Connecting with older consumers

Apple’s success with its iPhone and iPad has been the consumer technology success story of the year. Dick Stroud explains why these products are particularly relevant to older consumers and the implications this has for marketers

The statistics of the growth in popularity of the app are staggering. Apple opened its online App Store in the middle of 2008. Within ten months the billionth app was downloaded. The same number again were downloaded by the end of 2009. In October 2010 the store contained more than 300,000 apps and has processed seven billion downloads.

While a quarter of all apps downloaded are free, they do generate significant revenue. In December 2009, the 58 million people who downloaded apps paid a quarter of a billion dollars for the pleasure.

The term ‘app’ has long been used by the IT community as shorthand for a computer ‘application’. Since its adoption by Apple it has come to mean a bundle of functionality and content that you access via an icon on a touchscreen device – firstly the iTouch and iPhone and most recently the iPad.

There are millions of things an app can do, from playing Sudoku to finding the best train route home. If you can do it on the web you can do it using an app.

The combination of the app and the touchscreen, to create the smartphone, has resulted in a symbiotic relationship that has revolutionised the mobile phone market. In the 12 months to June 2010, the smartphone increased its penetration of the US market from 16% to 25%. In the same period, consumers in the five largest countries in Europe bought 57 million of the devices – a 38% increase on the previous year.

For many consumers, Apple and app are synonymous. This is a false conclusion because Google, with its Android operating system, has three times the European smartphone market share of Apple. Where Apple still dominates is the number of apps designed for its products, which is three times as many as for Google’s operating system.

 Competitive angle

What of the Blackberry? The most recent data from Nielsen suggest that more than half the users in the US intend to swap to a smartphone.

The most recent phase of the app’s evolution was marked by the launch of the iPad, a device with ten times the display area of an iPhone that developers can use for their applications. Reading the Financial Times on the iPhone was possible but it is a great deal easier on the iPad.

It is obvious that apps and their associated technology platforms create radically new ways for consumers to interact with each other and with companies. If marketers concluded that these developments were only relevant to the digital-native, younger consumer, they would be making a serious mistake. For reasons explained in this article, the combination of apps and touchscreen devices is particularly suitable for older people. So much so that it provides marketers with a way of engaging with those older consumers who have felt excluded from web-centric communications.

Why does it appeal to older Consumers?

The astonishing statistics of the success of apps are testimony to the technology’s appeal. There are four main reasons for its particular relevance to older people.

1Sensory: After a decade when manufacturers made portable devices as small as possible, with all of the dexterity and eyesight problems it creates for older users, the smartphone and now the iPad have reversed the trend and are bigger. For older people, larger keys and bigger screens are easier to use, especially when the luminosity can be increased along with the size of the characters. Being able to directly ‘touch’ the application, rather than having to use keys and pointing devices, is much easier for older fingers.

Voice input has been possible for years but the smartphone and iPad raise it to a new level of sophistication. Now you can speak your search words into Google and dictate your texts.

In short, smart devices make it easier to cope with the sensory decline associated with physiological ageing.

2 Cognitive: Even the most technologically adept can be confused by the complicated menu systems of the PC and mobile phone and the accompanying multilingual user manuals. For somebody with little experience or interest in technology, learning the basic controls of these devices can be a daunting task.

The user interface architecture of apps is far simpler. Each screen icon is a single application. Users see only the things that are relevant to them rather than an array of options that they need to navigate.

Cognitive ageing results in a condition know as the ‘inhibitory deficit’ which results in it becoming harder for older brains to filter out superfluous information. The one-application-per-app architecture helps people to cope with this condition.

 3 Functional: It takes two screen touches and fewer than ten seconds to turn on an iPad and start reading the BBC news. This is at least ten times faster than doing it on a laptop and with far fewer interactions.

The immediacy of using smart devices is appealing to all ages and especially to older people who have not been conditioned to accept the limitations of PC architecture.

Two of the technologies that make smart devices really ‘smart’ are their connection to the internet and built-in GPS. The richness of the local content this delivers creates numerous new applications that can be especially relevant to older consumers.

The least visible aspect of smart devices is their use of micro-electro-mechanical systems (MEMS). These tiny devices (for example, accelerometers and gyroscopes) enable the app to respond to the physical movement of the device. Countering the effects of a shaking hand and knowing when somebody falls are two of their applications.

4 Philosophical: When the iPad was launched it received a lot of criticism from ‘techy’ commentators who saw it as yet another tablet PC with an appeal limited to Apple devotees. Apple sold more iPads, in the three months following its launch, than the worldwide sales of tablet computers, by all vendors, in the previous two years. Sales for 2010 are expected to top ten million. This suggests that there is more to the product’s success than just Apple’s brand reputation.

When interviewed about the reasons for its success, Apple’s chief executive officer (CEO) Steve Jobs explained that the iPad was not for people inputting lots of data but for those who wanted to consume content, be it text, audio or video, wherever they wanted, in the most pleasurable way. This describes the requirements of many older people.

