Todd Hale, Senior Vice President, Consumer & Shopper Insights, The Nielsen Company
Grandparents are a family’s greatest treasure. They enrich the lives of their grandchildren with traditions, stories, home-cooked meals and unconditional love. For many, their greatest joy is to lavish with love and spoil with splendor. And considering grandparents represent a sizable target (69.6 million according to Grandparents.com), which will continue to grow another 11 percent between now and 2015, retailers and manufacturers would be wise to tap into the “multiplier effect” they represent.
Doting Dollars
Nielsen’s research reveals that grandparent households spend 4.4 percent more per year than all other households, which equates to an extra spend of more than $300 a year. Interestingly, having multiple grandchildren does not translate to more spending. In fact, grandparents in the survey with only one grandchild actually spend two times more than grandparents with 2–10 grandkids. The exception is grandparents with more than 10 grandkids – they actually spend $79 less per year than non-grandparent households.
Grandparents with one grandchild are likely younger and still working and may be more inclined to show their love with greater spending. Similarly, households with more grandkids are likely to be older and therefore have weaker spending power.
Fully 39 percent of grandparents in the Nielsen survey provide some kind of support to help their grandchildren. Nearly one in four (23%) buy clothing for their grandkids and one in five purchase food and beverages. Mom and dad benefit too, as grandparents help out with household and personal care purchases (16%), education expenses (10%), daycare costs (8%) and medical care/doctor visits (5%).
Retail Therapy
With more free time on their hands, grandparents shop more frequently than the average consumer on an all-outlet basis, but where they shop and what buy might come as a surprise considering the status of their empty-nest household. This is especially true for grandparents with just one grandchild who over index considerably for spending on toys and sporting goods, and all things baby: baby food, disposable diapers and other basic necessities. And, of course, no grandparent can resist showing off their beautiful grandchildren with a brag book full of photos.
Grandparent households spend more than average in a number of retail channels – especially those with greater gift-giving options. Supercenters, warehouse club outlets, dollar stores and convenience/gas chains all over index compared to non-grandparent households. With fewer mouths to feed, it is no surprise that they spend less than average in the grocery channel. However, Nielsen’s research also showed how grandparents who see their grandchildren daily or several times per week (one-third of those surveyed) are bigger spenders, suggesting opportunities for grocers to take advantage of those frequent visits.
Accessible and Connected
If you want to reach grandparents, television is a good bet. Older populations watch more television than their younger counterparts. During fourth quarter 2010, Persons 65+ viewed over 46 hours of live television on a weekly basis (by far the most of any group). They also played back more than 90 minutes of recorded programming each week (the lowest of any group). By comparison, Persons 35-44 viewed over 30 hours of live television and played back more than three hours of recorded programming (the most of any group). With most grandparents free from navigating work schedules and busy households, more time at home is driving some of this behavior.
If you think that older consumers aged 50+ are not digitally savvy, you are mistaken. In fact, in December 2010, Nielsen reports that consumers aged 50+ in the U.S. comprised roughly one-third (32%) of the active Internet audience on average taking into account usage at both home and work locations. And older consumers spent nearly 62 hours online in that month. Sending and receiving email is the most popular online activity, with 82 percent of grandparents finding this mode of communication fast and easy. Paying bills, checking the weather, printing maps and directions, reading the news, visiting social network sites, accessing personal health care information and playing online games are activities enjoyed by a surprisingly high number of older consumers.
Mobile phone usage, while significantly lower for consumers aged 65+ compared to the younger set, it is rapidly catching up. On a monthly basis, they made 104 calls, but only sent or received 41 text messages. Perhaps the hand dexterity of older consumers may contribute to the minimal usage of short message service capabilities – an opportunity for mobile providers to specially design phones for fingers that may not be so nimble anymore. The mobile behavior of the next generation of grandparents is clearly in the “texting” camp.
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Redefining Old Age
Today’s older consumers are active, connected and big spenders. And while this segment represents a disproportionate share of marketplace consumption, they are often overlooked in marketing plans. There is a tremendous opportunity to dig deeper to understand what the older set watch and buy. Developing targeted programs designed around their varied needs and desires will prove beneficial for the savvy marketers that tap into these lucrative households.
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Supply chain technology firm JDA Software Group Inc. today announced a package of enhancements to its core software applications that JDA said will improve users' ability to predict consumer demand and deliver faster fulfillment.
The enhanced platform, called Luminate, extends existing JDA applications by connecting them to sources of data both within and beyond customers' extended supply chains, integrating information from additional systems, trading partners, machines, and networks, Desikan Madhavanur, JDA's executive vice president and chief development officer, said in a keynote at the firm's user conference in Orlando, Fla.
Luminate then helps users generate decisions from real-time data by applying digital edge technologies such as software-as-a-service (SaaS), the Internet of Things (IoT), artificial intelligence (AI), and advanced analytics, he said.
Those tools can analyze traditional supply chain data as well as external information like social media, news, events, and weather (SNEW), Scottsdale, Ariz.-based JDA said. The resulting information can match demand and supply continuously for applications at every point of the supply chain, connecting stores, distribution centers, logistics, and manufacturing in a digital network, according to the company.
While the concept of applying external signals to supply and demand forecasting is not new—for example, JDA has partnered with Berwyn, Pa.-based weather analytics provider Planalytics Inc. for years—Luminate brings that information deeper into the decision-making process, Pruneet Saxena, JDA's group vice president for supply chain planning, said in an interview.
For example, the Luminate Control Tower will help users predict events and suggest responses, allowing companies to weigh options and compare 'what-if' planning scenarios in response to potential delays in deliveries from suppliers, Saxena said.
Luminate will enhance JDA applications in demand forecasting, factory production planning and scheduling, strategic planning, store optimization, supply risk remediation, and transportation and warehouse modules, the company said. In addition, JDA is applying Luminate to JDA Assortment, an enhancement and renaming of the company's Retail.me solution for predictive product stocking and inventory quantity, the company said.
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