The global population is aging rapidly and, according to a study by A.T. Kearney, marketers around the world risk being left behind in the “agequake” if they don’t rapidly adjust to the needs of more mature consumers.
Summarizing the findings of Kearney’s Global Maturing Consumer study, James Morehouse, vice president and partner, said mature customers “want personal attention from friendly, talkative cashiers, not speed. They want smaller stores closer to home. They want a clear, organized assortment with high-quality products at good prices, not unlimited choice of cheap, average-quality products or quantity-based promotions.”
They’re also seeking packaging that’s easier to read and open. They tend to be more brand loyal than their younger counterparts.
Michael Moriarty, partner at Kearney, told WWD, “Nobody’s ready for the agequake. In the next five years, everything is going to change, but right now you have organizations with marketing people who are 25 years old, brand managers who are 30. We’ll need to change our thinking quickly if we’re going to be ready for the 2 billion people who’ll be 60 and older by midcentury.”
The study found that older consumers spend proportionately less of their incomes on apparel and transportation than those under 60 and more on food, beverages and nonprescription health products.
“In apparel, the life cycle lengthens as people get older,” Moriarty said. “And Chinese consumers are just the same as American consumers in this regard. We have to figure out how to make and market high-quality, long-lasting, nicely styled and fashionable apparel with the same kind of zip that appeals to young people, even as people in their 50s are shopping at Zara and want to see something new every few weeks.”
The over-60 group spent more than $8 trillion worldwide last year and is expected to spend nearly twice as much annually by the end of the decade, as their numbers mushroom and their purchasing power increases. There were 800 million consumers in this age group last year and that number is expected to hit 2 billion by the middle of the century as people live, work and stay healthy longer and wealth becomes more concentrated among the aging and elderly.
With birthrates declining and life expectancy creeping up, by 2047 there will be more people over 60 than under 15 worldwide. While the general population is currently growing at 1.2 percent a year, the over-60 group is expanding at 2.6 percent and those 80 and older are adding 4 percent a year.
The study projects that, while the over-60s were responsible for 15.7 percent of U.S. income generation in 2005, they will move that mark to 23.6 percent in 2020. Similar estimated increases were registered in the majority of the 23 countries studied, with no countries projected to register a decline and only four — Germany, India, Italy and Spain — expected to see an increase of less than 3 percentage points.
Kearney’s analysis of the U.S. Bureau of Labor Statistics suggests that, along with the general population, the American workforce will be aging significantly too. In the 10 years leading up to 2016, an 84 percent increase is expected in the number of workers over 75 and an 83 percent increase in those 65 to 74. The 16-to-24 group is projected to drop 7 percent, those 25 to 54 to rise 2 percent and 55 to 64 to move up 37 percent.
The study, released by the global consulting firm Monday, points out both opportunities and risks confronting marketers eager to capture mature consumers. In addition to their greater brand loyalty, they are enthusiastic shoppers, with two-thirds of those between 70 and 80 hitting stores or malls twice a week or more. They are more inclined to shop on weekdays and at times of lower traffic, such as mornings.
However, they are clearly dissatisfied with the products they are offered, the stores in which they’re sold and even the advertising created to lure them into purchasing. The displeasure grows with age. Of the study’s participants, 52 percent in the 60-to-70 age group said they cannot read labels, even when wearing glasses or contact lenses. That figure rose to 58 percent for those aged 70 to 80 and 66 percent for those over 80.
Brand loyalty is particularly pronounced among those aged 80 and up, who are also “less willing to spend money on products that offer health benefits or are considered ‘green,’” noted Martin Walker, senior director of Kearney’s global business policy council. “After the age of 80, respondents are markedly more eager to have age-specific products and shopping environments tailored for them.
“It is almost as if 80 is the new point of self-definition for becoming old,” he added. “If so, this represents a noticeable change from the traditional concept that old age begins at retirement.”