Are manufacturers blind to the rich senior slice of society?
consumerism', overlooking the highly disposable incomes of the
third generation when it comes to product, marketing and
advertising.
Food manufacturers are failing to cash in on the 'new-age of senior consumerism', overlooking the highly disposable incomes of the third generation when it comes to product, marketing and advertising.
In a new report from market analyst Datamonitor, figures reveal that between 1997 and 2007, the number of European seniors is set to rise significantly from 127.4 million to 147 million in 2007. This, together with the fact that they possess high disposable incomes, makes them a highly attractive and profitable segment.
In 2002, the European average disposable income was valued at €19,800 in the 50-64 age group. This compares to €25,324 in the UK, expected to rise to €27,487 by 2007.
According to the report, the drivers behind this income trend include empty nesthood, higher earnings, an increased likelihood of a large inheritance and lessening impacts of long-term financial payments.
But high levels of inequality do exist among senior consumers. Those aged 65 and upwards are on a lower income and with the pension crisis deepening, there is little chance of the gap diminishing. As a result, saving and simplicity are still major concerns.
The report highlights the phenomenon that Europeans turning 50 today mark the first generation of mass consumers who have grown up immersed in a consumer culture.
They will behave and consume differently from their parents, marked by the desire to be seen consuming the right products. A need that will accompany them into their twilight years. Datamonitor suggests that as a result of increasing hedonism, an innate fear of ageing and their consumption history, 'seniors' are more and more likely to embrace so-called youthful brands.
"Due to delays in the average age of first births and a growing tendency for young adults to remain in the parental home for longer, current and future cohorts of seniors will be subject to growing influence from their off-spring," said Datamonitor analyst Daniel Bone.
The report found that in order to capitalise on the growing number of European senior consumers and their comparatively high disposable incomes, marketers must show greater sensitivity to their changing lifestyles.
With a new generation of senior consumers and a blurring of values between the so-called 'older' and 'younger' age groups, CPG players should follow the example of others such as GAP in realising that they must make fashionable products available to and inclusive of senior consumers, writes the report. GAP's 'ageless' campaigns partly account for its popularity with mature consumers, especially those seeking to retain cool credibility.
Blowing the myth to pieces A significant reason for advertisers shying away from consumers over 50 is the conventional wisdom that they are very brand loyal and less likely than younger people to try new products, continues the report.
"This is perhaps the greatest marketing myth associated with senior consumers and stems from historic and stereotypical references," said Bone. "In reality, many senior citizens are moving into a new phase of life ready to experience new things, particularly once they are unencumbered by children.
Critically, food purchases tend to come into line with food preferences once the kids leave home simply because there are fewer people to please. They have more time to focus upon themselves and this is often reflected by different consumption patterns," he added.
Seniors cynical of advertising ? In a marketing world still obsessed with youth culture few marketing campaigns and associated advertising messages speak explicitly to the third generation. The report warns that even when they do, there is a tendency to stereotype and patronise the lifestyles of senior citizens or for the advertisement to lack relevance. Marketers continue to show reluctance in using older models in advertisements even though the over 50s want to see more people their own age in commercials.
One theory, suggests Bone, is that because the world of advertising has evolved away from simplistic structures to abstract messages, seniors have become increasingly cynical of advertising. This means they often turn to friends and family as more trusted and credible sources of information.
"Marketers can communicate to seniors by embracing 'senior specific media' as well as portraying senior lifestyles more positively through the use of active images which illustrate their enjoyment of life thus leveraging the positive values of maturity".
For details of how to buy Datamonitor's report Targeting Seniors Effectively, click here.
