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Brand Loyalty: Like It Now, Love It Later

Researchers show why it's good that the elderly habitually stick to their favorite brands and how less ambitious shopping can make you a happier senior.

Next time your 80-something dad decides to buy a new TV, escort him into a big electronics shop and watch the way he makes his decision.

If he's not a big-time electronics buff, there's a good chance that rather than trying to remember statistics from Consumer Reports and making a painstaking evaluation of his options in high-definition, theater audio and compatible cabling, he'll wander up and down the aisles until he focuses on something that looks like what he wants and says, "Sony. They're usually good. Let's get that."

A rich future belongs to the marketers who can gain the brand loyalty of old folks. As longer lives and dwindling birthrates expand the ranks of the aged, by 2030 the cohort of people over the age of 65 will be spending one out of every five dollars spent in the United States. Madison Avenue calls it the mature market.

How seniors shop has stirred a dialogue between psychologists and economists who together are re-examining memory, cognition, rational decision-making and habits.

And unlike some who see strong brand habits in the elderly as a sad byproduct of cognitive decline, Aimee Drolet, a 40-year-old professor of business at the Anderson School of Management at the University of California, Los Angeles, says those habits comprise a healthy heuristic repertoire that will ease and enhance rather than limit us as we move along the path to Golden Pond.

Because brand loyalty can develop early in life and older consumers are less likely to switch, brands that establish themselves as favorites now, such as Toyota cars and Apple electronic devices, may enjoy long-lasting advantages fending off new competitors as core customers age. Studies in France showed that older consumers preferred older, longer-established brands of cars and perfumes. The older the buyer, the greater the preference for old reliables when making repeat buys.

Your first impulse when anticipating being old and set in your ways is to conceive of it as an entrapping rigidity. Yet Aristotle saw habits in a positive light, especially for the way they underpinned ethics. So does Drolet.

And according to Drolet and Patrick Suppes, emeritus professor of philosophy at Stanford University, there's evidence that habits play a more active role in decision-making than "rational choice theory," a very influential idea.

Most sociological rational-choice theories assume that people behave rationally in a broad sense and that this allows social scientists to make generalizations about the outcomes of individuals interacting with one another, according to a brief description in the New Palgrave Dictionary of Economics. The theories are very important to the influential brand of microeconomics popularized by economist Gary Becker and others.

Two years ago, Drolet and Suppes presented a research paper arguing that habits constrain choices, mostly unconsciously, even when the choices appear on their surface to be purely rational. The paper was presented at a 2007 conference in Italy and appeared in the printed conference proceedings, Reasoning, Rationality and Probability, published by Stanford's Center for the Study of Language and Information.

Backing up Drolet and Suppes' conclusion was a survey the authors conducted of 575 adults, age 18 to 99, identifying their best and worst habits — drinking too much, late for appointments, watch movies regularly, leave a tip regularly. The survey found general consensus on what is good and bad, for the most part independent of age. (The biggest differences came up over body care, personality traits, nervous tics, cars and organization and cleaning.)

This broad consensus across the generations about what are good and bad habits helped convince the authors that the mystery of rational choice is something more than the simple matter of rational actors seeking to maximize gain and minimize pain; rather, it includes something sublime and self-taught.

"We often describe such choices as instinctual, as 'I like what I like and I can't say why,' or as 'the one that seemed familiar but I can't explain why,'" Drolet and Suppes wrote.

But those choices aren't completely instinctual.

"The message we are trumpeting is that of learning to recognize the guidance and the help we can get from such association" with subconscious preferences, the authors wrote. "Or perhaps even more, from those that do not rise to consciousness, but that are expressed in action by our actual choices."

What does this mean when seniors walk into Costco and get behind their shopping carts?

"I have a much more sanguine take on the elderly than a lot of people, particularly than the press," Drolet said in a recent phone interview. "Surely there is some cognitive decline, but in laboratory study, cognitive decline is only one area of intelligence. In life there's very little evidence that decision-making and mental functioning declines to where older people can't manage their finances and consumption."

Does that mean older people are well-served by brand loyalty that may arise from habit?

"That's hard to say," she answered.

If she has doubt, it may be because of the nuanced picture of elderly shoppers that emerges from the new book — The Aging Consumer: Perspectives from Psychology and Economics (Routledge, 2010) — Drolet edited with Norbert Schwarz and Carolyn Yoon of the University of Michigan's Ross School of Business. The book's chapters consist of papers from a 2008 conference.

There's no doubt memory declines with age, but there's a lot more to it.

One of the papers in the book explains that older people focus more on emotional meaning and messages rather than advertising or marketing that appeals to pure reason. Advertising is more effective with a message such as, "If your passion is coffee, then your pleasure will be Coffea. Join in the joyous celebration of this magic bean ...," than with a message such as "... choose Coffea. A gourmet blend at grocery store prices, Coffea provides an excellent value."

One possible explanation is provided by a theory called socio-emotional selectivity. Developed by Stanford's Laura L. Carstensen, it states that motivation changes with changing time horizons.

When we're young and time seems limitless, we're hungry for information, even information that's not immediately useful; with a sense of our approaching mortality, on the other hand, we tend to pursue satisfaction in the present and devote ourselves to social connectedness, feeling states and emotional meaning, all of which can be experienced and enjoyed now.

We're also better at managing our emotions, so that instead of pitching a fit when the GPS doesn't work in your new Corolla, you're serenely reconciled to the inconvenience. You're no longer as sharp-eyed a comparison shopper - or as cranky when the experience falls short. Or as Drolet says, "maximizers" of their consumer experience become "satisfizers, and you're happier."

Yet marketing to today's baby boomers in anticipation of lifetime loyalty isn't as simple as all that.

Explicit appeals to age can be a disaster, write Harry R. Moody, director of academic affairs for the American Association of Retired People, and Sanjay Sood, a UCLA colleague of Drolet's. They point to failures such as H.J. Heinz's easy-to-digest Senior Foods, Johnson & Johnson's Affinity shampoo for "older hair," and Southwestern Bell's separate Silver Pages telephone directory for oldsters. It's dangerous to hit old people over the head with the idea that they are old.

So a new line of Zappos-Ortho shoes or Apple iMed drug managers may not be the way to go.

Age-affirmative brands, such as the Sun City Retirement Communities in Arizona, prosper partly because the brand is linked with positive associations that stay consistent over time, Moody and Sood write.

By and large, seniors are happier with what they buy. Indeed, one of the papers in The Aging Consumer, by Drolet's co-editors Schwarz and Yoon, and Fred Feinberg, is titled, "Why Do Older Consumers Tell Us They Are More Satisfied?"

In our interview, Drolet cited the "consideration set" and choice overload, where too many choices create confusion. Separate research has shown that abundant choices — the average supermarket now stocks 45,000 products — can actually depress sales. In such an environment, old folks fall back on favorites.

"There are benefits, such as not spending 10 minutes in the aisles figuring out what's happening," Drolet says. "There's a lot of knowing better about how to get deals, being more efficient, part of it aided by the fact that you've already gone through a lot of search and have settled on a product brand that has served you well enough."

Drolet says that with the cognitive decline of aging you rely on heuristics and a good one is to buy what you bought before "because you don't know what consumption experience will be like with another brand."

The brand you know, that you habitually turn to, becomes like a life partner.