Politicians and marketers alike are waking up to the fact that the country is rapidly ageing: by 2031, over-60s will form 30 per cent of the UK’s population. Already the “grey market”, as it is popularly described, is flexing its new-found economic muscle.
According to Saga, over-50s have 30 per cent more disposable income than under-50s and 90 per cent own their own homes. Some 72 per cent of these home owners have no mortgage. Yet industry experts complain that brands and agencies are still youth-obsessed and are failing to listen to, much less address, the needs of this audience.
Martin Smith, former group marketing director of Saga, founded Millennium Direct in 1995 because he was frustrated at agencies’ lack of understanding of this market. Five years on, he still believes that agencies and clients have failed to address the market. “A lot of lip-service is paid to this sector,” he says, “but there has been little substantial change. People have been aware of the demographic time-bomb for ages and now it has become a reality.”
Smith believes that the market is ignored partly because it is not perceived as glamorous but also because marketers cannot identify with it. “We were all young once, so even if we have changed we still have some idea of what youth is like. But we have no direct experience of what it means to be old,” he says.
Yet once they recognise the need to target the grey market, many marketers stumble at defining it, let alone effectively communicating with it. The single biggest mistake, according to Laura Haynes, managing director of brand consultancy Appetite, is to treat all people over an arbitrary age threshold in exactly the same fashion.
“People have to recognise that this is not a homogeneous market. More importantly, this is the first time in history that it has not been a homogeneous market,” she says. Haynes stresses the importance of attitudinal and lifestage segmentation, citing the gulf in behaviour and outlook between retired 50-year-olds and working septuagenarians.
Smith agrees: “To lump 20 million people together and call it the grey market is offensive and misleading. If you were targeting the youth market you would recognise that there are lots of segments within that age group and wouldn’t dream of treating them all the same. But that’s what people do with the grey market.”
Smith does, however, believe that you can segment effectively by age within the overall market. Millennium Direct breaks the market into three principal groups – thrivers, aged 50 to 59; seniors, aged 60 to 69; and elders, the over-70s.
The main factor influencing older people, Smith believes, is their formative years. “If you compare post-war to pre-war generations you can see tremendous similarities within each group but huge differences between them,” he says. “For example, seniors who grew up with rationing will be much more ‘waste not, want not’ than thrivers who grew up in the Macmillan ‘you’ve never had it so good’ era,” he adds.
Smith’s views contrast with research from RDSi into the grey market. Associate director Katherine Harris, says: “We asked respondents to bring with them images that described their lives at the moment and we could not believe the similarities. Neat and tidy houses, highly polished cars and pretty gardens – all very stereotypical images – appeared again and again.”
However, marketers should beware of making too many assumptions about older consumers. Interfocus chairman Matthew Hooper says: “It can be immensely patronising. It’s a bit like assuming the best way to communicate with foreigners is to shout loudly and slowly. Old consumers do not like to be reminded that they are old. People forget that regardless of chronological age there is a point at which people stop getting attitudinally older. Mentally most people over the age of 50 probably still see themselves as in their 30s,” he says.
Simon Hamlyn is director of marketing at Activelives.co.uk, an ISP/portal aimed at the grey market, which attracts more than 3 million page impressions per month. He thinks too many marketers overstate the differences between older and younger consumers. “People get very hung up about what these older consumers want but often it’s not that different,” he says. For example, the majority of new car purchases in the UK are made by mature consumers, with small models such as the Renault Clio proving particularly popular.
With the exception of products with an obvious age bias such as stair-lifts, the reality is that most brands appeal across a wide spectrum of age groups. The challenge for marketers is therefore to find ways to communicate equally effectively with all ages.
The answer, RSDi’s Harris believes, lies in media and message selection. “For example, press is sensible for reaching older people because they want to absorb and digest messages. Direct marketing can work well but is a double-edged sword. These people are much more likely to answer the phone and read mail than younger people and they like the fact that it’s personal and they have time to take it in. But it does mean that you have to get it absolutely right.
“Secondly, advertising needs to be ageless. It’s not a question of the role models you choose, because ads such as Marmite which use young people are very popular with this age group. It’s actually about clear structures with simple selling messages that they can decode easily. Advertising that tries to be too clever or abstract just leaves them confused and alienated.”
Interfocus faced this problem in its work with Lloyds TSB. Research had identified that a large proportion of private banking customers were older and it was essential to develop imagery with wide appeal that would convey the proposition and not alienate this age group. The solution was images of dancers, which underpinned the message of financial freedom.
The same approach can also be applied to packaging design. Design Bridge’s maxim is: “If you design for the young you exclude the old but if you design for the old you include everyone”. Yet a surprising amount of grocery packaging ignores the needs of older consumers.
In a recent accompanied shopping trip, Design Bridge found that particular complaints were the lack of small portion sizes and packs that could be resealed as well as items such as milk and juice cartons, ice-cream tubs and jam-jars that were hard to open. Important information such as sell-by dates was often felt to be printed too small to be read comfortably. Particular favourites were Silver Spoon Sugar in a carton and McVitie’s biscuits in a tube with a lid.
Appetite’s Haynes believes that the transition of the baby-boomer generation into the grey market could encourage radical change in all areas of marketing. “This is the group that created youth culture and they created the idea of brands. They are not going to stop now just because they have hit 50. Historically leadership came from the elders but this group changed all that. Leadership has followed them as they have grown older and they will fight to hold on to it.
“They are also used to influencing change up and down the age groups – when they were young they influenced their parents and now they are influencing younger people as well.”
Hooper agrees: “Baby boomers drove the economy in the Seventies and were at the forefront of a lot of technological changes. It’s no coincidence that, in the US, a large proportion of early Internet adopters were over-50s.”
If a grey market exists at all, it is unlikely to be found among the ranks of the baby boomers, however. This is a generation that refuses to grow old gracefully, and who can blame them when they have role models such as Mick Jagger and Cher? The greatest testament to their power may well be the enduring success of Harley Davidson motorbikes. When you see the story of 52-year-old enthusiast Betty – as recounted on the Harley Davidson fans’ website – it’s easy to see why this generation might object to marketing that deems them grey.