Demographics of the Net Getting Older

Adults 55 and older represent the fastest-growing group of US Internet users, according to International Data Corp. (IDC), which found the number of seniors will more than triple from 11.1 million in 1999 to 34.1 million in 2004, and they will account for 20 percent of all new users.

IDC’s Internet Commerce Market Model™ (ICMM), found that by 2004, 103 million new users will join the ranks of the US online population — a population that will then total 210 million and more closely resemble the overall US populace. As a result of this, online merchants wwill have to adjust their business models to accommodate the changing demographics or risk profitability.

“People from all walks of life and socioeconomic status will be online users, and online households will be much more like the average household than they are today,” said Barry Parr, director of Consumer E-Commerce Research at IDC. “The increase in the number of online users will mean that marketers who have in the past avoided online campaigns will need to embrace the Internet or lose out to the competition.”

The growing number of U.S. online users and the change in demographics is both good and bad news for those who sell products and services online.

“For new entrants into consumer e-commerce, the changes and the growth in the online population mean there is still plenty of opportunity,” Parr said. “Existing online merchants who designed their business models to capture early adopters, however, will have to adjust their strategies. They’ll need to expand their offerings to attract older and lower-income households while making sure they don’t overlook the growing number of high-income online households.”

IDC found that portals, in particular, will have to work extra hard to get a large share of new users. “Many users will stick with the first portal they find and feel comfortable with,” Parr said.

Despite the increase in older Americans using the Internet, the US population that falls into the 18 to 34 age group remains the most active online users. By 2004, almost 91 percent of this group will be online.

“Many in this group already take the Internet for granted,” Parr said. “In five years, they’ll expect it to be as reliable as electricity, the telephone, and running water.”

According to Media Metrix, the number of baby boomers and seniors online grew by 18.4 percent in 1999, making them the fastest growing Internet population.

The spending habits of older Americans make them one of the most desired markets on the Internet today, according to the Media Metrix Fall 1999 Q-Metrix findings, which found that 45- to 64-year-old Internet users are more likely than other age groups to own fax and copy machines, large-screen TVs, and satellite dishes. But the strong consumptive tendency of this age group is not limited to tech-related gadgets. Of all age groups, 45- to 64-year-olds have the most credit cards and the highest usage, as well as the highest percentage of frequent-flier members. They are also more likely to buy a new car rather than lease or buy a used one.

Many of the Internet’s older users lack confidence in their computer skills, according to the AARP, which may keep them from becoming as Internet savvy as younger generations. Older computer users (56 and older), those less highly educated (high school or less), and those earning $50,000 or less expressed doubts about their proficiency significantly more often than younger users, the AARP study said.

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