OurTime, Knackstor, J. Jill and AARP Grow by Targeting Boomers
Customer segmentation examples using age of the consumer as the starting point are found in many categories.
For instance, financial services organizations regularly target consumers ages 55+, who on average have more assets. AARP and AMAC each focus on adults ages 50+ with insurance products and discounts for members.
Several cruise line brands, like Oceania and Crystal, also focus heavily on more mature consumers, who have the time and assets to cruise more regularly. Travel Weekly reports that Crystal’s:
“Target customer is between the ages of 55 and 64 and has an annual household income of $150,000 or more or assets of $1 million or more.”
This travel target goes well beyond cruises. The prime target market for guided tours is “active adults between 50 and 70,” according to the Wall Street Journal.
Along with Travel, Other Brands, Employ Age-Based Segmentation, Including Apparel, Media, Entertainment, CPGs and More
In the apparel category, customer segmentation examples include brands like J. Jill and Chico’s, who target more mature women. For example,
“J. Jill is a nationally recognized women’s apparel brand focused on a loyal, engaged and affluent customer in the attractive 40-65 age segment.”
For the portion of 55+ who fall into the grandparent lifestage, Grand Magazine offers content tailored to encourage strong parent-grandparent and grandparent-grandchild relationships.
According to one source, TV shows that portray older adults with hopes, dreams and rich inner lives and flaws also follow age-based customer segmentation approaches. These include: Grace and Frankie, The Kominsky Method, Hot in Cleveland, Homeland and Trust.
Consumer packaged goods companies like Danone, Colgate-Palmolive and Nestle are increasingly focusing on older consumers.
“About 20% of Nestle Health Science’s research budget is now dedicated to aging.”
Since consumption in staple packaged goods categories is driven by underlying population growth, this makes sense.
It’s clear that age-based customer segmentation examples are highly relevant and actionable in a number of categories.
But Is Age-Based Segmentation Really the Best Approach?
There is an opposing perspective that the best product or service should not vary according to the consumer’s age. Specifically, that the best product or service would not be one designed with the consumer’s age as an important customer segmentation variable. This point of view is often asserted without any real backing or insights.
When one of our colleagues, Judy Harrison of Waypoint Partners, spent a year as a Fellow for the United Neighborhood Houses focusing on aging consumers, we searched for available fact-based research and found little. Private research firm, Age Wave Consulting’s long list of clients is testimony to the need for better information and avoiding the tendency to assume that older consumers’ needs are the same as younger cohorts.
On a personal level, I recently was asked to examine how major challenging “negative” events such as the death of a family member, divorce or loss of income have impacted me. The specific exercise was:
- dividing my life into five periods, with the first quintile ages 0-11, the second quintile ages 12-23, etc.
- considering the “negative” events that happened and whether any of these negative events could be turned into a gift.
I found this painful, as I lost my mother to cancer in the first time period and my father to suicide in the second time period, both while I was relatively young. It wasn’t easy to turn these into gifts. Now, as an older adult, my response to more recent challenges has been to view them as gifts, e.g., my divorce in the most recent quintile led me to relocate to Southern California and ultimately to better personal relationships. At least for me, my approach to such important priorities as work, personal relationships and finances has changed as I have passed the 50-year old mark.
Another example comes from the life insurance category where, milestone birthdays such as 40, 50 and 60 can serve as triggers for consumers to reexamine the protection that they have in place for their loved ones. This is a well-known dynamic.
Large ‘Size of the Prize’ for Brands that are Effective with Customer Segmentation Examples to Reach Boomers
In addition to age on its own, a popular approach to understanding adult segmentation in the US is characterization by generational group, such as Gen Z, Gen X, Millennials, or Boomers. While definitions vary by a few years from one source to another, most agree that Boomers were born between 1946 and 1964.
In 2021, this means Boomers are between the ages of 57 and 75, and are approximately 73 million strong in 2020. Boomers are approximately 35% of the US adult population, controlling 53% of the country’s wealth. This makes Boomers a large and attractive target for many categories.
Adults 50+ are Interested in Working and Earning Income
Many adults ages 50+ are motivated to work and earn income, but face age discrimination and barriers to finding work.
Characterizing Boomers as retired can be misleading, since only around 40% of Boomers are retired as of September 2020. Each year, millions more retire, and the rate of retirement increased with COVID impact in 2020. Experienced workers disproportionately bore the brunt of job losses in previous economic downturns, and:
“Age discrimination remains a significant and costly problem for workers, their families, and our economy.”
A pre-COVID 2019 AARP study found that 20% of adults ages 65+ were in the workforce or looking for work and that this skewed working cohort skewed to:
“…healthier, better-educated and higher-earning, white-collar people.”
Putting this together, around 41 million Boomers are currently working or interested in working, a sizable number.
Customer Segmentation Examples: Two-Sided Job Site Knackstor and Dating Site OurTime
Started in Canada in 2020, Knackstor provides a disruptive example of a customer segmentation approach to bringing jobs to adults ages 55+. The Knackstor brand has a two-sided market:
- creating employment opportunities for the retired
- serving customers including small businesses, non-profits, corporations and families
Adults 55+ sign on to offer their services on the platform. The brand promises to help them earn, volunteer and share their skills. They set their own price for the skills that they’ve developed a “knack for” over their lifetime. The brand transparently is paid a 12% fee from their earnings.
Customers choose to hire these workers because they value their experience and see a fit. The premise is that the more experienced Knackstor also may be able to complete the job faster or with higher quality than a less experienced worker, providing the customer with a lower cost and/or higher quality. Popular categories of work include finance, accounting and marketing for small businesses, and tutoring and schooling for math and language for families.
Teri Lucie Thompson, Chief Marketing Officer of Knackstor explains:
“Just like influencers in social media, Knackstors are vibrant and dynamic people in possession of valuable experience and knowledge from a lifetime of experience. Knowledge many of us would be happy to pay for.
“Knackstor exists to harness all that experience and expertise. We are NOT just a jobs board, rather we enable and empower the most valuable and dynamic people out there, while providing easily accessible experience on-tap to other generations and other Knackstors.”
Knackstor is expanding into the US in 2021, starting with selected markets, where they’ve identified a strong base of talent and customers. While there are a number of competitors in the space for gig jobs, e.g., Upwork, TaskRabbit, Freelancer, Guru, FlexJobs, Fiverr and more, Knackstor stands out as a customer segmentation example based on understanding its target age group.
Established in 2011, dating site OurTime is specifically designed with the needs of its target in mind: the 50+ single. OurTime states it:
“Recognizes that what people want in their 50s, 60s and beyond is often very different from what they wanted in their 30s and 40s, let alone their 20s. This online dating community focuses on the specific interests..”
OurTime is part of Match Group portfolio of brands, which also includes Tinder, Match.com, Meetic, OKCupid, Hinge, PlentyOfFish and Pairs. OurTime has proven success in the fast-evolving online dating market, as OurTime is the largest dating community targeting singles 50+. Competitors with a similar target include SilverSingles, SeniorPeopleMeet, and Senior Match.
It’s clear that age-based customers segmentation approaches are relevant in many categories, both expected (like financial services and entertainment) and surprising (like job-hunting and dating).
For case studies and resources on Customer Segmentation, visit the Insight to Action resources page.
