The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
The Golden Economy: the consumer marketplace
in an ageing society
David SinclairHead of Policy and Research – ILC-UK
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Summary
About ILC-UK/Golden Economy
The context.
– Size of the market
– What makes a consumer an older consumer
10 Do’s and Don’ts
Other recommendations from “the Golden
Economy”
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
We influence Government policy and debate
The ILC-UK was established in 2000 to explore and address the new longevity revolution and its impact on the life-course and society.
Think TankGlobal (12 ILCs)Evidence BasedHigh visibility around Westminster (e.g. 17 events/1000 people in 2010) Engage at highest levels of GovernmentFocussed on life-course
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
It’s a big market
Older people’s spending
reached an estimated
£97bn in 2008 (over 65)
The over 50s spent £276bn
in 2008. This represents
44% of the total family
spending in the UK
ONS Family Spending 2010
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
An ageing society means more older consumers
The 65+ age group now accounts for 20% of the UK consumer population (16+), and is expected to rise so that in 2030 over 65s account for 25% of the consumer market. PRFC for ILC-UK
The older market will grow by 81% from 2005 to 2030 while the 18-59 year old market will only increase by 7%. EU figures quoted by Stewart
In the UK, the number of consumers over 60 years old could increase by 40% over the next 30 years. Meneely, Burns and Strugnell (2008)
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Yet as we age the consumer market becomes more difficult
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
5 Don’ts
Don’t assume older people are all the same
Don’t assume money is the biggest barrier to
consumption
Don’t ignore new technology
Don’t discriminate
Don’t ignore the older consumer
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
5 Do’s
Be wary of “the changing consumer” mantra Do think about how an ageing society might change
demand for products and services Think about the older consumer as a giver and
receiver Ensure your products and services are accessible
(inclusive design) Deliver good customer service and help the older
consumer get what they want (be more demanding)
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Don’t 1: Let’s not assume older people are all the same.
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Many like to travel
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Don’t 2: Don’t Assume Money is the Biggest Barrier: Social Participation and Age
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Yet people would like to participate more
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
There are some very wealthy people not spending
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
It’s not just about money.
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Distribution of net household financial wealth1: by age of household head (2006/08)
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Don’t 3: ignore new Technology – an opportunity (and a challenge)
Around 820,000 older consumers (65+) in the UK made an internet
purchase PRFC Analysis for ILC-UK (EFS 2007)
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Don’t 4: Don’t discriminate
“Interflora, Britain’s biggest flower
delivery business, has been
accused of ageism as their new
‘happy birthday’ balloon range only
goes up to 60 years old”
Telegraph, September 2010
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Don’t 5: Don’t ignore the older consumer
“Just because I’m over 60 nobody wants to sell me anything anymore” Germaine Greer
“Advertisers and marketers are astonishingly neglectful of older audiences even for products primarily sold to older people” Mike Waterson, Chair World Advertising Research Centre
Advertising/marketing agencies rarely asked to pitch for the older consumer
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Why don’t companies target older people?
Perception of a lack of buying power
Stereotyping of older people as “powerless, ugly, dowdy or uninspiring” (alongside an obsession with youth)
Lack of information about older people’s sensitivity to marketing Tynan and Drayton (2008)
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Do 1: Be wary of the changing consumer mantra
“It is blindingly obvious that there is enormous difference between the seniors of yesteryear and people of the same age today.” Saga 2008
We have a wealthy cohort (on average) (and there are more of them)
Recent retirees “are more strongly defined by the impact of consumer society on their lives and expectations of post work life than previous generations”
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
But is this a new phenomenon?
“They have fewer ties to family responsibilities... With their homes paid for their major housing concern is for property taxes and repairs... Being essentially free from obligation, they may spend their income and assets as they wish. Here is a potential market, therefore for those marketers who wish to appeal to it. It is a new market, almost unrecognised which must be developed with care as it depends upon the changing role of older persons in our society and the realisation that they are more free than their predecessors in the past century.”
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
But is this a new phenomenon?
“They have fewer ties to family responsibilities... With their homes paid for their major housing concern is for property taxes and repairs... Being essentially free from obligation, they may spend their income and assets as they wish. Here is a potential market, therefore for those marketers who wish to appeal to it. It is a new market, almost unrecognised which must be developed with care as it depends upon the changing role of older persons in our society and the realisation that they are more free than their predecessors in the past century.”
Dodge, 1962
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Do 2: Think about how might an ageing society change the consumer marketplace?
Older people currently spend more than other ages on: drugs and healthcare; personal care; and coffee
They represent a significant market for new cars and travel.
Clothing spend declines with age
But less on eating out, movies, theatres, petrol and champagne
Certain industries will need to adapt to an ageing society
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Even beer …
“German beer consumption
fell 2.1% in 2009 based on
an ageing population”
Bloomberg.com
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Categories of household expenditure by age of household reference person (2007)
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Growth in expenditure (BIS)
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Do 3: Think about the older consumer as giver and recipient
Marketers note that older consumers buy a relatively high proportion of toys (25%?) and confectionary
Grandparents spend £50,000 on their first grandchild (Oct 2010)
Younger children/grandchildren often buy for the older person
In other words, people aren’t always buying for themselves.
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Do 4: Well design your services
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Can you read the menu?
In many European cities one of the main groups eating in restaurants are those over 50, yet very few 50 year olds are able to read a menu by candlelight with out their reading glasses. That is because the menus are usually designed by younger people in print shops, not for senior citizens. What a crazy situation: the people who the restaurants want to market to cannot read any of their sales literature. Patrick Dixon (2008)
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Do 5: Deliver good customer service
Investigate! volunteers also highlighted access to information and advice about what was available in the consumer market
Examples of good customer service – but it is often poorly promoted.
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Other findings
Mixed evidence about shopping around
Limited evidence about older people and ethical
consumption
Mixed views on brand loyalty
Mixed evidence on the best way to reach the older consumer
Incomprehensible jargon and modern phraseology a
barrier to the market (esp. financial services)
Some Investigate! participants argued that they had less
choice than when younger
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Other findings
The end of the cheque could have a negative impact on the older consumer
Older consumers are often the main target for fraud, scams and mis-selling
Need for an age friendly retail environment: In 2009 Tesco announced it was building an older person friendly retail environment complete with wider shopping aisles and brighter lights
Good built environment (toilets/mobility scooters/parking/transport) makes the consumer marketplace work better.
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Summary
The older consumer has money
They value good service
Lot’s of companies get it wrong
There is money to be made by those who get it
right.
The International Longevity Centre-UK is an independent, non-partisan think-tank
dedicated to addressing issues of longevity, ageing and population change.
Many thanks
David Sinclair - Head of Policy & Research,
International Longevity Centre (ILC-UK)
Twitter: @sinclairda@ILCUK