Older Consumers - The Golden Economy

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As presented at the Business of Ageing Conference on 8th March

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  • People in their 60s holiday more widely than adults aged 18-59, and 29 per cent of those aged 80+ have been on holiday in the last year. People aged 65-74 were holidaying at least as often as those aged 30-49. However, 28 per cent of over 75s had holidayed at least three times in the last year (compared with 18 per cent of those aged 30-49).
  • Older Consumers - The Golden Economy

    1. 1. The Golden Economy: the consumer marketplace in an ageing society David Sinclair Head of Policy and Research – ILC-UK
    2. 2. Summary <ul><li>About ILC-UK/Golden Economy </li></ul><ul><li>The context. </li></ul><ul><ul><li>Size of the market </li></ul></ul><ul><ul><li>What makes a consumer an older consumer </li></ul></ul><ul><li>10 Do’s and Don’ts </li></ul><ul><li>Other recommendations from “the Golden Economy” </li></ul>
    3. 3. We influence Government policy and debate <ul><li>The ILC-UK was established in 2000 to explore and address the new longevity revolution and its impact on the life-course and society. </li></ul><ul><li>Think Tank </li></ul><ul><li>Global (12 ILCs) </li></ul><ul><li>Evidence Based </li></ul><ul><li>High visibility around Westminster (e.g. 17 events/1000 people in 2010) Engage at highest levels of Government </li></ul><ul><li>Focussed on life-course </li></ul>
    4. 4. It’s a big market <ul><li>Older people’s spending reached an estimated £97bn in 2008 (over 65) </li></ul><ul><li>The over 50s spent £276bn in 2008 . This represents 44% of the total family spending in the UK </li></ul><ul><li>ONS Family Spending 2010 </li></ul>
    5. 5. An ageing society means more older consumers <ul><li>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 </li></ul><ul><li>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 </li></ul><ul><li>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) </li></ul>
    6. 6. Yet as we age the consumer market becomes more difficult
    7. 7. 5 Don’ts <ul><li>Don’t assume older people are all the same </li></ul><ul><li>Don’t assume money is the biggest barrier to consumption </li></ul><ul><li>Don’t ignore new technology </li></ul><ul><li>Don’t discriminate </li></ul><ul><li>Don’t ignore the older consumer </li></ul>
    8. 8. 5 Do’s <ul><li>Be wary of “the changing consumer” mantra </li></ul><ul><li>Do think about how an ageing society might change demand for products and services </li></ul><ul><li>Think about the older consumer as a giver and receiver </li></ul><ul><li>Ensure your products and services are accessible (inclusive design) </li></ul><ul><li>Deliver good customer service and help the older consumer get what they want (be more demanding) </li></ul>
    9. 9. Don’t 1: Let’s not assume older people are all the same.
    10. 10. Many like to travel
    11. 11. Don’t 2: Don’t Assume Money is the Biggest Barrier: Social Participation and Age
    12. 12. Yet people would like to participate more
    13. 13. There are some very wealthy people not spending
    14. 14. It’s not just about money.
    15. 15. Distribution of net household financial wealth 1 : by age of household head (2006/08)
    16. 16. Don’t 3: ignore new Technology – an opportunity (and a challenge) <ul><li>Around 820,000 older consumers (65+) in the UK made an internet purchase PRFC Analysis for ILC-UK (EFS 2007) </li></ul>
    17. 17. Don’t 4: Don’t discriminate <ul><li>“ 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” </li></ul><ul><li>Telegraph, September 2010 </li></ul>
    18. 18. Don’t 5: Don’t ignore the older consumer <ul><li>“ Just because I’m over 60 nobody wants to sell me anything anymore” Germaine Greer </li></ul><ul><li>“ Advertisers and marketers are astonishingly neglectful of older audiences even for products primarily sold to older people” Mike Waterson, Chair World Advertising Research Centre </li></ul><ul><li>Advertising/marketing agencies rarely asked to pitch for the older consumer </li></ul>
