Half of all babies born since the year 2000 in rich nations will live to be 100 years old, according to a study in The Lancet medical journal. Marketers may not yet be familiar with offering products and services to this almost unknown consumer group aged 75 and over, but these people will soon exist in great numbers. And the opportunities for brands across all sectors are huge.
This isn’t the “grey market” as we know it now. The 100-year-old consumer of the future may have had plastic surgery at 80 to improve their looks, have benefited from financial products which projected income and outgoings as long as 50 years beforehand and live in a community built around interests and lifestyles rather than age-group.
A research study from consultancy Clear, shown exclusively to Marketing Week, suggests that companies should begin planning for the 100-year old consumer immediately. The report found that few businesses were ready to do so.
Clear group board director Steven Melford says: “This is virgin territory. These opportunities don’t come along that often and if you move quickly and have the right kind of insight, you can own that space a little. It’s almost like a gold rush and it can involve lots of different sectors.”
During a Wii preview, I saw an elderly man smiling to himself while playing golf. I felt immense pride in our work at that moment. With a conventional controller he would never have been able to play our games.
Satoru Iwata, Nintendo
But the 75- to 100-year-old age bracket should not be seen as a homogenous group. People’s lifestyles, locations, life-stages and physical and mental capacity will influence the brands with which they engage. For some marketers, it will require finding a whole host of new targeted products for the older consumer; for others the challenge lies in striving to serve customers for an extra 30 years.
One brand trying to stretch its universal appeal to prepare for the arrival of the 100-year-old consumer is Nintendo. It has a selection of brain training and bowling games, among others, designed to appeal to older generations. It even supplies its Wii consoles to Bupa care homes.
Finding that Wii appeals to older consumers initially surprised Nintendo. “During a Wii preview, I saw an elderly gentleman smiling to himself while playing golf,” says Nintendo president and chief executive Satoru Iwata. “I felt immense pride in our work at that moment. I’m sure that with a conventional controller, people like him would never have been able to play our games.”
For Dick Stroud, managing director of specialist marketing agency 20plus30, this is the best example of a product with broad appeal. “Nintendo was attending ‘older, richer, wiser’ conferences five or six years ago, whereas the rest of the attendees were from classic ‘silo’ products [for people with particular needs],” he says.
“This is an example of extending a product line into a completely new market successfully. Usually the response from companies is that if you target one group you exclude another, but Nintendo has done it very smartly.”
Apple’s iPad is another brand ideal for the elderly, suggests Stroud, citing its large screen and simple design as useful features (see Tips, below) for those people of a greater age.
Meanwhile, Harley-Davidson, which is also working on attracting young fans, hopes to embrace older people by rolling out three-wheel motorcycles to Europe (see Harley-Davidson case study, below). And DIY store B&Q has a work ethos that people with the most life experience will have the most knowledge and already employs many older people. Its oldest employee is 95-year-old Sydney Prior, who works in its New Malden store in south London (see B&Q case study, below).
There are clear business benefits to employing a workforce that is age diverse and reflects our customer profile.
Martyn Phillips, B&Q
But while these brands are busy adapting to the rise in numbers of older consumers, Clear’s Melford warns that few other companies are so prepared. Age UK, which comprises Age Concern and Help The Aged, says there is still a big opportunity being missed to talk to people aged over 65. This group alone spent £97bn in the UK in 2008.
Age UK general manager of group product development Mark Gettinby says that while well-designed products will obviously win over older consumers, nobody has got everything right yet. He says: “There are some elements of things which are quite good. But when it comes to retailers, for example, they have a huge amount to learn in terms of engaging with particular segments. It’s not just packaging or servicing, it’s also about communication and how older people should be targeted and addressed.”
Age UK is running a research programme with retailers such as Comet to help make buying products easier for older people. The brand will then apply what it has learnt as a pilot in several stores, before rolling out training for staff.
This programme will contribute to Race Online 2012, a government initiative to help educate the 4 million over 65-year-olds who have never accessed the internet. And the charity argues that the financial implications of marketing better to older consumers is clear: Age UK Enterprises’ range of products and services made a £22.5m profit last year.
Older consumers are ignored by brands in many product areas, even if they are producing products which are so easy to use that all ages can do so, says Stroud. With the 100-year-old consumer beginning to emerge, he says, this is increasingly worrying. He cites the holiday and travel sector as one that caters well to an older market, but travel insurance and single person supplements are major gripes.
Part of the reason that older consumers are not considered properly may simply be because those people coming up with products and campaigns tend to be young. Brand managers are likely to be at the more youthful end of the age spectrum. Clear’s Melford adds: “They often come up with a positioning which is for them and people like them. The older age groups are not thought of as sexy or exciting. It doesn’t feel as if it is the place that people want to be.”
