• Monday, May 20, 2024
businessday logo

BusinessDay

Needs of ageing population unmet by retailers, manufacturers – global study

businessday-icon

Retailers and manufacturers across the globe are failing to meet the specific needs of the massive, growing and global ageing population, according to new research.

This is one of the main findings from a new study. AT 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 $8tn in 2010 and will be spending $15tn annually by the end of this decade.

In 1998, the number of people over the age of 60 were more than 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.

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 centres, 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 specialised in the consumer & retail industry, “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.

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.

According to Martin Walker, senior director of AT Kearney’s Global Business Policy Council, “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.

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 obviously 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 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.”

Anne  Agbaje