    19. 19. Why don’t companies target older people? <ul><li>Perception of a lack of buying power </li></ul><ul><li>Stereotyping of older people as “powerless, ugly, dowdy or uninspiring” (alongside an obsession with youth) </li></ul><ul><li>Lack of information about older people’s sensitivity to marketing Tynan and Drayton (2008) </li></ul>
    20. 20. Do 1: Be wary of the changing consumer mantra <ul><li>“ It is blindingly obvious that there is enormous difference between the seniors of yesteryear and people of the same age today .” Saga 2008 </li></ul><ul><li>We have a wealthy cohort (on average) (and there are more of them) </li></ul><ul><li>Recent retirees “are more strongly defined by the impact of consumer society on their lives and expectations of post work life than previous generations” </li></ul>
    21. 21. But is this a new phenomenon? <ul><li>“ 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.” </li></ul>
    22. 22. But is this a new phenomenon? <ul><li>“ 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.” </li></ul>Dodge, 1962
    23. 23. Do 2: Think about how might an ageing society change the consumer marketplace? <ul><li>Older people currently spend more than other ages on: drugs and healthcare; personal care; and coffee </li></ul><ul><li>They represent a significant market for new cars and travel. </li></ul><ul><li>Clothing spend declines with age </li></ul><ul><li>But less on eating out, movies, theatres, petrol and champagne </li></ul><ul><li>Certain industries will need to adapt to an ageing society </li></ul>
    24. 24. Even beer … <ul><li>“ German beer consumption fell 2.1% in 2009 based on an ageing population” Bloomberg.com </li></ul>
    25. 25. Categories of household expenditure by age of household reference person (2007)
    26. 26. Growth in expenditure (BIS)
    27. 27. Do 3: Think about the older consumer as giver and recipient <ul><li>Marketers note that older consumers buy a relatively high proportion of toys (25%?) and confectionary </li></ul><ul><li>Grandparents spend £50,000 on their first grandchild (Oct 2010) </li></ul><ul><li>Younger children/grandchildren often buy for the older person </li></ul><ul><li>In other words, people aren’t always buying for themselves. </li></ul>
    28. 28. Do 4: Well design your services
    29. 29. Can you read the menu? <ul><li>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) </li></ul>
    30. 30. Do 5: Deliver good customer service <ul><li>Investigate! volunteers also highlighted access to information and advice about what was available in the consumer market </li></ul><ul><li>Examples of good customer service – but it is often poorly promoted. </li></ul>
    31. 31. Other findings <ul><li>Mixed evidence about shopping around </li></ul><ul><li>Limited evidence about older people and ethical consumption </li></ul><ul><li>Mixed views on brand loyalty </li></ul><ul><li>Mixed evidence on the best way to reach the older consumer </li></ul><ul><li>Incomprehensible jargon and modern phraseology a barrier to the market (esp. financial services) </li></ul><ul><li>Some Investigate! participants argued that they had less choice than when younger </li></ul>
    32. 32. Other findings <ul><li>The end of the cheque could have a negative impact on the older consumer </li></ul><ul><li>Older consumers are often the main target for fraud, scams and mis-selling </li></ul><ul><li>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 </li></ul><ul><li>Good built environment (toilets/mobility scooters/parking/transport) makes the consumer marketplace work better. </li></ul>
    33. 33. Summary <ul><li>The older consumer has money </li></ul><ul><li>They value good service </li></ul><ul><li>Lot’s of companies get it wrong </li></ul><ul><li>There is money to be made by those who get it right. </li></ul>
    34. 34. Many thanks <ul><li>David Sinclair - Head of Policy & Research, International Longevity Centre (ILC-UK) </li></ul><ul><li>[email_address] </li></ul><ul><li>Twitter: </li></ul><ul><li>@sinclairda </li></ul><ul><li>@ILCUK </li></ul>

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