Recently, Bloomberg News published an article called, ”Aging Boomers Befuddle Marketers Aching for $15 Trillion Prize”. It discusses how the corporate world hasn’t yet figured out to tap into the vast commercial market of us Oldsters.
With the kind permission of Bloomberg News, we have serialized it with our Olderhood Commentary on the salient points. It is longer than our usual articles so we’ve chopped it into TWO parts. Each Part is longer than our usual articles but the information is of high interest.
Original text in italics.
- Unmet Needs
- ‘Silver Shoppers’
- Spending Power
- Tipping Point
- Working Past 65
- ‘Revolution Coming’
- Under Radar
- ‘Ageless Explorers’
- Aging Consumer Paradox
Six years ago, the University of Cincinnati unveiled what it called an “unusual consortium” between its students, faculty and corporations, including Procter & Gamble Co. (PG), the consumer-product giant headquartered nearby. The group’s goal: to research and develop product ideas for consumers age 50 and over.
“The world has never before seen such a powerful market,” with about $3 trillion to spend in the U.S. alone, the school said then. The segment’s needs were “underserved,” requiring a shake-up of models to find the “sweet spot” between those needs and what was feasible to produce.
“This consumer segment is one of the more difficult ones to open up in terms of needs and wants,” said Matthew Doyle, 57, a 30-year P&G veteran who led the teams that invented Crest Whitestrips and now serves as vice president of the innovation lab, dubbed the Live Well Collaborative *. “No one was designing products just for them.”
* The Live Well Collaborative (LWC) is a non-profit founded in 2007 by the University of Cincinnati (UC) and Procter and Gamble (P&G). Its purpose is to specialize in research and development of products and services for the 50+ market place. It is a unique academic-industry innovation center where organizations collaborate on their knowledge of the baby boomer market, which are over 78 million people strong with buying power in the excess of $2.3 trillion. The LWC was formed as a response to change the way corporations think about how they design products and services to meet the needs of America’s aging population.
Olderhood commentary :
The corporate world is slowly beginning to realise that the “Oldster” (a term coined by Olderhood) Market is not only enormous, but is not well served. With some ingenuity, and a lot of innovation, the market potential of the Oldster Market is staggering. The notion that old folks like us, need medical supplies designed for us – and pretty much nothing else – is not only naïve and demeaning, but also commercial blindness.
As we get older, our likes and dislikes change. The cashmere sweater we cherished in our 40s, probably to show off more than anything, just doesn’t seem so hip nowadays. The hot chili fajitas we so loved, probably causes us more heartache, or heartburn, than we ever imagined, or experienced, before. The low-slung sports car we zoomed about in terrorizing the neighbours still looks cute, if we could just climb in the damned thing.
Unfortunately, as we got older and our tastes changed, we seemed to be left behind by the corporate world, more intent on forcing loud, senseless and irritating advertising at us, to buy technically-advanced gadgetry which we have no idea what it does, far less why we would buy it. Not to mention, how to use it.
Time to change Mr. Executive Youngster… !!!
2. Unmet Needs
They’ve discovered that seniors treat their pets more like grandchildren than children, and spoil them accordingly. They’ve created biomechanical models of the human hand to understand how hard it is for arthritic consumers to open bottles of P&G’s Tide. And they’ve thought long and hard about how to ease Grandma’s journey through the airport.
What Live Well hasn’t done is commercialize a single product. They are all still looking for those sweet spots — the unmet and often unarticulated needs of older consumers, who for decades have been largely ignored by youth-obsessed brand managers, marketers and product designers.
That’s not to say there aren’t products targeted at the senior circuit – Depend undergarments, Fixodent denture cream, MedicAlert bracelets, even Swarovski crystal-studded walking canes. And who can forget LifeCall, made famous by late-night TV ads featuring the poor old woman who has “fallen and can’t get up”?
