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Louis Kelly, a 73-year-old part-time real estate agent in Dallas, had shied away from computers. Like many people born long before the tech boom, he was convinced that they were too complicated to use. But six months ago, an advertisement in Parade magazine about seniors citizens surfing the Web on a smaller, simplified Internet-only computer called an i-opener caught his attention. Now, Kelly is among the thousands of seniors using Netpliance's (NPLI
) product for everything from e-mailing the grandkids to researching real estate online.
As for Austin (Tex.)-based Netpliance, it's just one of the tech companies looking to reap profits from marketing strategies aimed at seniors. From giants such as IBM, Microsoft, and Charles Schwab, to startups such as specialized search engine WiredSeniors.com, companies are aggressively courting elderly customers.
Why? Because older people are now logging onto the Internet at a faster rate than any other age group. According to Forrester Research, 23% of adults 55 and older are now online -- almost double last year's level. The U.S. Commerce Dept. says in the last four years, the number of seniors online has quadrupled to 14 million.
STAYING PUT. The big question now: When will seniors embrace cyber-shopping? So far, the elderly have been the least likely age group to shop online, despite the e-tailers' earnest efforts. According to SeniorNet, a San Francisco-based nonprofit group that provides computer training to adults age 50 and over, credit-card fraud tops the seniors' list of concerns. "Don't try to get a credit-card or Social Security number from them," says Danna Sue Spayde, coordinator of the Senior Net Learning Center in Baton Rouge.
Still, market researchers believe that more seniors will start shopping online as they gain more experience surfing the Net. "It just takes them longer to make their first purchase," says Forrester analyst Henry H. Harteveldt. "Many [take] as long as five years, from the time they get connected until they make it to their first online checkout." To calm fears and lure potential customers, Southwestern Bell recently launched an Internet fraud-awareness campaign specifically geared to seniors. And online auction powerhouse eBay is offering advanced e-commerce classes encouraging senior surfers to shop online at new training centers it's setting up.
For dot-coms hungry for market share, seniors could be a godsend. In many cases, retirees have more time and disposable income than younger Netizens. Another plus: Studies show that once older users are online, they stay there twice as long as any other age group. That means plenty of time to load up the virtual cart and soak up the blitz of online ads.
So what are dot-coms doing to convince skeptical seniors that the virtual world is safe? Take a look.
BACK TO SCHOOL. eBay (EBAY
), the San Jose (Calif.) online auction house, created a special antiques site last year. It has been advertising the site on senior-oriented niche sites since then. But eBay quickly discovered that many seniors simply aren't comfortable enough with computers to visit its site -- let alone shop.
So, to bridge the generational digital divide and expand its own customer base, eBay has set up a partnership with SeniorNet. Together, they're opening 10 senior computer training centers across the country. "This demographic is the largest growing population to get online. But until you implement training, no one will benefit," says Stacy Dieter, vice-president for business development at SeniorNet. The nonprofit already has 210 of its own U.S. tech schools for seniors, plus five overseas.
For only $30, the six-week class offered by eBay and SeniorNet will teach basic computer skills and online-shopping techniques. So far, not many seats have gone empty. More than 38,000 seniors have signed up, and waiting lists in many parts of the country are more than a month long.
COURTING SENIORS. Meanwhile, IBM (IBM
) has deployed more than 40,000 volunteers -- many of them retired techies -- to help staff SeniorNet's own training facilities. Along with Microsoft, IBM is donating PCs and software to the cause, too. In return, SeniorNet divvies out both companies' discount coupons to successful students -- which probably isn't cramping sales for either one. "They're a part of the digital divide that many people really haven't paid attention to," says Leslie M. Smith, a marketing executive with IBM. "SeniorNet's training facilities have provided us with access to this mature market."
Investment companies are courting seniors, too. Charles Schwab (CSC
), which already has 4.2 million online investment accounts, is now sponsoring an Online Investment Education Center on SeniorNet. The Web site teaches older folks how to get investment information online and is being advertised on numerous senior niche sites. "On the business side, it's real smart to monopolize this customer. Companies are starting to see this," says Spayde.
Still, obstacles unique to seniors could keep many from ever logging on at all. Health problems such as arthritis, cataracts, and difficulty distinguishing colors make the virtual world uncomfortable for many. "Direct marketing is going to be a big part of the future for attracting this age group online. But you have to know how to do it right," says Gail R. Fudemberg, president of Chicago-based GRF Marketing and Seniorsessions.com, which offers research on the senior market. She urges her clients, mostly health-related Web sites, to use colors that can be easily deciphered (like red, orange, and yellow), and as little text as possible, so users don't have to scroll down. Of course, offering senior discounts -- as many e-commerce sites are now doing -- doesn't hurt either.
FINDING PALS. As baby boomers grow older, hundreds more sites for seniors will crop up, analysts say. "There are a lot more players out there for this market, and the competition is fierce," says Randy Marsh, president of portal WorldwideSeniors.com in Phoenix, Ariz. Another portal player, Bob Gould, president of WiredSeniors.com, says many older folks prefer to use his simplified search engine because it doesn't house as many domain names as big rivals such as Yahoo! and Alta Vista.
What are senior surfers doing online? According to Gould's traffic statistics, the most popular activities include looking up old friends, constructing family trees, making electronic reminder calendars, and, yes, meeting potential partners through sites like Seniormatch.com.
Shopping for antiques, software, or mutual funds doesn't top the list -- at this point. But hundreds of companies are betting that one day, with the graying of the baby boomers, that will change.
By Nicole St. Pierre in Washington Edited by Thane Peterson
Copyright 2000, by The McGraw-Hill Companies Inc. All rights reserved.
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