New A.T. Kearney Global Study “What Do Mature Consumers Want?” identifies the huge potential of this consumer segment that will spend $15 trillion annually by the end of this decade.
Currently retailers and manufacturers across the globe are failing to meet the specific needs of the massive, growing and global aging population. This is one of the main findings of the new study released today. A.T. Kearney 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.
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 percent of Germans, 30 percent of the French, 22 percent of Americans and even 30 percent of Chinese will be older than 60.
“One intriguing tendency emerging from the Global Maturing Consumer study is that in a number of different ways, the views of respondents seem to intensify, or to shift, after the age of 80, comments Martin Walker, senior director of A.T. 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.”
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. The nature and the image of aging 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 recognize the realities of aging, they do not want to be treated as “elderly.”
A.T. Kearney’s report demonstrates that 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 central idea in modern trade has been to improve efficiency for shoppers. Larger stores outside city centers, lots of parking, and short queues are all designed for less frequent, big-basket shopping. However, mature consumers, who represent up to 30 percent of spending power, spend more time in stores.
“For retailers, adds Xavier Mesnard, Vice President specialized in the Consumer & Retail industry, aging 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, organized 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 aging phenomenon will require a far-reaching re-thinking of product design, particularly in labels and directions, legible prices, and easy-to-open packaging. 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 aging consumer market.
The full study report can be downloaded at www.atkearney.com/matureconsumer.