Massive returns are no grey area
The market is worth £120bn in the UK alone and they've survived the recession relatively unscathed, so companies will continue to target the over-50s market, writes John Cradden
Published 14/11/2013 | 21:30
FOR companies, the numbers are compelling and hard to ignore. The 'grey market' is said to be worth nearly £100bn in the UK, $2 trillion in the Asia-Pacific region, and well over $3tn in the US. If you consider also the evidence that older consumers have come through the recession relatively unscathed, and also that their numbers are set to increase dramatically in the next three decades, marketing to over-50s might seem like a no-brainer for many firms.
John Lowe, editor of 'Senior Times' magazine, which also operates the very popular Over-50s Shows that run every year Limerick, Cork, Kilkenny and Dublin's RDS, says the perception that older people have done well out of the recession is "probably true" mainly because, as a group, they don't have the same financial commitments as younger people.
"Most older people in their mid-50s onwards would have paid off their mortgage if they had one. They would have virtually no credit card debt and probably no debts of any description," he said.
"The only people that may have fared badly in that sense would be those who had tried to help out their siblings."
As the economy has contracted, a lot of companies have realised that because the market has shrunk, they have to target groups and areas where they know there are still possibilities for people buying goods or services, says Mr Lowe.
"They target older people simply because they assume, to a certain extent correctly, that they're the ones that have the disposable incomes.
"Most older people have done reasonably well. That's an over-generalisation as obviously there are cases of people who are struggling," he added.
Indeed, some organisations, such as Age and Opportunity and Age Action, are keen to dispel the perception that older people as a group are generally well-off.
While there are many wealthy older people, they say the majority are dependent on the state pension and research has found that many older people in Ireland financially support younger family members.
But even if the disposable incomes of older people are less than what marketers are claiming, there's no doubting the numbers.
In the next 30 years, CARDI (Centre for Aging Research and Development) estimates that 30pc of Ireland will be over 60.
And global population figures show that the number of men and women aged 60 and above has doubled since 1980 and is forecast to reach two billion by 2050.
At that time, nearly 400 million people will be aged 80 or older.
But whatever the underlying force behind it, the grey market is clearly there for the taking.
'Senior Times' magazine, which prints six times a year, has no less than 60,000 subscribers, while the Over-50s Shows, which have been running for 15 years, are doing a roaring trade.
"A lot of this goes under the radar," says Mr Lowe.
"The Over-50s Show is secondary in size to the Ideal Homes show in the RDS. If you ask anyone about the over-50s show who wasn't over 50, it's likely they would never have heard of it."
The show (and magazine) attracts companies in the healthcare, pharma and financial sectors, but travel companies are particularly well represented.
"Most people who come to the show are retired, so they can go on breaks at any time because they're not working, so they can avail of special offers," says Mr Lowe.
And most of these firms are not exactly Johnny-come-latelys to the over-50s market.
"There are companies that have been out there for years and years and years targeting the over-50s. For hotels around Ireland, in some ways it's a mini-industry now simply because they want to take up the slack in the off-peak clearance."
Dick Shroud, founder and CEO of 20plus30, a London-based consultancy that specialises in the 50-plus market, and author of the recently published book 'Marketing to the Older Consumer', agrees that certain sectors have traditionally made a bee-line for older consumers, such as finance companies, health and wellness product retailers and, of course, anti-ageing cosmetics.
"Having said all of that, I reckon that most of the major consumer brand companies have active programmes looking at how to respond to older consumers.
"Certainly, all of the main retailers are trying to get to grips with what they should do as the age of their customers increases and how the relative wealth of the young and the old change."
One good example is that car companies are reappraising their marketing strategies as less and less young people enter the car market, either because they cannot afford to or because there are other alternatives (like borrowing from their parents).
"There are some subtle changes in the way creative campaigns are constructed to make them age-neutral," says Mr Stroud. "Apple is a good example of a company that using good intergenerational imagery.
"However, if you look at the balance between the relative economic power of the older consumer and the amount of marketing resource that is targeted at capturing their expenditure, it is way off line."