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Changing your mind about the

ageing consumer

Marketing to and understanding the consumer decisions of this burgeoning and increasingly important group

Mark Beasley mbeasley@the-mma.org

Marketing & the UK’s ageing population

Mark Beasley

rhc advantage Marketing consultancy specialising in the mature (50+) market www.rhcadvantage.co.uk

ageing consumer

The Mature Marketing Association is on a mission to challenge age myopia in business and marketing. Interested? Please join us

Mark Beasley Chairman The Mature Marketing Association www.the-mma.org

(c) www.rhcadvantage.co.uk

The Mature Market Report definition of ‘Mature Marketing’

Two Professors, 60,000 words, 210 pages 300+ UK and European data, literature & research sources A definitive and comprehensive introduction to this important subject Scope:

- Macro-environment - Consumer environment - Marketing environment - Marketing communications

Further information and executive summary: mark@rhcadvantage.co.uk

When do you stop being young?

15-24 you stop being young at 28 80+ you stop being young at 42 Average 35

When do you start getting old?

Aged 15-24 you start getting old at 54 Aged 80+ you start getting old at 67 Average 58

Why does this matter?

Perceptions of ‘old age’ are subjective & relative. Plus... Negative attributes, cultural stereotypes & value judgements Age prejudice

-64% think that age prejudice is a serious issue

Predictors of attitudes to age across Europe Dominic Abrams, Christin-Melanie Vauclair and Hannah Swift

In three years' time: Over 55s Growth The over 55s will have become the mainstream market in the UK Growth will outstrip the rest of the market 50% (£53 billion) of expenditure on food, drink & household products New market and brand thinking The ‘mainstream market’ will be re-defined, as the population ages Age no longer a ‘shortcut’ to explain consumer behaviour Brands will be in transition, moving away from youth & family values But

Most marketers are failing to reach older consumers effectively

This report was published in October 28th 2003 !! Has your business acted yet??

‘The Older Consumer’ - a report from Reuters Business Insight and TNS

The Business Case Ageing population Economically active Market Failure: increasing perception gap Mutual benefit in closing the gap

Long-term structural change A mega-trend

Demographics

Source: UK Office for National Statistics (ONS)

There are now more adults aged over 45 than there are aged under 45

Source: UK Office for National Statistics (ONS)

There are now more people aged over 65 than there are aged under 16

152.6m

30% 30%

2010 2020 2030 2040 2050 2060

Source: EU Population Projections - Eurostat

Total population growth 2010 - 2060 +3.2%

From 17% to 30% of population +50% in next 20 years

Population growth is driven by over 65s The ageing population is itself ageing

• The number of people aged over 65 in Europe will almost double between 2010 and 2060.

• The total population will increase by just 3%.

• Source: Eurostat

Cognitive Response, processing & retention of information

Sensory Sight, hearing, touch,

smell, taste, oral Physical Mobility, Dexterity,

flexibility, weight & body size, digestion, muscle strength, hair, skin, menopause, (in)continence, nutrition

Physical ageing

• 50% of registered disabled people are over 65

• Increased longevity

means: A. More physically

active ‘older’ people

B. Longer – but not necessarily healthier – lives

Disability

Economic Economic

‘Most advanced economies.... technically insolvent’ - WEF

Macro economy Macro-economy - pressures

‘Most advanced economies.... technically insolvent’ - WEF

Reduced output growth & productivity

Increased pressure on the state - care, health, housing, pensions

Smaller workforce paying higher taxes

Expenditure peaks

Savings & investment decline

‘Most advanced economies are technically insolvent’ - WEF

Individuals - economic uncertainty and diversity

Pensions – private and state Diversity – wealthy segments / inadequate financial provision Social and healthcare provision Lower return on investments & savings Longer working life / later retirement / high unemployment Increased entrepreneurship Inter-generational pressures

35% of the population

Income peaks at age 50

80% of the wealth

47% of expenditure

Economic behaviour of people over 50 Economic behaviour of people over 50

Expenditure: 50-64 highest-spending age group 50+ are 35% of the population and account for47% of expenditure (£300 bn pa)

Household & Per Capita Expenditure

0 460 185 562 191 497 225 321 185 218 151

Household Per Capita Household Per Capita Household Per Capita Household Per Capita Household Per Capita

Average weekly expenditure. Based upon weighted data and including children's expenditure.

