The holiday season not only marks the height of retail spending in the U.S. and in many regions around the world, it also helps to mark the passage of another year. As we flip our calendars and time marches on, it may be time to start thinking about the inevitable:
Someday, you’ll be a “senior” (if you’re not already) — but it’s not all downside.
While an AARP (American Association of Retired Persons) card may not be the shiny new toy you were hoping to see under your Christmas tree, membership to this association does have its perks. In addition to information and advocacy around issues impacting older Americans, AARP memberships (available to those ages 50 and older for a $16 annual fee) give its base of 37 million people access to a wide variety of “senior discounts” that range from booking travel, to buying insurance, to taking defensive driving courses and to paying their mobile phone bill. In fact, these famed discounts are one of the main reasons most members actually join.
But how many people actually take advantage of these discounts, and are they worth it for the retailers who participate in these programs? We dug a little deeper to find the real value, for retailers and consumers alike, behind these types of membership discounts.
While it might be tempting for retailers to keep their sites set on courting millennials, seniors are an important, if not price-sensitive, demographic to cater to. With the number of senior citizens (defined, in this case, as those 65 or older) expected to soar from 40 million to 89 million by 2050, according to U.S. News and World Report, the senior spend cannot be ignored.
As Charles Passy points out in an article for MarketWatch, many of today’s retirees easily fall into the “mass affluent” category, meaning they saved enough in their 401(k) accounts. And one of the easiest ways to catch their attention is to “play the penny-pinching card,” as Passy puts it. In this context, senior discounts are not just a way for associations like AARP to collect dues, but they are also a smart commerce play for brands.
According to Dave Austin, vice president of marketing for AARP Services, nearly 80 percent of AARP members take advantage of these discounts annually. That is a lot of exposure for brands participating in the discount program. Austin goes on to note that travel discounts are some of the most popular among AARP’s members, with up to 25 percent off rental car prices at Hertz, National and Alamo, as well as 20 percent discounts at Sheraton, Weston and Ramada hotels.
These discount deals not only drive sales for these travel brands but also serve as an important feedback loop, giving them deeper insight into this travel-prone demographic.
According to a recent study released by AARP Travel, Baby Boomers spend an estimated $120 billion annually in leisure travel, with an astounding 99 percent of older Americans surveyed saying they plan to take a trip in the coming year. Also surprisingly, while more than half of the Gen Xers and Millennials surveyed said price would be a major consideration in planning travel, only 45 percent of older Americans agreed.
It’s that kind of insight that can help brands execute the right marketing strategies across age groups, as AARP Vice President Stephanie Miles points out that “Boomers make up a large segment of the traveling public, and so it’s particularly important for the travel industry to be aware of what Boomers are looking for in their vacations going into 2016. This new survey finds that their travel desires often differ greatly from younger travelers.”
There are clearly benefits on both the consumer and retail side of the equation. However, a pressing question remains: Can anyone get the same deals by simply asking a retailer for the senior discount?
Money Talks News recently investigated this question, finding that many major retailers offer standard age-based discounts, no membership required. At Outback Steakhouse locations, seniors save 15 percent off lunch or dinner Monday through Thursday, while Dunkin’ Donuts offers a free doughnut to seniors with the purchase of any large or extra-large drink. Seniors also save 45 percent off the price of membership to Angie’s List and 5 percent off all plans at Consumer Cellular.
To be eligible for most of these discounts, though, one has to be at least 60 years old. AARP members — remember that’s people age 50 years and older — can start taking advantage of discounted pricing nearly 10 years earlier than their non-member counterparts, and when it comes to age-based discounts, timing certainly is everything.*
*Because the gaping maw of death awaits us all. Happy Hanukkah!