It is not just products that will need to be overhauled. Communication methods also need to change. At the moment, many brands use direct mail to talk to older consumers. Matthew Hunt, head of planning at DDB Health, which works with a number of pharmaceutical clients, says: “Those that have grown up with letters value direct mail much more than anyone under the age of about 30.” But sticking to direct mail may miss the places where future 100-year-old consumers spend time.
Social networking site Facebook has an ageing population – its biggest growth area is members aged 55-plus – but other types of online forum are equally relevant, says Hunt. He cites local networks such as Actonw3.com and Chiswickw4.com as places where older residents congregate. “No marketers worth their salt would say ‘we’re not going to use digital channels to reach older people’,” he claims.
Experiential marketing could also be used better to reach elder consumers. Tetley has already started this process with its sponsorship of “communi-tea” days at Bupa care homes, and food brand Knorr also sponsors “virtual cruises” in the homes. With “old age” set to stretch for so many decades, experience-led marketing may become increasingly important.
But rather than thinking about attracting 100-year-old consumers merely in their dotage, some brands are thinking about how they can lock in consumer loyalty for their whole lives, and achieve an extra few decades of that relationship.
Bupa is aiming to stay with customers through their entire lives with its insurance products and care homes, says Anna Wilcox, marketing and communications manager for Bupa Care Services. She says: “We try to engage people who have our private medical insurance throughout their lifetime. People who have our insurance for 30 years may not know that we have care homes, so we communicate with them to say they can stay with the business and move into a different stage in their life with us.”
And while moving into a care home is often a decision made at a crisis point in someone’s life, Wilcox says that people are starting to plan ahead more. With a longer lifespan in mind, this could happen even earlier in future.
For Melford at Clear, thinking about customer lifetime value is absolutely crucial. “There is this big extra part of people’s lifetimes that marketers need to be thinking about now. It’s provision planning for brands in financial or health terms,” he says.
Finance is an obvious concern for an ageing population and the vision of a “golden” retirement may not be feasible for much longer, suggests Ben Glassock, head of qualitative insight at Clear. He says: “Baby boomers have generated this desire and vision of a golden retirement that nobody else will get. This generation has lived through massive increases in wealth and rises in property prices, meaning that they can go off round the world for 20 years. But very few future generations will get to achieve that.”
Marketers should be thinking about the 100-year-old consumer from a social and a competitive point of view, Glassock says: “It’s wildly scary when you look at it from a societal and governmental point of view… huge swathes of people are going to be living for a long time. Where are they going to be living? What are lifestyles going to be like when they are 70, 80, 90 when they don’t have a pension and the government pension may be feeble?”
Financial brands must think more creatively in future, says Alison Wright, strategy director at agency Engine, who was previously marketing director at Prudential. “There will be more of a need for products that help you smooth income over a lifetime, and more of a need for flexibility.” She points out that “save more tomorrow” plans can be found in the US where employees commit to saving part of their future salary increases towards retirement savings.
Pension provider Aviva will run a new execution in its “moments that matter” ad campaign next month to encourage people to shop around for annuity rates when they decide to retire. Aviva head of brand Susan Helmont says this marketing initiative aims to focus on a variety of target audiences and lifestages.
“You have a whole generation of people for which there is no fixed point at which they retire. They might think about it for a long time, they might reduce the amount of work they do and then not work at all,” she says.
“The moment it matters is when you decide what to do when you retire. Pensions companies have sent out broadcast messages saying you should save for your retirement but shouting this hasn’t resulted in people saving more. So we have recognised that it is about making the most of the savings they do have. It is about demystifying some of the elements around a subject people would rather not engage with.”
The six-week campaign, which first started running last summer, resulted in a 31% increase in calls regarding annuities, claims Helmont. The 100-year-old consumer is a lucrative opportunity, she says: “I expect it’s a fantastic opportunity for all brands. For us, it’s yet another reminder that we need to adapt and respond.”
Traditional images of retirement were avoided in the campaign, says Helmont, warning that old age need not mean unsexy. After all, Millward Brown’s recent study of what consumers think about celebrities, published earlier this month (MW 1 April), research found that four of the top ten positive celebrity role models are over 70 years old: Judi Dench, Morgan Freeman, Sean Connery and Terry Wogan.
Joanna Lumley, aged 63, was the top positive role model in the Millward Brown study and stars in Müller’s current advertising campaign for Vitality. She was chosen to appeal to what the brand calls the “holding back the years” group, aged 55 to 70, which focuses on maintaining good health through balanced meals.
Müller interim marketing manager Jonathan Dee says this demographic is very important to the brand. He adds: “The “holding back the years” group is the main focus for Vitality at this stage and we plan to resonate with these consumers through advertising and on-pack communication. Joanna is an excellent role model to drive awareness of the key messages for Vitality. She’s intelligent, looks great, lives life to the full and is in touch with contemporary culture – all qualities which will resonate with our key audience.”
