Is your business missing the opportunity to turn silver into gold?
The scale of the grey market here is difficult to quantify, but 1.9 million people will be over 65 by the year 2041
Published 11/03/2010 | 05:00
THREE hundred people gathered in the Royal Hospital Kilmainham last week to talk about doing business with the over-50s. While the speakers at the 'Business of Ageing -- Turning Silver into Gold' conference came from diverse and sometimes unexpected backgrounds, including Intel and ACT Venture Capital, they all agreed on one thing; that Irish business is missing the enormous opportunities offered by the spending power of the over-50s.
The scale of the grey market here is difficult to calculate, which is one of the reasons why it is sometimes ignored and it is getting more important everyday. Superquinn founder Fergal Quinn calculates the over 65s now account for 700,000 and will rise to 1.89 million by 2041.
"This is a staggering increase of 169pc," Senator Quinn told the conference. "Furthermore, the number of people aged 75 and over will reach almost one million by 2041, three times the number living now." Even more dramatic is the change projected in the 85-plus population, which will rise almost five-fold from 74,000 in 2006 to 356,000 in 2041.
"There is a huge skewing of wealth in certain age groups," says author Dick Stroud. Mr Stroud adds many people fail to realise just how big the market is because they do not count spending on items such as skiing holidays when totting up spending by the elderly although the elderly remain among the most enthusiastic skiers.
While emphasising that the over-50s control the bulk of the wealth in most countries, he cautions that behaviour is still more influenced by lifestyle than age which means the grey market is far from uniform.
It encompasses everything from user-friendly and non-institutional-looking toilets, bathtubs and beds to holidays, cars which are easy to drive and sophisticated financial services products that help the elderly to pay for their care.
Despite the variety of lifestyles among the elderly, they are often ignored by advertising agencies which tend to be staffed by young designers. The average age of people working in advertising in Ireland is 30, according to Gary Brown, the 51-year-old chief executive of ad agency BTL DDFHB.
Mr Brown says young advertising staff think older people are deaf and dumb and play golf instead of having sex or driving cars. Around 90pc of marketing briefs in advertising agencies target the 22-35 age group, he says.
Brown has a point; next time you see a car with a 2010 licence plate, take a look at the driver's age. Chances are that he or she is an older consumer spending their savings or their bullet-proof defined benefit pension.
Then try to think of an ad for a car that features anybody other than a young male driver or young parents with children. In car-land old people simply don't exist despite the recession which has disproportionately affected the young and knocked a hole in car sales everywhere.
The same can be said for advertising for holidays which invariably show bikini-clad women or young families on the beach when the elderly make up a large share of holiday makers.
Car purchase was the biggest spend for Irish over-60, according to research from Bank of Ireland published during the boom. Home improvements and holidays came next although those living in Dublin rated holidays as their top spend. More than half of those questioned go on holidays abroad up to three times per year.
The over-50s face a host of different living arrangements and lifestyles, which affect how they consume. Some families are seeing so-called "boomerang kids" who return to live at home after moving out to go to university or after divorce.
Many grandparents are also becoming childminders to their children's kids and this greater family interaction is creating a generation of "blended families". Three in ten over-60s with grandchildren also mind grandchildren on a weekly basis while their parents are at work and 13pc still have children in full-time education, according to the Bank of Ireland figures.
The complexities seen in the different types of modern family unit offer a real opportunity to financial services brands, according to Dr Roger Donbavand of the UK-based Business Development Research Consultants.
A recent Standard Life campaign featuring Dublin-born Mariella Frostrup led with the line "People don't grow old like they used to. Why should your money?," Dr Donbavand told 'Marketing Week' recently. Dr Donbavand likes this sort of advertising rather than old-fashioned images of the over-50s on surf boards and the like.
"This recognises people in their 50s and 60s have changed quite significantly. The Standard Life campaign connected with this age group, because it didn't use cliches. It also emphasised self-esteem in this age group, which you don't generally see in financial services."
Values such as self-esteem and spiritualism are far more likely to connect with older people who tend to ignore the sort of peer pressure used by advertising aimed at younger consumers.
"The ageing population has profound implications for society as a whole in terms of healthcare and service provision and provides us with an amazing opportunity for new businesses and products, designed explicitly for this section of the population," says Hilary Flynn of the Dublin-based Ageing Well Network, a charity which helped organise last week's conference.
Diet is just one example. Older people eat differently and look for certain vitamins which help fight ageing.
"Healthy eating is going to continue to grow, but in a different way, specifically aimed at older people," was how Senator Quinn put it.
"We all know how healthy eating and lifestyle changes can help prevent certain diseases. Successful products will be those that can boost the immune system over time, as well as offer quicker fixes. The grocery industry, like any business, will have to adapt."
Something that many businesses miss is the over-50s embrace of the Internet -- so-called Silver Surfers are among the most passionate Internet users and the number using social networking sites is growing steadily.
Just 2,500 Irish people over the age of 65, or 0.5pc of the country's Facebook subscribers, used the networking site Facebook in 2008 compared to 13,560, or 2.7pc, last year.
The challenge for business is to make sense of this diversity. Older people need products as diverse as wealth management, financial products that insure against the health and care costs of longevity, consumer goods such as cars that are self-parking, easy to get in and out of, new types of food with unusual additives and social networking sites such as Facebook.
"One of the hardest things about marketing to older people is the fact that they are such a diverse group.
"Someone in their 70s could be in bad health and have to have care while another could be running for the President of the United States.
"There are many shades of grey and I think this is an important message to be emphasised," says Senator Quinn, himself 74 years old. It maybe a difficult demographic to understand but it would seem to be time for more businesses to think in fresh ways about the opportunities the over-50s offer.