Sounding Board: The “Silver Economy” can be golden

Older consumers still have plenty of influence and spending power. It is Sunday morning and I am in my office listening to the radio—yes, I listen to a radio—contemplating my first column of the new year when I hear the old Sinatra standard Young at Heart. Those of you unfamiliar with the “Chairman of the Board” can either go directly to your Twitter feed or stick around and consider what this means to the future of retail marketing. Over the past year, we have seen an industry obsessed with Millennials—a seemingly mysterious, petulant, undefinable and disloyal demographic. This is understandable given that this up-and-coming group—age wise if not economically—can have the power to make or break. And I am as guilty as anyone when it comes to co-opting the conversation about this group’s potential. I was doing some research for a panel on cosmetics I conducted for PLMA. What I found was an industry in the process of re-examining itself and its customers, product development and marketing with an eye toward older consumers—a more lucrative market then it gets credit for and one which all retailers should address more closely throughout the store. To give you an idea of their buying power, Euromonitor estimates that by 2020 the 60-plus crowd, or the “Silver Economy” as it has been called, will have global spending power of about $15 trillion. This influence is driving a lot of industries. Obviously, “Big Pharma” is one of the major beneficiaries and this has led to expansion of pharmacy operations and in-store clinics. Then we have the automotive industry which estimates that over-65 car buyers in the U.S. account for $140 billion in sales. However, one of the best examples of appealing to older customers is taking place in the cosmetics and fashion industry. Earlier this year, Nars Cosmetics featured 68-year-old actress Charlotte Rampling in its ads and the company’s Shiseido division plans to introduce a line specifically for senior women next year. Jessica Lange, 65, was featured in designer Marc Jacobs’ beauty line. Former ‘60s supermodel Twiggy has had a longstanding relationship with Marks & Spencer in the UK and L’Oreal signed 69-year-old actress Helen Mirren. The message—60 is the new 40. Then there is the question of the shopping environment itself. Japanese retailer Aeon is developing malls with wider aisles, seating and a more upscale feel. There are examples of many retailers doing the same things to enhance the in-store experience. However, the problem does not necessarily lie with retailers, but with a de facto age discrimination practiced by marketers and advertising agencies obsessed with youth. Quite simply, the population is getting older but creative types at agencies are getting younger. They should, but may not, understand the complexities and value of catering to older consumers. Manufacturers are just as much to blame, often intent on putting a younger face to their products thinking this will be the fountain of youth for their bottom line. Yet in doing so, they run the risk of overlooking, and possibly alienating a large and lucrative segment that also feels patronized by “age appropriate” messaging. The solution is thoughtful intergenerational marketing and advertising extending from traditional print vehicles to the digital world. Newly released data from the Pew Research Center indicates that older consumers are deepening their reliance on the Internet although they still lag in adopting new technology. Approximately 59% of seniors report they go online—a six-percentage point increase in the course of a year—and 47% have a high-speed broadband connection at home. Additionally, 77% of older adults have a cell phone, up from 69% in the last study done in 2012, according to Pew Research. But what do we really know about their decision-making process and brand choices and preferences? We can no longer make random assumptions about this group then we can any other. Empirical studies have suggested that seniors prefer long-established brands. Others have found they are more willing to innovate than their younger counterparts. We need advertising and promotional messaging that combines emotion, education and rationalization. One thing is clear—age is just a number and an arbitrary way to assess people. It is long past time for every industry to shed its stereotypical views of a group that is still paying the rent. Incidentally, Millennials grow up too.