In Figures: Time for business to mature

The world is ageing rapidly and in developed countries older consumers outspend the young in nearly every department, but business has been slow to adapt to this growing market.

by Steve Lodge
Last Updated: 23 Jul 2013

1. THE FUTURE IS GREY

A combination of increasing life expectancy, falling birth rates and the ageing of the post-war 'baby boom' generation (born in the 1950s and 1960s) means that the world is getting older. Currently, one in 10 of the world's population is aged 60 or over; it will be one in five by 2050 and for the first time in history the number of over-60s will match the number of children under 15.

By 2020, the forecast is 1.1 billion over-60s worldwide - a figure near the current population of China - with two-thirds of those older people in the developing world. In fact, China, with an estimated 240 million over-60s by 2020, is forecast to age to a greater degree than any other country over this period.

But it is the rich world where societies are already starting to look old - one in four Japanese and one in five Europeans is already aged over 60, and older people in these countries already outnumber the young. By 2030, more than half of western Europeans will be over 50, while much of Africa, the Middle East and south Asia will still have relatively young populations. The ageing of the Western world has put healthcare and pension issues on the agenda, but the problems faced by older people in developing countries are even more acute.

2. HAVE MONEY, WILL SPEND

In the developed world, older people are wealthier than ever. Over-50s have a standard of living 30% higher on average than younger people and in the US over-65s are the most affluent of any age group. With mortgages paid off, many older people can still look forward to 20 or more years of active life with greater spending power than younger people.

Older people are a major economic force in healthcare, with over-50s in the US responsible for 75% of all prescription and drug spending and 60% of all healthcare purchases. This age group has also increased its overall consumption three times as fast as any other age group over the past 20 years, according to Senioragency International, which markets to older consumers.

Mature consumers in Western countries spend significantly more than under-45s on personal care products, while figures for 2002 show American women aged 55-64 spent more per head on clothes than any other group. Across a range of categories, mature consumers have a 40%+ market share, while in the US over-50s account for nearly half of total consumer spending.

Across industrialised countries generally, half of all new cars are bought by over-50s, while the average age of Harley-Davidson motorcycle customers is also said to be over 50. Older consumers demand quality and value, which makes them loyal to trusted brands, but they are also marketing cynics.

3. OLDER AND WISER

Boardrooms may be full of grey hairs, but business has been slow to adapt to marketplaces with more older and richer consumers and fewer, often indebted, youngsters. It is estimated that companies still spend 95% of their marketing and advertising budgets on targeting the under-50s.

By aiming at the young, companies risk missing out on a significant market - and may even struggle to achieve growth. Even when older consumers are targeted, there is a risk of getting it wrong. Gerber, a US baby food firm, realised many older consumers with dental and digestion problems were buying its products, so a Senior Citizen brand was launched. It bombed, as older shoppers didn't want to be associated with it. Advertising to mature consumers is often most successful when it focuses on active, positive and healthy lifestyles, rather than portraying weaknesses.

Brands that are relatively 'age-neutral', such as Coca-Cola, also prosper. Some companies have adapted their product design to meet older people's needs, such as Japanese telecoms company NTT DoCoMo, which launched Raku-Raku ('easy-easy') - a phone with big buttons and easy-to-read figures.

Ford dressed its design engineers in a 'third age suit' to help them appreciate the mobility and vision limitations of older consumers, with the result that its cars are now easier to get in and out of and controls are more reachable.

Indeed, designing for the old can have a wider market appeal.

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