The iPad’s success is not just about ‘what’ it can do but the enjoyment of doing it. We know that as people age they value ‘experiences’ more than ‘stuff’.

Apple seems to instinctively understand this and has, with its smart devices, made using a computer both functional and fun. The future for older people could be app shaped. The market research about the sales of smart devices is limited and sometimes contradictory. There is general agreement that the 55-plus age group accounts for just under a quarter of the smartphone market and is growing in its share. The chart (left) shows research from Nielsen for the sales in the US of the Amazon Kindle and the Apple iPad and iPhone.

Nielsen estimates that 22% of iPads are purchased by the over-45s. In another report, Nielsen states: ‘Over time, we believe the over-55s age segment will represent a significant growth opportunity … we should not underestimate the appeal of Apple’s products as easily and intuitively usable devices for consuming content.’

The age demographics of Kindle sales, an e-book reader that was launched a year before the iPad, is now exhibiting a significant skew towards the older age groups with the 45-plus accounting for 42% of sales. This is not surprising since people in the 55-plus age group purchase, on average, twice the number of books of 25- to 34-year-olds.

Most reviewers believe that reading a book on an iPad, using the Amazon app, is a more pleasurable experience than using the Kindle. With sales of Kindle e-books greater than the combined sales of hardback and paperback books it suggests that the use of smart devices for book reading will be a major driver of sales.

Recent research of iPad sales in the UK, conducted by YouGov, revealed that the over-55s account for 20% of sales, approximately the same level as 35- to 44-year-olds. Two-thirds of iPad users are male, but YouGov discovered that the people thinking of purchasing the product were predominantly aged 55-plus and female.

Older consumers already represent a significant customer group for smart devices and one that seems set to grow in importance.

Implications for marketers

If the challenge of integrating Web 2.0 and social networking into their organisation’s digital strategy was not complicated enough, marketers must now embrace the opportunities enabled by apps and smart devices. These are four of the most important issues that marketers must resolve.

This is ‘day one’ of the evolution of apps and smart devices. In the next 24 months there will be significant price reductions in the hardware and an order of magnitude increase in numbers of apps. Already speculation has started about the functionality of the iPad 2.

The digital marketing intelligence website eMarketer estimates that in 2011, iPad shipments will reach 36 million devices. Although slow to respond, other vendors are beginning to ship competitive products that will accelerate the downward price pressure.

Soon, hundreds of millions of consumers will spend the majority of their digital time using apps on these devices. This is not a technology that can be ignored.

 An age-neutral technology

Two of Apple’s ads for the iPhone feature a dialogue between child, parent and grandparent. The US ad features a video conversation between father and son. This must be the first instance of a category-leading consumer technology product not being marketed exclusively to the youth sector. Apple seems to instinctively understand the age-neutral appeal of its products.

Marketers need to learn from Apple’s approach and not pigeonhole the technology as an early-adopter youth product. Not only will smart devices be popular with the digitally literate older consumer but they are likely to be important in helping to reach the UK’s nine million digitally excluded over-55s.

 Post Web-centric world

In August 2010, Wired Magazine published a contentious article entitled: ‘The web is dead. Long live the internet.’ Clearly the web is far from dead but the use of apps is likely to reduce the amount of time that we all spend accessing the web, and this will particularly apply to the older generation.

For instance, in October 2010 Amazon released its Window-shop app that it bills as a ‘Top to bottom rewrite of Amazon.com – designed and built without compromise just for iPad’. Amazon is using the iPad’s video and sound capabilities to add a new degree of richness to its shopping experience.

AARP has recently released three iPad apps replacing the need to access its website. The same has happened with the BBC, LinkedIn, Google, Skype, Sky – the list is extensive.

At the birth of the web, companies aimed to get their website bookmarked. Marketers should be in a race to get their apps on the home screen of consumers’ smart devices.

Content will drive adoption

The combination of the app and the smart device creates a new platform for the consumption of media. More importantly, these devices provide a mechanism for media companies to charge for their content.

Most newspapers and magazines have launched their own apps. The global commercial director of the Financial Times said 10% of new digital subscriptions to the newspaper’s content have come through its iPad app.

News International has been at the forefront of apps deployment with The Times being one of the most innovative users of the technology. This is not surprising because, according to Nielsen, the subscribers to its content are more affluent and more engaged than the demographic of its open website.

Older people are ferocious consumers of written content. In the US the median age of magazine readers is 41 years and the over-45s account for nearly two-thirds of all newspaper subscriptions. The age skew in the UK is equally pronounced.

Older people watch more TV and listen to more radio than young people do. Marketers need to be aware that older consumers, especially those in the highest socio-economic groups, will access more of their content (and advertising) using smart devices. The apps-powered smart device is as much a watershed in the way marketers engage with consumers as was the birth of the web. Unlike the web, this new technology will be as much used by the old as the young.

Dick Stroud is managing director of 20plus30. [email protected]

 

Apple has continued to push the boundaries

of technology to simplify access to content

 

Older people are ferocious consumers of written content. In the US the median age of magazine readers is 41 years, and the over-45s account for nearly two-thirds of all newspaper subscriptions