While Müller’s use of Lumley shows one particular age segment as active and health-focused regardless of years passed, other brands believe that targeting a broad range of consumers is more effective than aiming for older people alone. Marilyn Wicks, consumer director at Lexis PR and head of its Sixty? specialism which focuses on older consumers, says Marks & Spencer’s use of model Twiggy is a clever way of appealing to older people.
“Putting her among women of different ages is not saying ‘this ad is for you, you are old now’. It’s saying ‘this is for everyone and there is someone there I will relate to’,” she says.
Cereal brand Shreddies agrees that targeting everyone in a broad sense is inclusive of older consumers and doesn’t put off anyone. The brand uses older characters in its advertising, with 85-year-old Carry On actor Leslie Phillips featuring in its latest Knitted By Nanas execution.
Cereal Partners corporate affairs manager Andrew Pyne says: “The brand is not targeting older consumers; it has a broad family target audience as an all-family staple. The characters and actors used are just a function of the creative route and the script, rather than being chosen to specifically respond to an older market.”
Whether brands target older people through specific initiatives or use general appeals to target everyone, they will have to adapt to the presence of the 100-year-old consumer. These people will soon exist in their millions. So for marketers, the message is clear: get in quick and you may just be able to turn silver into gold.
Dick Stroud, managing director of agency 20plus30, suggests tips for success in targeting older consumers
1 ’Age’ is a simplistic way of looking at consumer behaviour. Focus on lifestyle instead. The most common mistake marketers make is not segmenting the market. Take account of lifestyle, life stage and geography. Behaviour is influenced more by lifestyle than by age, so it is better to focus on that. And don’t forget gender: the differences between men and women increase with age.
2 Don’t confuse specific age-related purchases with general ones. Whichever you are marketing towards, there is an emotional decision involved. If you buy a stairlift, for example, you might feel you are admitting to not being able to cope and being less mobile. You have to be very careful about how you pitch communications.
3 Don’t drift into assumptions about how people use things. The Apple iPad will be used mainly by an older market. Half of sales of the Amazon Kindle are to people aged over 50 and if you consider the iPhone feature-by-feature, it is an extremely age-efficient phone.
4 Consider the physiological effects of ageing. These are in three broad categories: physical, such as strength and digestion; sensory, such as eyesight and hearing; and cognitive, such as comprehension. Look at these areas versus how you reach customers through products and services. How do those physiological challenges relate to design, usability, packaging, pricing, and in-store access and service? How do they relate to media, PR, advertising web design and search?
5 The recession is still the most important factor in determining marketing activity at the moment. You should certainly tear up your current strategy regarding older people as it will affect consumers in years to come as well.
Life at 100
With so many people predicted to live to 100, research agency Clear carried out a study with people aged between 20 and 70 in the UK, US, Netherlands and China. This examined people’s attitudes and behaviour regarding the fact they may live to be 100 years old.
Clear group board director Steven Melford says: “There are two big opportunities. One is about how you come up with products that are simplistic enough to work for older people: imagine what you would want if you were 100 years old now.
“The second big opportunity is to see what companies can give people in their 30s now to help them prepare for old age. That introduces very different types of product and brand-led opportunities.”
Melford says that brands need to understand different attitudes about living to 100 in order to properly segment product portfolios and create marketing campaigns. Ben Glassock, head of qualitative insight, points to pensions as an example: “You can be a brand and think that there is only a certain percentage of people who are interested in what you have to offer. But if the alternatives are not in place, of course they will dismiss you.”
The challenges of old-age are much more visible in China, where generations often live together, and it is common for working adults to save 30-40% of their salaries for the family as a whole. Brands and businesses can capitalise on this, says Glassock. He suggests: “It’s about how we change the [Western] mindset. There is the sense that retirement is a big long holiday. Government and brands need to build new stereotypes and imagery around the future.”
Melford and Glassock suggest that brands get ready for the 100-year-old consumer by following the following tips:
- Redefine or rebrand ageing. Look at ageing from a much more positive perspective and create businesses around this, such as more jobs or consulting roles specifically for older people, which highlight their value and combat stereotypes.
- Create financial services products which project not just potential income but likely outgoings at 100. New offers might take the form of health plans or “sweeper” bank accounts to save what is left at the end of the month.
- Help people imagine their old age positively. Inspire consumers with ideas that make this new reality closer and easier to imagine. Job centres can advise on how to turn hobbies into businesses while volunteering could be rewarded with tax breaks.
- Brands can educate. Businesses can encourage older people to pass on skills to younger consumers, while financial counsellors can talk to people during mid-life. There could be opportunities as life coaches for older people.
- Technology enables. This is a huge area of growth for ageing consumers, such as more user-friendly computers with basic buttons, “walk around the block” games and dedicated TV channels.
- Make life easier. Products and services that enable older people live fuller lives for longer will become more important. One example is small business banking in China, which lends money to entrepreneurs who may be older. Priority travel services for older people and fitness plans designed for ageing may also become important.