Marketers need to reassess their strategies to account for the growth in the number of over 50 year olds, according to a new “Senior Consumers” report by market analyst Datamonitor.
Whilst the vogue for youth marketing has got everyone targeting young adults, teens, “tweens” and children, untapped potential remains amongst mature consumers, especially Well-Off Older Folks (WOOFs) who should be the main target for those looking at senior consumers. As the blinkers are taken off an industry that to date could arguably be called “obsessed with youth”, many of the commonly held beliefs about marketing to seniors will be challenged. The need to acquire new marketing skills is urgent – there will be an additional 7.7 million consumers over the age of 50 in Europe by 2005 compared to 2000.
Despite growth in the number of consumers aged over 50 marketers, especially those in consumer packaged goods (CPG) appear not to be as interested, preferring instead to focus time, effort and resource on younger age groups. But as the population ages and older consumers grow in their economic power, marketers will be forced to turn their attention towards this currently neglected segment.
As the table shows the growth in the over 50s in Europe is just too great for marketers to continue to ignore – however anyone who thinks solely in terms of just the “the over 50s market” is unlikely to effectively exploit the opportunity on offer. Everyone now accepts that there are many different consumer groups at younger ages – now there is the need to similarly segment senior consumers. The keys to effective understanding and segmentation of this segment are using “attitudinal” groups and “lifestages”.
Over 50s by country (millions), 2000-2025Being older…it’s an attitude…
Country 2000 2005 2010 2015 2020 2025
France 19.0 20.7 22.3 23.8 25.1 26.3
Germany 29.0 30.6 32.7 35.5 37.7 38.1
Italy 21.1 22.0 23.0 24.4 25.8 26.8
Netherlands 4.9 5.4 5.9 6.5 7.0 7.3
Spain 13.2 13.9 14.8 15.9 17.0 18.2
Sweden 3.2 3.4 3.5 3.7 3.9 4.0
UK 19.6 20.6 21.9 23.9 25.7 26.7
Other 22.0 23.3 24.8 26.7 28.4 29.5
Overall 132.2 139.9 149.0 160.4 170.6 176.8
Source: UN, Datamonitor Analysis
The differences in attitude between different consumers are crucial for marketers to understand. For example, a 65-year-old consumer may want to learn a new sport or could be highly introverted and have health problems. For marketers there are three major attitude groups to consider: WOOFs, the Youthfully Spirited and Self-Preservationists. WOOFs are those with a relatively high degree of financial security and high disposable incomes. This allows them to trade up to high quality goods and services and to be very experimental. The Youthfully Spirited group consists of those who are experimental (similar to the WOOFs) but who are less financially secure. The Self Preservationists are those who are more introverted, have more conservative purchasing patterns and are typically older than consumers in the other two groups.
WOOF-like behaviour will become increasingly common
“With more consumers becoming financially astute and affluent, future older generations will not only be more numerous but will also account for a greater share of consumer expenditure. Whilst there will continue to be older consumers who are financially constrained there will be greater numbers of WOOFS and Youthfully Spirited older consumers to target. Following a lifetime of work older consumers reach a stage in life where they want to relax and enjoy themselves, and their expectations are higher than those of previous generations. Changes such as increased foreign travel, increasingly liberal social attitudes and greater diversity in activities offered by the leisure industry mean there are more opportunities for older consumers to enjoy themselves,” comments Piers Berezai, Datamonitor consumer markets analyst and author of the report.
“This self-indulgence is also good news for the consumer goods industry, as better-off senior consumers tend to opt for high quality food and drinks. The same tendency is also strong amongst seniors who have less disposable income, as many of these will try to consume “less of the best” as far as their budgets will allow,”
It’s not how old you are, but where you are at…
Datamonitor’s research found that when targeting older consumers it is important that marketers look at the lifestage the consumer is at, as well as their attitudes. This is not the same as looking at age per se, but the four main lifestages associated with the over 50s can still be associated with age ranges – allowing meaningful age based segmentation. The “Pre-retirement” period occurs between 50 and 59 years old. At this stage consumers will often still be working, will have little free time and may still have major bills to pay. The next stage is “Retirement”, which occurs between 60 and 69 years old. Consumers at this stage often make budgetary cutbacks to adjust to fixed incomes and tend to be cautious with their money, unless they are very financially secure. “Long Retired” follows this stage – between 70 and 84 years old. This is where consumers have become more adept at living off their fixed incomes. Those that have successfully managed their finances up to this point now often relax and indulge themselves with little luxuries more. The final stage is “Advanced Ageing” – aged 85 and above. Consumers at this stage tend to become more introverted as they adjust to declining physical abilities and health.
“Consumer goods marketing is being left behind. The obsession with targeting younger consumers under the age of 30, especially teenagers and “tweenagers” means that mainstream advertising has the potential to totally ignore those over age of 50. Even worse, the portrayal of older consumers in many adverts could be considered patronizing or even offensive. With the growth in the over 50s segment marketers can no longer run the risk of alienating this audience,” comments Piers Berezai.
The over 50s: less brand loyal and more experimental than you would think
Marketers will increasingly focus on seniors as competition amongst manufacturers for the younger consumers is set to intensify. However, Datamonitor’s research among industry executives finds that marketers are being held back from effectively targeting the over 50s by a lack of know-how and the perpetuation of stereotypes and myths. The over 50s are
often less brand loyal and more experimental than commonly presumed. Marketers also fail to recognize when specific products might also be of relevance to older consumers. For example, despite the over 50s generally being the most concerned about their health, most health product innovation, such as sports drinks and low fat foods, have targeted younger consumers. Another example is that older consumers are often as busy as their younger
counterparts – older people are now often more active than previous senior generations due to better long-term health. Despite this, convenience products are rarely ever aimed at those over the age of 50.
Marketers need to reassess their view of the youth market…and upgrade seniors
Datamonitor interviewed retired marketing directors in order to ascertain their views as both senior consumers and experts on the industry. The interviews highlighted that the focus on youth and the misunderstanding of older consumers is perpetuated by the fact that marketing teams and creative agencies are typically very young. For example, according to the Institute of Practitioners in Advertising (IPA) in 2001, 81% of staff in advertising and communications agencies were under the age of 40, and 49% were under the age of 30. Overall marketers need to reassess their view of the seniors market, and divert more of their resources into developing greater understanding of these consumers. For example, many may have not considered the impact of more household purchasing decisions being made jointly as a result of both partners having greater leisure time following retirement.
Combining this type of insight with effective segmentation will allow stereotypical approaches to “seniors marketing” to be broken, and there is a receptive audience waiting to hear the message.
To view the full report in the just-food.com research store, click here.