A silver tsunami is rolling through the retail business. But is anyone really watching? This stormfront represents the growing army of 65+ consumers in urban, suburban and rural areas who are not only internet savvy, but also love shopping at stores for convenience and as a social and recreational event.
The problem is that many in retailing have a perceived generational bias, focusing their efforts on capturing the much discussed and perhaps overhyped millennial segment, along with Gen Z customers, the latter are still living at home and dependent on getting cash, debit and credit cards from their parental units.
Of course, they are young, hip and cool-all the things I’d like to think I was at their age. They represent an estimated 25 percent of the U.S. population and, by some accounts, will be close to 40 percent by the end of the decade.
Mining “Old Gold”
Unless you’re operating a surf shop in Laguna Beach, producing YouTube videos on the latest make-up and fashion trends or offering other curated advice and apps on what’s trending, you may be missing out on “Old Gold,” active, educated, ethnically diverse and healthy older consumers who are still big spenders.
In fact, their attitudes and behaviors can help reshape retailing for those who are willing to abandon old stereotypes, develop new store layouts, updated products and packaging and use technology that will enhance the quality of their lives-especially those who are aging in place within the urban core.
But let’s take a deeper dive into this demographic. Globally, this segment will represent 13 percent of the world’s population by 2035 and is growing four times faster than younger groups, according to the United Nations Population Division. Additionally, people over the age of 60 will drive nearly half of the growth in consumption in North America over that time period. Their smaller households drive up their spendable income and household wealth compared with other groups. This is particularly good news for supermarkets, since the group is apt to spend less eating out and more money to prepare meals at home.
The same group, often thought of as retirees, will also account for the biggest rise in the much publicized gig economy, further increasing spendable income.
This was underscored by a McKinsey study which said that the 60+ contingent will drive about half of all household spending between 2015 and 2030 in areas such as personal care products, housing, food, entertainment and apparel-not to mention healthcare spending.
Addressing Senior Needs
But retailers are going to have to work for a piece of this pie. The study found that only 37 percent of respondents said stores have adequate handicap ramps and door access and only about one-third believe aisles are handicap accessible.
Retailers in different segments are successfully implementing senior strategies. Lawson, the Japanese convenience store operator is catering to inner city seniors with home delivery of Bento boxes containing healthier food choices. In stores, the chain has installed elder care support counters and a nursing care consultation desk.
Because seniors might have trouble reaching or bending, Walgreens and CVS have reset the height of their counters and are putting in carpeting to prevent slipping. They’ve also placed magnifiers on the shelves for reading the fine print on packaging.
In-store music has also become an issue if it’s too loud and distracting to older shoppers. To combat this, An ASDA store in Manchester in the UK, instituted a “quiet hour” to make people comfortable while shopping.
Adeg and Kaiser stores in Germany, customized shopping carts with seats, and emergency call buttons are located throughout the store. These chains are also widening aisles, improved the lighting and added non-skid floors in new stores.
UK shopping center developer Hammerson is improving its parking facilities and adding more restaurant and leisure facilities such as movie theaters and places where older shoppers can relax with family and friends.
In Japan, retail giant Aeon Co. has renovated 13 outlets to cater to seniors, with earlier opening hours and services that encourage “asatomo”, which translates to get-togethers with morning friends.
In an interview, Kohei Nakahara, an Aeon store manager, said the company surveyed elderly people in nearby parks. “We brought what they want to do into our store, and it resulted in them staying longer. We want to make the store a place like a community hall for neighbors,” he said.
However, all this does not negate the need for technology, which is very important to older consumers. Studies have found that nearly 70 percent of senior consumers have both landlines and mobile phones.
Moreover, the 74+ demographic is the fastest growing among social networks, according to the Pew Research Center, an indication that their digital competence is creating a valuable outlet for marketers to reach with products and promotions.
However, there is a generational issue for retailers to deal with if they are to develop a more digitally-friendly environment. Seniors aren’t interested in downloading the latest apps. And marketing messages should be kept simple and relevant.
Alibaba is tackling the issue head-on with an elderly-friendly version of its shopping app Taobao which includes a simpler interface for seniors to navigate. There is also a new “pay for me” function” on the app linking an elderly customer’s account to that of their children, allowing the next generation to pay for their parents and assist in purchasing. Alibaba has also advertised jobs for Senior Experience Officers aged 60 and over to gather seniors’ feedback.
JD.com, China’s second-largest e-commerce platform, started using drones for more efficient deliveries in the country’s vast rural territories. This has been particularly helpful to older customers whose mobility is limited. Officials at JD.com said it has made online purchasing more attractive to older shoppers and increased their purchasing.
And If you’re asking for their personal information, you must clearly explain why you need sensitive information and how it will improve their shopping experience.
In the end, you can either choose to ride the silver wave or duck under it.