David sinclair ilc

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  • 1. The Golden Economy: Older People and theConsumer Markets David Sinclair Head 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.
  • 2. Summary  About ILC-UK  The size of the market (and it’s growing)  What is an older consumer?  Is the consumer changing? Why does participation decline with age?  Given all this, are older consumers ignored?  The issues.The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  • 3. We influence Government policy and debateThe ILC-UK was established in 2000 to explore andaddress the new longevity revolution and its impact onthe life-course and society.  Think Tank  Global (12 ILCs)  Evidence Based  High visibility around Westminster (e.g. 17events/1000people in 2010)  Engage at highest levels of Government  Focussed 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.
  • 4. Some of our publications The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  • 5. 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 The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  • 6. An ageing society means more olderconsumers  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.
  • 7. Distribution of net household financial wealth1:by age of household head (2006/08) Mean Median 60,000 40,000 20,000 0 16-24 25-34 35-44 45-54 55-64 65-74 75-84 85+ The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  • 8. And we might buy different things   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.
  • 9. The beer industry is worried!“German beer consumptionfell 2.1% in 2009 based on anageing 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.
  • 10. But we know that ageing represents growthpotential (BIS) The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  • 11. What makes a consumer an older consumer?Impact of biological and social ageing onconsumption  Loss in physical strength may make opening jars/ bottles more difficult  Older people losing mental capacity/dementia may find difficulties with problem solving or processing information. They may also find it difficult to shop around or exercise choice  Those housebound can be excluded from the physical marketplace  Ageing can make it more difficult to carry heavy weights and can also result in reduced appetite (Twofers!) The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  • 12. Difficulty with shopping, communicating andhandling money The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  • 13. There are some very wealthy people notspending The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  • 14. 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.
  • 15. Are older consumers ignored?“Just because I’m over 60 nobody wants to sellme anything anymore”Germaine Greer“Advertisers and marketers are astonishinglyneglectful of older audiences even for productsprimarily sold to older people”Mike Waterson, Chair World AdvertisingResearch Centre The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  • 16. 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.
  • 17. But some companies are getting moreinterested“Coca Cola moved into the wine, coffee, tea andorange juice markets during the 1980s to captureolder consumer markets who were less interested intheir coke brands”Simcock and Sudbury 2006“Anheuser Busch, the largest US beermaker, attempted to reach the 50 plus age groupand wound up creating one of it’s top selling brands”Green 2004 The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  • 18. 6 Issues to considerOlder consumers as giver and recipientBetter representation of older people in advertisingOlder people as users of technology (the role ofInclusive design)Engaging the active consumer (Shopping around)A continuing need to tackle Age DiscriminationThe International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  • 19. The older consumer is a 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.
  • 20. Representation of older people in advertising   Older people, particularly women, are under-represented in advertising (NB Cognitive age effect) IPC/Simcock and Sudbury (2001)   Where older people are represented, evidence that it is for products such as “pain relievers, digestive aids, lacistives and denture forumlas” Freimuth and Jamison (1979)   There is limited evidence that older people are badly represented in advertising Simcock and Sudbury   We’ve started to see more examples of companies using older models (e.g. Dove)   Scant evidence and no consensus that using older models puts younger people off the product/service Simcock and Sudbury (2001) The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  • 21. Technology – an opportunity (and a challenge)Around 820,000 older consumers (65+) in the UK made an internetpurchase 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.
  • 22. Inclusive design The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  • 23. 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.
  • 24. Shopping AroundMixed evidence but in terms of insurance;utilities; communications technologies, thereis evidence that as we get older we are lesslikely to shop around. WHY?  Older people are happy with the product?  Difficult to calculate the benefit of switching (telecoms/utilities)  There are few alternatives (e.g. upper age limits)  Switching is a hassle  Reduced information processing abilities (but does experience compensate for age?)  But if marketers assume people don’t shop around they won’t target them. The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  • 25. Direct and indirect age discrimination “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.
  • 26. Are older consumers changing? “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.
  • 27. 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 Dodge, are more free than their predecessors in the past century.” 1962 The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  • 28. 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.
  • 29. The new image of the older consumer“ageless”. Let’s take age out of the equation? Age Neutral approach argues that:   An Age Neutral approach should be taken to marketing   Needs of older people are not that different from other adults   The principals of marketing to all ages are the same   Lifestyle or interest is going to be more important than age Dick Stroud The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.
  • 30. Summary  The older consumer has money  They value good service  Lots of companies get it wrong  Age not best predictor of behaviour  There is money to be made by those who get it right.  But. Is there such a thing as “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.
  • 31. Many thanksDavid Sinclair - Head of Policy & Research,International Longevity Centre (ILC-UK)davidsinclair@ilcuk.org.ukTwitter:@sinclairda@ILCUK The International Longevity Centre-UK is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change.