Retailers and manufacturers across the globe are failing to meet the specific needs of the massive, growing and global ageing population.
That’s one of the main findings of a new study released today by management consultancy, AT Kearney.
It interviewed 3,000 people in 23 countries to find out what mature consumers are looking for in retail stores and from consumer packaged goods manufacturers. Mature consumers form a worldwide market segment that spent $8 trillion in 2010 and will be spending $15 trillion annually by the end of this decade, AT Kearney reports.
In 1998, the number of people over age 60 overtook those under age 15 in the G7 (developed) countries. Based on current worldwide demographic trajectories, in five years there will be more people over the age of 60 than under five; in 30 years, there will be more people over 60 than under 16. When today’s newborn babies reach college age in 2030, 36% of Germans, 30% of the French, 22% of Americans and even 30% of Chinese will be older than 60.
“One intriguing tendency emerging from the Global Maturing Consumer study is in a number of different ways, the views of respondents seem to intensify, or to shift, after the age of 80,” said Martin Walker, senior director of AT Kearney’s Global Business Policy Council.
“The over-80s are globally much more loyal to established brands, and less willing to spend money on products that offer healthy benefits or are considered green.
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; if so, this represents a noticeable change from the traditional concept that old age begins at retirement,” said Walker.
According to researchers, these key cultural and demographical changes need to be addressed by retailers and manufacturers to meet the needs of this market segment.
For the past 60 years, marketing and advertising strategies and much of our popular culture have been driven by the cult of youth, said AT Kearney.
The nature and the image of ageing are changing. People are active and healthy well into their 70s and 80s. The longer we live, the longer we stretch the definition of old. Yet, while mature consumers want manufacturers and retailers to recognise the realities of ageing, they do not want to be treated as elderly, AT Kearney added.
The report demonstrates the mature consumer shops very differently from the younger generation. Although most retailers focus on speed and price competitiveness, mature consumers are more demanding on quality and services, and are less price sensitive, the study found. The central idea in modern trade has been to improve efficiency for shoppers. Larger stores outside city centres, lots of parking, and short queues are all designed for less frequent, big-basket shopping. However, mature consumers, who represent up to 30% of spending power, spend more time in stores, researchers found.
Emmanuel Hembert, principal at AT Kearney and a specialist in the Consumer & Retail industry, said: “For retailers, ageing may mean a paradigm shift in the design of stores and retail chains. They want personal attention from friendly, talkative cashiers, not speed. They want smaller stores closer to home. They want a clear, organised assortment with high-quality products at good prices, not unlimited choice of cheap, average -quality products or quantity-based promotions. And for the growing number of those who have an internet connection, they go online to get information and buy.”
For manufacturers, responding to the ageing phenomenon will require a far-reaching re-thinking of product design, particularly in labels and directions, legible prices, and easy-to-open packaging, said AT Kearney. Mature consumers will take their time to get informed about dietary information while at the store, so they need easy-to-read information in larger font sizes. Above all, manufacturers will need to work closely with retailers to coordinate an effective response to the ageing consumer market, it said.
The full study report can be downloaded at www.atkearney.com/matureconsumer