In about a year from now, the U.S. population that’s over the age of 65 will out-number people under the age of 15 for the first time in our country’s history. Our demographics are changing in ways we’ve never seen before. Because this has a variety of implications in all industries, marketers must adapt and evolve in order to capitalize on this change, especially those targeting the senior population.
We know what you’re thinking: what needs to change? Consumers in the longevity economy are just interested in walkers, medicine and incontinence products, right?
Wrong! This couldn’t be further from the truth. Generally, consumers over the age of 50 purchase most of the same things the rest of the world does. According to AARP’s study “The Longevity Economy” by Oxford Economics, consumers over 50 dominate 119 out of 123 consumer packaged goods segments. Their spending represents 46 percent of the U.S.’s gross domestic product. To top it all off, they have more brand loyalty than any other generation, especially the older of this group. That’s why it’s vital for companies to begin understanding the aging population and catering to their needs.
So what do marketers need to know about the 50+ demographic?
A common myth is that this demographic only spends money on healthcare. However, out of the $4.6 trillion this demographic spends, only $1.6 trillion of it is on healthcare and/or healthcare related items, according to the same AARP study. A majority the $1.6 trillion is spent in the last couple of years (or even months) of their life. This leaves up to 35 years of consumer insight and spend on the table. A majority of companies spend most of their marketing efforts on the 18-44 demographic. However, this group does not have as much disposable income, and the span of this consumer group’s spending is only 26 years compared up to 35 years that represents the 50+ demographic.
Next, it’s important to understand that the life stages after age 50 change in many ways, and for many reasons. This can dramatically affect a consumer’s behavior. Understanding the thinking and behavior of each stage of development of a person over 50 will give companies a leg up on their competition and help them acquire and retain consumers.
Companies who include the voice of the consumer early in the product development process build a better and more sustainable product. By including the consumer in all stages of development, you’re increasing your chances of success. You have their voice, feedback and insight right from the beginning rather than assuming what that they want, need and are willing to spend their money on.
Most companies focus heavily on the younger cohorts for marketing, consumer insights, research etc. So then why is it that when we reach a certain age as a consumer, these companies make assumptions? How much more successful would a company be if this age cohort was part of their product development team inside the organization in addition to tapping into them for research?
The big problem is that many of these innovation, strategy and product development teams are made up of young adults who simply cannot wrap their minds around what being 80 is really like. Your company could benefit from not only including the older consumer throughout planning and development, but also hiring older adults on their teams. With the boomer population staying in the workforce longer, this is a great opportunity for companies to hire this talent and use them for insights into a larger market.
People over the age of 50 have lived life and experienced many different things. Their external needs have dictated what they’ve done with their lives and now, many of these needs are gone, allowing them to see new choices and directions that are open to them. Companies who show they value this highly ignored demographic will unlock insights and consumption from the fastest growing market segment on the planet. How many companies can you think of that approach the 50+ demographic in this way and understand that the options for them are truly endless in all aspects of life? Even better, which companies can serve them up?
Given all of these insights, Link-age aims to continue understanding this rapidly growing demographic. One of the ways we do so is through simply asking them questions through surveys. Recently, we wanted to see where their imaginations would take them when asked what products they’d like to see created for older adults. So, we asked residents and older adults involved with senior living organizations of some of the 500 senior living communities in 16 states who compromise our survey pool.
Some responses were quite reasonable – hearing solutions, progress in rheumatoid arthritis treatments and ways to make it more difficult for seniors to be taken advantage of over the phone. Some should send R&D departments scrambling to the drawing board – easier to open containers, noise reduction devices, door opener upgrades, comfortable shoes that are also attractive and a motorcycle for seniors. And then, some that were rather surprising – a teleporter “to take me instantly to California, Iceland or wherever else I wanted to go,” new bodies and a system to replace visits to the doctor’s office. But, in total, the responses show that, contrary to popular belief, seniors are thoughtful, playful, insightful and far from the monolithic demographic that they’re too often portrayed as.
We asked this as an open-ended question to see where their creativity would lead them. Here are the most common answers we received:
- Around 12 percent wished for products for hearing and mobility improvement.
- Close to 9 percent would like to see larger devices and larger print.
- Better medicines, easy-to-open containers/opening devices, and better clothing, including shoes, were each listed by about 6 percent of the respondents.
So what’s the point? There are a lot of misconceptions regarding the senior market and companies can do a better job of understanding and catering to older adults. Those companies could stand to benefit from $7.1 trillion in economic activity generated annually by people over the age of 50.