By Martin Walker and Xavier Mesnard, A.T. Kearney’s Global Business Policy Council
The fastest-growing age group worldwide in this century will be people over the age of 60. What must retailers and manufacturers know to adapt to this older consumer group? In the first-ever international survey of consumers over the age of 60, A.T. Kearney interviewed 3,000 people in 23 countries to find out what mature consumers want. The short answer: prices and labels they can read, packaging they can open, and more places to sit down in stores.
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 5; 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 percent of Chinese will be older than 60. Longevity is not just a rich-world phenomenon.
What do retailers and manufacturers need to know about their older customers?
Already, some manufacturers and retailers are adapting to these new dynamics. Automakers Mercedes, Ford and Volkswagen are mimicking the physical limitations of aging as they design certain vehicle models. Hospitals are using the Disney philosophy to train staff in customer-service techniques for mature patients. Retailers such as Wal-Mart are hiring older employees, and Carrefour offers electric shopping carts. This is not just good business — it is also self-interest.
For retailers, aging may mean a paradigm shift in the design of stores and retail chains. Today, the central idea in retail design is to improve efficiency for shoppers. It is generally thought that consumers are busy working and raising their families -- so they want to get in and out of stores as quickly as possible. Larger stores outside city centers, lots of parking spaces, and short queues with focused, efficient cashiers are all designed for less frequent, big-basket shopping.
However, mature consumers, who represent up to 30% of spending power, have an entirely different outlook on shopping. A trip to the store is often a source of physical activity and social interaction, an opportunity to investigate nutritional guidelines, and, in general, a place for enjoyment. Shopping trips are planned during weekdays, take place several times a week (or even daily), and with increasing age, are accessed less by car and more by foot.
Mature consumers spend more time in stores. As such, they want personal attention from friendly, talkative cashiers -- not speed. They want to sit down and have a cup of coffee -- not being brushed through by checkout personnel with laser scanners. They want smaller stores closer to home, not large and faraway ones. They want a clear, organized assortment of goods, with high-quality products at good prices, not unlimited choice or cheap, low-quality products.
For branded marketers, responding to the aging phenomenon will require a far-reaching rethinking of product design, particularly in labels and directions, legible prices, and easy-to-open packaging. Mature consumers want nutritious food and 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, branded marketers will need to work closely with their customers in the retail sector to coordinate an effective response to the changing consumer market.
We will all be mature consumers one day, and some of us will be very mature indeed. Within 25 years, individuals older than 85 will represent more than 8 percent of the population in Japan and between 3% and 5% in Europe and the United States. Adapting to the radically different requirements of mature consumers can have extensive consequences for retailers and branded marketers. As this customer group grows and gains purchasing power, smart companies will adjust their strategies accordingly to gain a competitive advantage.
Martin Walker is senior director of A.T. Kearney’s Global Business Policy Council, based in Washington, D.C. (email@example.com). Martin Walker is a partner in the consumer products and retail practice, in the Paris office (firstname.lastname@example.org).