• by Jack Loechner , Staff Writer @mp_research, October 12, 2011

According to A.T. Kearney's Global Maturing Consumer study, falling birthrates and increasing longevity means that, for the rest of this century, the fastest-growing consumer group will be over the age of 60. Manufacturers and retailers will need to adapt their products and sales channels, because mature consumers will represent not only a significant part of their future clientele, but also of their human resources, as retirement ages worldwide start to creep up.
In 1950, some 200 million people were in the "over-60" group; by 2000 the number had risen to 600 million, last year to 800 million, and by 2050 the number will have reached 2 billion. Globally, this older population is increasing at a rate of 2.6% per year, considerably faster than the current 1.2% annual growth in the population as a whole. Further, the 80 years and older group is increasing at 4% per year.

In 1998, the number of people older than 60 overtook those younger than 15 in the G7 countries. Based on current worldwide demographic trajectories, by 2047 there will be more people older than 60 than younger than 15 worldwide.

The nature of age has changed. Once an adult has reached the age of 60, he or she can expect 13 more years of full health in India, 15 more years in China, 19 more years in the United States and 21 more years in Japan. And this healthy life expectancy at 60 is increasing rapidly, by approximately one year every five years, says the report. People are active and healthy well into their 70s and 80s.

In developed societies, mature citizens control much of the wealth, even though their nominal incomes may decline after retirement. In the United States, for example, the over-50s own 80% of U.S. financial assets and are responsible for 50% of discretionary income. Last year, they spent $87 billion on new cars, compared to $70 billion spent by those under the age of 50.

Worldwide, consumers aged 60 and older spent more than $8 trillion in 2010; by the end of this decade, they will spend $15 trillion. An analysis of the share of income for the over-60s in various economic regions shows that it will continue to rise through 2020.

The most important finding in the study, says the report, is that older shoppers do not think they are adequately served by marketers, retailers or manufacturers. Most comments focus on the difficulties they face, including the inability to navigate large stores, with too many hard-to-reach products on shelves that are either too low or too high.

Product packaging is often difficult to open, and labels, prices and directions in stores are hard to read. Of the study's participants, 52% in the 60-70 group, 58% in the 70-80 group, and 66% aged over 80 say they cannot read labels properly, even when wearing glasses or contact lenses.

Mature consumers also complain that most stores are not only understaffed but also that the staff on hand is not trained well enough to help them. Most respondents, 63% under 70, and 75% over 70, say they would like to be able to sit down in stores. On the whole, mature consumers want and expect a sympathetic understanding of the realities of age, but they do not want to be treated as old or elderly.

Older people enjoy shopping, not only as a necessity but also as a social and leisure experience. Two-thirds of those aged 70 to 80 say they shop twice a week or more. They shop at different times, preferring to go on weekdays, and relatively early in the mornings, when the stores are less busy. The older they are, the more they prefer smaller stores and shopping closer to home (68%), and the more likely they are to walk to the shops rather than drive or be driven. Proximity is almost always a main reason for choosing a specific store.

Mature consumers spend proportionally less of their income on clothing and transportation than people under age 60, and more on food, beverages and non-prescription health products. They buy fewer items but tend to spend more per item. Overwhelmingly, they seek quality products, are loyal to brands, and are not particularly price sensitive, even if their incomes are below average levels. This trend is even more pronounced with aging.

Older people in sub-tropical climates want cooling in summer and those in northern climates need extra heat in winter. Britain's Institute for Fiscal Studies calculates that all households spend 7% more on heating during cold spells, and that many of the poorest retirees will cut their spending on food to pay for heat.

The biggest differential for promotional purchases, says the study, seems to be income levels. However, 43% of study participants say they will buy promotional products only if they believe the quality is comparable to their usual purchase, 34% say they buy goods on promotion whenever they can, and 22% say promotions have no impact on them. One reason the study respondents hesitate to take advantage of promotions is that many are the "two-for-one" kind, with limited shelf life, which would mean buying much more than they actually need or can use in time.
Also, there seems to be a trading-up trend among wealthier mature consumers who need "less intake" for themselves and their families. They tend to favor quality over quantity, indulge in certain categories—primarily food, drink and clothing—and prefer higher-quality cars.

The use of technology is widespread, with 69% of respondents having both fixed-line and mobile phones. The percentage that uses only a mobile phone is 11%, while 22% have fixed-line phones only. Mobile phone usage declines sharply with age. However, as many as half of the respondents over 80 say they use one.

Mature consumers have time and want to be well informed, so they tend to be heavy Internet users and shoppers. Half of the survey respondents use the Internet, with 20% taking advantage of it for shopping, research and communication. The younger of the respondents, and the wealthier and older participants, say they tend to purchase more products online, and are also more likely to use home delivery services.

Surprising to some, says the report, a larger proportion of mature consumers do not seem to focus on a product's health benefits or environmental footprint. This phenomenon, which increases with age in the study, is a fruitful area for further research into the way mature consumers think about health, the environment and sustainability.

Many in the study express a negative view of advertising, finding it too loud, and too focused on young people and rock music. The findings are supported by a survey by Britain's Age Concern (now Age UK), in which two-thirds of mature consumers think advertising portrays them negatively, and three-quarters say they do not relate to it at all.

The report includes commercial and retail perspectives and suggestions on how to interpret and analyze the study, and concludes by noting that  “... we will all be mature consumers one day... within 25 years, individuals older than 85 will represent more than 8% of the population in Japan and between 3 and 5% of people in Europe and the United States... adapting to the radically different requirements of mature consumers can have extensive consequences for retailers and manufacturers... “

For more detail on this study, including charts and graphs, and access to the PDF file, please visit here.