Older consumers: the market opportunity...Older consumers: the market opportunity Mark Beasley Chairman: The Mature Marketing Association Managing consultant: rhc advantage [email protected]

Older consumers: the market opportunity

Mark Beasley

Chairman: The Mature Marketing Association

Managing consultant: rhc advantage

[email protected]

Why I’m here

• To help businesses to engage effectively and ethically with the

increasingly large number of economically and socially

active older consumers

• Many businesses and organisations have yet to optimise their

alignment with this strategically important group

• As a result, many older people are unable to source, purchase

and consume goods and services in the way they would like

• Addressing this market failure will benefit both business and

consumer

• To do this requires specialist insight, understanding,

resources and skills.

Scope

1. What we know

Demographics

Economic

Social

Psychological

Physical

2. Opportunity Areas

Demographics

• More adults over the age of 45 than under 45

• More people over the age of 65 than under 16

• Growth is in over-65s:

• + 1.1m in next 5 years

• + 50% in next 10 years

• + 100% in next 50 years – from 17% - 30% of population

• Baby boomers > seniors

Economic impact of ageing population

Macro-economy slows down

• Reduced output growth

• Expenditure peaks

• Savings & investment decline

• Smaller workforce, paying more tax

• Increased pressure on state

• Reduced state funding

Economic impact of ageing population

For individuals

• Inadequate provision for retirement

• Private & state pension issues

• Poor return on savings & investments

• Health and social care funding

• Longer working life

• Increased entrepreneurship

Economic behaviour of over-50s

• 35% of the population

• Income peaks at 50

• 70-80% of wealth

• 40%+ of expenditure

• Outspend younger age groups

• Driving category growth: mainstream and self-actualisation

But...

• 1.6m people 65+ living on or below the poverty line

• The next generation of 45-64 year olds will not be as well-off

When do you stop being young?

•15-24 28

• 80+ 42

• Average 35

Abrams & Vauclair

European Social Survey

When do you start getting old?

Aged 15-24 - 54

Aged 80+ - 67

Average - 58

The concept of ‘age’

is associated almost entirely

with negative attributes

Old age is culturally unattractive

• Old people seen as a burden,

dependent, feeble, frail,

inadequate, lacking in creativity

& dynamism

• “Ageism is now the most widely

experienced form of

discrimination in Europe.“

• 64% think that age prejudice is a

serious issue

New stereotypes

New stereotypes

Social disruption

• Traditional concepts of

lifestage and family structure

are increasingly irrelevant

• 80% are non-traditional family

• ‘Blended families’, ‘club

sandwich’ families, single-

person households, single-

parent families, increase in

divorce, decline in marriage...

The psychology of ageing

• Denial. Refuse to look, think, feel, behave or accept

chronological age

• Don’t pigeonhole me! Refuse to accept social stereotypes,

assumptions and prejudice

• I am an individual! I want to be defined by activities, attitudes,

desires, interests, lifestyle and needs – not age

• The Happiness Curve. Increased confidence, cheerfulness and

optimism

• Are you talking to me? Dislike of being defined, portrayed or

targeted by age

Physical ageing

• Younger for longer? People are living longer, healthier, more

active lives

• Older for longer? Increased longevity – but with disability and

serious illness

• Disablement. 50% of registered disabled people are over 65

• Physical ageing. Inevitable – but varies by age & individual

- Cognitive. Response, processing & retention of information

- Sensory. Sight, hearing, touch, smell, taste, oral

- Physical. Mobility, Dexterity, flexibility, weight & body size,

digestion, muscle strength, hair, skin, menopause, (in)continence,

nutrition

• Independence. People wish to remain independent for as long

as possible

Attitudes to marketing

• “I am still an active and

discerning consumer.”

• “I enjoy shopping – and have

the money and time to do it

more often.”

• “I feel ignored, excluded, mis-

understood, patronised and

stereotyped.”

• “I am open to new experiences

– if there is a good reason.”

Marketing Planning

• Age is not a sexy word in marketing terms

• Despite all the evidence, advertisers continue to pursue

youth

• 95% of marketing budgets spent on under-50s

• An environment which lacks empathy with older people

• 50% aged under 30

• 5% aged over 50

• Marketing lagging behind demographic change

• Targeting youth is a habit marketers have yet to break

Segmentation and targeting

Age has serious limitations as a primary targeting

• It’s not how people see themselves

• Diversity and complexity within older age group

• Blurring of boundaries across age groups

• Inter-generational purchasing (and consumption) roles

• Important role of other segmentation variables

• e.g. attitudes, benefits, interests, lifestyle, needs

• Socio-economic and health the most important

Review

entire

Customer

Experience

SERVICE Process

All points of

contact

PRODUCT Design

Functionality

Packaging

Convenience

Quality

PROMOTION Promotion Mix

Media

Communication

strategy

Tone of voice

CRM

PHYSICAL ENVIRONMENT

Access

Facilities

Recognition of

physical needs

PLACE Retail activity

Telephone

Online

Route to market

PRICE Pricing

strategies

Price promotion

Price packages

Payment

methods

Credit

PEOPLE Culture

Training

Empathy

Empowerment

Frontline staff

Playing to the co-op’s strengths

• At the heart of the community

• Local, convenient

• Ethical, socially responsible

• Current shopper profile?

• Christmas 2015 TV commercial

Marketing Communications

Better copywriting, for people who appreciate the written word

• Plain, well-written English

• Address as fellow adults

• Straightforward and well-structured

• Avoid irrelevant or alienating references and jargon

• A clear value proposition (not just price)

• Universal values (family, nostalgia)

• Information and facts, enabling an informed purchasing

decision

Marketing Communications

Better design

• Address physical ageing: especially sight and hearing

• Avoid stereotypes, caricatures and negative portrayals

• Visual clarity: fonts, colour contrast, images

• People: use older models, not ‘aspirational’ younger ones

• Seek realism and relevance

Digital

• High levels of usage amongst 45-64 year olds

• Rapid increase in usage by 65+

• However, digital exclusion is also social exclusion

Key issues

• Consumers need help moving ‘up the curve’ and overcoming

fears

• Multi-channel usage

People

• Shopping as a social activity

• Human interaction preferred

• Recruit and develop older people

- Greater empathy with customers

- Benefit local economy

• Staff Training

- Importance of older customers

- Needs and support

Product

• Formulation & nutrition

• Portion Size

• Convenience – ready meals

• Range offering e.g. Premium

& value

Packaging

• Ability to read labels / instructions /

information

• Intelligibility and relevance of

information provided

• Japan: magnifying glasses!

• Ability to hold pack

• Ability to open pack

Develop growth categories

Example – health

• High area of spend

• Links to pharmacy and

prescriptions

• Health and health-related

products

In-store environment

• Tailor to needs and wants, subtly

• Rest areas and seating

• Retail layout, including wide

aisles / wheelchair access

• Shelving height

• Toilet facilities

• Trolley depth

• Clear signage & lighting

Social

• More time for the social aspect of

shopping

• Cafes - meeting friends – and

resting

• Community events and activities

• Promotional events and activities

Additional services

• Positioning of home delivery to offer a

valuable service to older people

• Recognising needs, enabling

independence

Summary

1. What we know

• Demographics

• Economic

• Social

• Psychological

• Physical

2. Opportunities

• Additional services

• Digital

• Growth categories

• In-store environment

• Marketing communications

• Packaging

• People

• Products

• Social

Older consumers: the market opportunity

Mark Beasley

Chairman: The Mature Marketing Association www.the-mma.org

Managing consultant: rhc advantage www.rhcadvantage.co.uk

(e) [email protected]