Source: 'Family Spending 2008' Office for National Statistics, based upon Expenditure and Food Survey 2007.

65-74 75-plusUnder 30 30-49 50-64

Household expenditure on food & non-alcoholic drinks: 1. 30-49 2. 50-64 3. 65-74 Expenditure on health increases with age

Age UK estimates pensioner poverty in the UK affects 1.6m people living on or below the poverty line and 900,000 people living in severe poverty

The next cohort of 50-64 year olds will not be as well-off as the current cohort

Economic diversity and change

Socio-cultural aspects of ageing

New ideas of age and ageing Blurring age demarcation

Active consumers longer

Longer, healthier life

Denial of actual age

Cognitive vs. physiological age

Inter-generational complexities

‘Sandwich generation’

Caring for elderly parents

Funding grown-up children

‘Boomerang generation’

Important role of Grandparents

‘Club sandwich’ (4 generations)

Family disruption

50% of children born out of wedlock

25% of people never have children

25% of children live with one parent

Parents have children later in life

‘Silver Splitters’ / divorce / re-marriage

Complex extended families

25% live in single-person households

Economic disruption

Economic uncertainty & pensions

Unemployment 50-65

Retirement (later, or not at all)

Diversity: 2 million in poverty

Woman main earner in 40% of h/h

Age & Social Disruption

Old people seen as: a burden, dependent, feeble, frail, inadequate, lacking in creativity & dynamism... “Ageism is now the most widely experienced form of discrimination in Europe. “ (Age UK report 2013)

Socio-cultural aspects of ageing Old age is culturally unattractive

Want to be defined by activities, attitudes, desires, interests, lifestyle and needs– not age

DENIAL

Refuse to look, think, feel, behave or accept

chronological age

Dislike of being defined, portrayed or targeted by age

Refuse to accept social stereotypes, assumptions and prejudice

DENIAL

‘The Happiness Curve’. Increased confidence, cheerfulness and optimism with age

Psychological ageing

Increased diversity with age – attitudes shaped by environmental factors

Julie Clark Shubert

Rockers in their seventies...

New perceptions of age and ageing

IMAGES REMOVED FOR COPYRIGHT REASONS. SORRY!

Glamorous celebrities in their late sixties

Models in their eighties

Julie Clark Shubert

Julie Clark Shubert. ‘The Change’ – YouTube. www.allthingsjulie.com

Real people are role models as well!

“I am still an active and discerning consumer.”

Attitudes to marketing

Sceptical Experienced Require evidence

“I feel ignored, excluded, mis-understood, patronised and stereotyped.”

Attitudes to marketing communications

I am still active I will make my own decisions I want facts and information, not emotion and irrelevant ‘creativity’ I do not aspire to be young

• Lack of focus on older consumers -‘Despite all the evidence, advertisers continue to pursue youth. Age is just not a sexy word in marketing terms.’ -– Szmigin & Carrigan, 2006 - “95% of marketing budgets are aimed at consumers aged under 50” – Datamonitor

• ‘An environment which lacks empathy with older people’ (Director-General IPA)

• Marketing theory and practice are rooted in the past. Targeting youth and younger

adults is a habit many businesses have yet to break.

Marketing planning (c) www.rhcadvantage.co.uk

Age has serious limitations as a primary targeting factor

Age disruption

Diversity and complexity within older age group

Blurring of boundaries across age groups

Important role of other segmentation variables

Particularly: attitude, education, gender, health, income, occupation, social class, wealth

Inter-generational purchasing (and consumption) roles

Segmentation

Age Silo Products designed and marketed specifically at and for older people. May target end user and/or also audiences

Targeted Marketing The age-related positioning of

age-neutral products

Age Neutral Products bought by all ages and

marketed across the age spectrum.

