compelling value to a more discriminating consumer.

There is a lot going on in the UK to try and get the 6 million older people who are not on-line to become connected. Time and time again, when articles appear about the inability of older people to use technologies there are a host of comments saying that it has nothing to do with ‘ability’ but all to do with ‘need’. Now I know that saying “I cannot see the point” is a convenient excuse for not to do something but it many cases it is correct. Dick Stroud

Nielsen looks at who is using the iPad and iPhone

Nielsenwire blog contains the result of a survey of 64,000 mobile subscribers who were contacted during the period April through June 2010.

This survey concluded that 15% of iPad users are more than 56 years old compared to 33% of all mobile subscribers. What a strange age range – not 50 years old – not 55 years old but older than 56 years.

It looks like the affluent 25 to 36 year olds have the greatest propensity to buy Apple products. As income grows the willingness and ability to pay for more sophisticated devices increases, too. About 20% of wireless subscribers report earning more than $100,000, but almost 40% of iPad owners fall into that category.

Nielsen believes that: “over time, we believe those over 56 age segment could represent a significant growth opportunity for Apple. While these baby boomers are not known as early adopters, they do adopt, and we should not underestimate the appeal of Apple’s products as easily and intuitively usable devices for consuming content and Internet data.”

I couldn’t agree more. Dick Stroud