Due to dramatic demographic changes around the globe and the aging of the baby boomer market, by 2008, companies in a range of sectors – including the consumer packaged goods, retail, financial service, healthcare, automotive, real estate and hotel and lodging business – will have to focus with ever greater savvy on serving the needs of a very different type of consumer: one that is age 50+ or older with shifting biological, psychological, social and economic characteristics, needs, and expectations.
Those that ignore this massive demographic shift and its global impact are likely to miss a significant opportunity.
Today the global population is aging and living longer due to improvements in health care and nutrition. Age 50+ consumers are a growing economic force that will transform multiple industries unlike any prior demographic shift in recent history. From healthcare to retail, from travel to financial services, and from entertainment to electronics, aging consumers are beginning to demand products and services tailored to their specific needs.
Age 65+ consumers are the most affluent of any age segment with many having multiple income sources. Furthermore, many have accumulated assets such as homes during their lifetimes. In addition, the economic power of the age 50+ population is already driving major shifts in product and services consumption across industries: Consumers over 50 account for almost half the total consumer spending. Consumers aged 50+ also account for nearly half of the market share in (a) personal insurance and pensions; (b) transportation; (c) health; (d) housing; and (e) food. The changing needs and priorities for these aging consumers are already driving major shifts in product and service consumption across industries.
Currently one in ten people are age 60+ years, and by 2050 one in five will be over the age of 60.
Age 50+ consumers confront numerous biological changes as they age. These changes in mobility, flexibility, elasticity, strength, vision, and hearing can have a major impact on how seniors interact with businesses and their products and services. For example: the elasticity and external appearance of the skin of age 50+ individuals can change with time, resulting in the appearance of lines, wrinkles and spots that connote age and a less than youthful appearance. While hundreds if not thousands of products already exist to address this consumer concern, the market for such product and related services is expected to continue to grow in the years ahead.
Some savvy makers of household appliances and tools are carefully adjusting the design of their products to better suit aging consumers. In some instances, they are finding that redesigned products for this demographic can actually attract a transgenerational following that greatly appreciates the more thoughtful design.
Older consumers’ growing enthusiasm for products that can help reduce the signs of age has been a boon to innovative cosmetic companies such as Avon. Over the last few years, the global cosmetics firm has introduced several skin care products to address aging concerns including ANew line and Wrinkle Corrector. Similarly, Avon has also introduced Cellu-Sculpt Body Treatment, a skin care product designed to help maintain slimmer, smoother and firmer body skin. As the percentage of aging consumers continues to grow on a global basis, the market for cosmeceuticals is also expected to see healthy growth.
Consumers age 50+ have accumulated more wealth and have more spending power than any other age group in history. They control 50% of all discretionary income; are responsible for 75% of all prescription drug spending; and are responsible for 60% of all health care spending. Analysts say that the numbers for this particular consumer category will only grow exponentially in the years ahead.
In a recent New York Times article, one age 74+ traveler admitted that her experiences over the past several years have entailed climbing the 19,300 foot Uhuru Peak on Mount Kilimanjaro and pitching a tent in a sandstorm in the Gobi Desert. She has also traveled to Mongolia, Madagascar and Peru in recent years and is planning trips to the Andes and Ethiopia.
Apparently, this age 74+ adventure enthusiast is not alone. Travel industry experts note that a growing number of older travelers are seeking out more active and adventurous travel and that unlike previous generations of the elderly, tend to be more fitness oriented, active oriented and far more receptive to adventure travel.
A number of companies are already beginning to align their products and offerings to changing characteristics of the age 50+ markets. Consider the examples below:
When Ford Motor Company discovered driver fatality rates were higher for drivers past the age of 50, it decided to research and develop ways to increase occupant safety for these drivers, including crash avoidance, crashworthiness, and post-crash assistance.
Boston-based, Fidelity Investments is one of the world’s largest mutual fund and investment companies. A key way in which the company interacts with its customers is through its website. To improve the interaction, Fidelity Investments’ usability lab has been researching how older users navigate its websites.
The Home Depot, the home improvement retail chain with upwards of 1,880 stores in North America is one company that has taken careful note of the changing preferences of aging baby boomers. The firm has observed that many boomers are extremely pressed for time and at this stage of life, are willing to pay someone else to do home improvement work for them. Similarly, affluent age 65+ consumers as a demographic group tend to spend a fair amount on their homes and are willing to outsource home improvement work to others as well. As a result, the company that for years heartily endorsed the “do-it-yourself” approach to sprucing up the home has not diversified to embrace the “do-it-for-you” service mode as well.
In 2003, the Walt Disney Company rolled out “Magical Gatherings,” an offering largely aimed at people over the age of 50 who are organizing outings with friends, grandchildren and former schoolmates. The magic of this offering is that it cleverly taps into the social and kinship networks of aging consumers.
Another company trapping into age 50+ markets is The Saga Group based in the United Kingdom. Saga is dedicated to serving customers age 50+. Evolving from a direct market of vacations to senior consumers, Saga now offers a set of services ranging from a lifestyle magazine to financial services (investments and insurance), vacation travel, health products and advice, and radio channels targeted to the tastes of those of age 50+.
Like the companies discussed above, many companies are beginning to tap into the opportunities and changes that drive consumer choices in the age 50+ markets. There are tremendous opportunities and economic imperatives to better serve this market.
The major demographic trend toward increased longevity and larger age 50+ populations creates new opportunities across multiple industries.
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