Barriers are removed. Inclusive

approach.

Selected Marketing Product and marketing campaign

modified to increase relevance

to older consumers, but without

overt targeting.

Age Negative The positioning of products

intended mainly for older

people, but which avoid any

suggestion of age

Positioning – strategic options

Age Silo

Products designed and marketed specifically at and for older people.

May target end user and/or intermediary / influencer audiences

Images removed for copyright reasons! Sorry.

Age neutral or negative

Products bought by all ages and marketed across the age spectrum

May be purchased by older people but this is not promoted.

Barriers are removed. Inclusive approach.

Images removed for copyright reasons! Sorry.

TARGET MARKET Objectives

Segmentation Targeting

Positioning Branding

SERVICE

Customer experience /

journey. All points of

contact. Process

PRODUCT

Design Functionality

Packaging Convenience

Quality

PROMOTION

Promotion Mix Media

Communications strategy

Tone of voice

PHYSICAL

ENVIRONMENT Access

Facilities Recognition of physical needs

Retail activity Telephone

Online Route to market

Pricing strategies Price promotion Price packages

Payment methods Credit

PEOPLE

Culture Training

Empathy Empowerment Frontline staff

Marketing Mix

MARKETING MIX

ELEMENTS (200+)

Product

Service

Pricing

Distribution

People

Process

Physical environment

Promotion

ASPECTS OF

PHYSICAL

AGEING (22)

Cognitive

Sensory

Physical

Audit > Assess > Align

Source:

Stroud & Walker 2013

Marketing Mix alignment

Physical Ageing •Formulation

-Nutrition - Digestion - Mastication - Age-related health issues

• Food safety and hygiene • Portion size Economic • Premium price / VFM Psychological • Denial of ageing

Product

Diversity! There is not a single target audience

Ability to read labels / instructions /information

Intelligibility and relevance of information provided Ability to hold pack

Ability to open pack

Portion size and use-by date

Packaging (c) www.rhcadvantage.co.uk

• Rest areas and seating • Retail layout, including narrow aisles • Shelving height • Toilet facilities • Trolley depth • Staff – availability, empathy & knowledge

Physical environment

‘The idea that you can come up with a template standard for older people is nonsense’ - Jeremy Myerson, Professor of Design, Royal College of Art

‘A diverse audience which needs different creative approaches’ - COI ‘Common Good’ report

Insight Concept Imagery Format Copy Digital

Promotion Marketing communications guidelines

Avoid stereotypes, caricatures & negative portrayals

Visual Colour & contrast

clarity

Realism Font size &

& relevance choice

Imagery

Creative - imagery

Imagery

“When older people are featured in advertising or other marketing communications, it is likely to be in a stereotypical, patronising or negative way.”

of voice

Functional Benefits Plain, well-written, English

Rationality

& logic

Information

and facts

Avoid jargon and

Empathy

& honesty

Inform, then

entertain

Communications

objectives

Creative - copy

Digital usage by age. Ofcom

The Digital Divide - A social divide not an age divide - Closing with time – and closing fast

Cultural and language issues

-The internet is run by the young tech-savvy - Unnecessary assumptions & jargon

-Family - Social media - Search - Information - Like reassurance of multi-channel for commerce

Digital

Economic imperative – size, growth, value

Change. Historic assumptions & stereotypes no longer apply

Diversity and complexity. Segment with car

Economically active, discerning, experienced consumers. Relatively high expenditure on food / poverty line

Physical ageing – key factor. BUT - Younger and physically active for longer - And older for longer - Health conscious

Psychological barriers. Older people do not want to be treated as ‘old’

Positioning options - Greater inclusivity & removal of age barriers, or - Age Silo & greater consumer insight

Marketing barriers - Marketers & agencies must address ‘age myopia’ - Plan long-term - Consider entire marketing process and mix

Conclusions (c) www.rhcadvantage.co.uk

ageing consumer

For creative and strategic marketing consultancy regarding the ageing consumer

www.rhcadvantage.co.uk

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