Olderhood commentary :
It seems that the surveys aimed at Oldsters to determine what they want, are by and large, gimmicks. “Design a marketing plan to allow us to tap into the older market”, says the chief executive of the consumer-based corporate. Marketing Department then kicks off a survey – not because it is the sensible thing to do, but because they don’t know what else to do. “The results are very encouraging chief.” “Good job Marketing. I’ll advise the Board of our progress.” Six months later, at casual post-Board meeting cocktails, the old non-executive Director asks, “Whatever happened to that survey we did on the older market..?”. “The demographics worked against us.” He gets told. “Huh..?” he says. Case closed.
The corporate that is serious about tapping the Oldster Market would realistically have an “Oldster Board” working alongside the main Board. Give them the powers to meet, speak and listen to people of their own age, then design products and services around their findings. By all means, integrate their findings and recommendations with the overall strategic plan of the corporate itself, but unless the designs are built by people “in the same age bracket”, then the younger members of the Board simply won’t “get it”. In time, as they get older, they will get it, just not now.
3. ‘Silver Shoppers’
The problem with those products – beyond the crummy ads – was that they highlighted and reinforced the debilitating effects of aging. They’re palliative in nature, tools to make the long goodbye a bit less painful. “Use them, feel old” could be their slogan.
Sure, they rack up sales – Depend generates about $600 million a year, according to Ali Dibadj, a Sanford C. Bernstein & Co. analyst – and all sorts of everyday items, from aspirin bottles to car seats, have been tweaked to appeal to aging consumers. Companies are generating more revenue from older people, as well: The global adult incontinence market has grown 47 percent to $4.7 billion over the past five years, according to data tracker Euromonitor.
That’s just the tip of this demographic iceberg, however. What existing products haven’t yet done is create a lasting emotional connection with older consumers, which is the true litmus test of a brand. Nobody aspires to own adult diapers. Boomers don’t want to just spend money on the things they need; they have the dollars and the desire to splurge on the things they truly want.
Olderhood commentary :
The day will come probably, that we may all need adult diapers. Maybe at night too. But until then, why must we be boxed into an old market category. If we go to the gas station they don’t ask us what age we are – we just buy the gas and move on. But if we buy a bus ticket, they do ask. If we buy things at the drug store, they say “Wednesday is Seniors Day”. So what !!
We actually don’t mind being old. It is what it is. A number – nothing more, nothing less. But we didn’t get stupid overnight, so why be concerned that yesterday we could buy designer jeans but today, magically we need diapers.
We really want to watch TV commercials selling us products that we can use and would love to have. We abhor watching commercials where they use geriatric people (no offence meant) to convince us that we need to buy a long-handled swiffer brush to clean the top of our wardrobe. Who cares. Let it be dirty. The kids can come over and climb up and clean it if it bothers them so much.
4. Spending Power
That’s where companies so far have failed. And that failure will cost them: In 2017, approaching half of the U.S. adult population will be 50 and older and they will control a full 70 percent of the disposable income, according to data tracker Nielsen. By 2050, there will be 161 million 50-plus consumers, a 63 percent increase over 2010.
Demographic trends abroad are even more pronounced: The number of Chinese people 60 or over is set to double by 2053. Globally, the spending power of consumers age 60 and older will hit $15 trillion by the end of this decade, up from $8 trillion in 2010, according to research from Euromonitor. No surprise, then, that P&G’s Live Well project has opened a Singapore outpost.
Olderhood commentary :
These numbers are astonishing. What that says is that at least 150 million Americans will be 50 and older in 2017. 150 million !! That’s one big pile of diapers.
More to the point perhaps, they will control 70% of the disposable income.
If industry executives in real estate, clothing, foodstuff, utilities, medical, transport, etc., cannot understand how to sell into this demographic market, then they need help. Help from the seniors they laid off, or let go, probably.
The problem we have with the interpretation of these statistics is if this demographic group is not spending their disposable income on products they want to buy (over and above the basics of life … food, heating, housing, etc), then what are they spending it on ..? And more importantly, what is influencing their decisions to buy ..? … if, as we suspect, corporate marketing is NOT aimed at them. There’s a mismatch somewhere it would seem.
If that mismatch could be worked out and resolved, then the matching of want-to-sell and want-to-buy would be a massive win-win.