The number of older people in the world is about to grow very quickly indeed.
While the impact of such figures on government budgets is being fiercely debated, too few retailers and manufacturers have focused on the revenue that could be derived from this demographic shift.
This generation of seniors is more active, health-conscious and affluent than ever. In the UK, for example, over-50s buy 80% of all high-end cars, while over-70s generated nearly a fifth of injury claims from extreme sports. Their spending power represents a huge opportunity. US census estimates for 2012 show households headed by 55- to 64-year-olds have a median income of US$55,748, compared to US$49,659 for those headed by 25- to 34-year-olds. The gap keeps widening. Americans aged 65 and above have seen their net worth increase by 42% from 1987 to 2012, while younger Americans (35 and below) are 68% worse off than 25 years ago. In the UK, 75% of the nation’s entire wealth, 60% of the savings and 40% of consumer demand belongs to the over-60s.
Seniors will always spend their money on food and drink. Mintel estimate that 50- to 64-year-olds in the UK spend 50% more on food and drink than the under-30s, so the manufacturers and retailers would be foolish to disregard this segment of the market. “Older shoppers’ share of grocery spend will increase as the population ages,” says Michael Freedman, a shopper insight manager at global food-industry analysts IGD.
“Food retailers and manufacturers who can tap into the needs of older shoppers stand to benefit in the long term.”
Seniors are significantly more likely to scrutinize the products they buy in detail.
A 2011 survey of more than 2,000 Americans by Harris Interactive found they were the most likely to focus on nutrition. Their awareness of health is much more likely to sway their purchases. Many chronic illnesses are largely preventable if people change their diets and more than 75% of the seniors in the study had some form of restricted diet, compared to 58% of those aged 47 to 65. “As shoppers get older, they change their approach to what they eat,” says Freedman. “They look for products to help them prolong an active lifestyle. Our research shows that over-65s are far more focused on buying healthier products than other age groups.”
In 2012, seniors purchased over 40% of consumer packaged goods in the UK. There is evidence that manufacturers and retailers are adjusting to the buying power of senior citizens. It may be a sign of the times that the most popular commercial at the 2013 Superbowl was Taco Bell’s Viva Young ad, in which senior citizens sung the Fun hit ‘We Are Young’.