With the spotlight on millennials, it’s easy to miss the fact that we’re getting older. Baby boomers are now approaching retirement age. This means almost a quarter of everybody on the planet will be over the age of 50 in 2017 – a record number. What’s more, the number of people aged over 60 will increase 56% globally by 2030, from 900 million in 2015 to more than 1.4 billion, according to the United Nations.
With any demographic shift comes new opportunities, and the ageing population is no exception. The phenomenon is creating market demand for new products and services at an unprecedented pace in Australia and globally. It even has a name: the “Longevity Economy”.
It’s time for manufacturers to turn their attention to the ageing population and accelerate innovation take advantage of the opportunities. Here’s how to innovate for an ageing world.
Getting to know older consumers
Let’s take a step back and examine the older consumers. As with any target market, you need to understand their behaviours and preferences if you want any chance appealing to them. In its latest report, TrendSights Analysis: Aging Populations, GlobalData highlights what you need to know about the older demographic:
- Less experimental and more loyal
Older people tend to be less experimental and more loyal – 36% say they would buy “established brands”. Brands with a reputation for quality and authenticity stand to gain. Focus on building their trust, and keeping it.
- Higher disposable income
Australians aged over 65 have higher levels of disposable income, on average, particularly compared with millennials. This is good news for premium brands, and those with capacity to offer a premium range.
- Desire for health and wellbeing
Older consumers tend to seek products offering health and wellness benefits. According to Global Data, 59% would “trust a product containing natural ingredients” and 30% would choose products offering “healthier, good-for-you ingredients”.
- Not your typical oldies
There’s also a whole other market within the older market: ‘midorexia’. This label refers to those middle-aged and older consumers who act younger than their years. It highlights how the “new” older consumers are disrupting and challenging preconceptions around the expectations, demands and behaviour of this demographic. Older generations are living and working for longer, prioritising wellness, and staying fit and active.
Armed with insights into this older demographic, how can you accelerate innovation to win their hearts and carts?
Rethink existing products
Review your range and look at how you can adapt existing products. For FMCG manufacturers, this could mean putting the spotlight on health and wellbeing by reducing the use of chemicals or boosting the use of natural ingredients – both of which would appeal to older consumers. Research also shows that 58% of consumers aged over 65 exercise at least once a week, which opens the door for sports drinks, energy bars and nutritional supplements. (Here are three lessons manufacturers can learn from award-winning health food.)
Look adding to your product range to specifically cater to the ageing population. Think like a niche brand; they focus on a particular market position, demographic, or unmet consumer need, and use a deep understanding of consumers’ needs and wants to fulfil it. What unmet needs could you satisfy for older consumers?
Sanitarium’s new cholesterol-reducing Weet-Bix is a great example. The product was launched off the back of research findings that 43% of consumers aged 45 and over are classified as “high risk “ for cholesterol issues. What’s more, the Heart Foundation has given its support to the product – a smart move to build trust among older consumers.
In China, the markets for calcium, ginseng, tonics and nutritive drinks have boomed as older consumers look for “natural” ways to manage their health. While in the USA, research shows consumers aged 55 and over are looking for dairy products with functional benefits. This means looking at products enriched with extra calcium for bone health, or protein to boost and maintain muscle – something John Doumani, managing director of Fonterra Australia, recognises as an opportunity.
It’s not only millennials who care for the environment; older consumers give a big tick to sustainable products too. Out of all generations surveyed by Asia Pulp & Paper (APP), baby boomers (39%) are more likely to select a product based on its overall environmental impact. Consider how you can combine higher-value aesthetics with a sustainable or recycled packaging option.
Use trust signals
Authenticity, trustworthiness and transparency are key for older consumers. When buying food, just over a third of this demographic rely on well-known, trusted brands, while the majority (87%) like to be able to view the on-pack information that displays the origins of the product, according to GlobalData. Look at how you are using your packaging and labelling to convey information. Could you be telling your brand story better? Are you providing enough information about where ingredients come from? Consider putting more emphasis on trust signals, such as endorsements by relevant health organisations, the Australia Made logo, and so on. (You may find this blog on how ‘Australian Made’ logo can give your business an advantage interesting.)
Get packaging basics right
Can older consumers read your packaging? If they can’t read what’s on the back of the pack, they generally won’t buy it. According to Nielsen, 47% of Australians say it is difficult to find product labels that are easy to read, and one in two have trouble locating packages that are easy to open. One in three cannot find foods that meet special nutritional diets or smaller portion-sized food packaging. That doesn’t mean you have to put everything in large fonts; rather, consider the key points for older consumers, make them clear. And using bolder, easier-to-read styles. These issues are not confined to specific age groups, so improving accessibility is a smart business move. (This blog looks at four essential factors to consider when packaging your product.)
Get the message right
Research reveals that those aged 50 and over feel excluded by brands, with only 4% feeling advertising is aimed at them. There’s an opportunity here to speak directly to this audience and make them feel special, without patronising or pigeon holing them. The trick is to avoid the “one size fits all” approach. Tailor your messaging to different markets and you’ll see results.
Go to where older consumers are
Consider the channels you are using to market your products. Don’t assume that older consumers aren’t tapping into social, mobile or online shopping. A recent report by the Commonwealth Bank says “pre-boomers” – the parents of baby boomers – are set to become the fastest-growing group of online shoppers. This group is expected to make up nearly 15% of online purchases over the next year – an 18% increase.
The Bottom Line
Opportunities await manufacturers that can recognise the evolving lifestyles of older consumers and change with them. To survive and thrive, you need to keep in step with this demographic march into a future. That doesn’t mean ignoring all other generations, but simply looking at how you can innovate to make the most of these new opportunities. For your own business longevity, it’s worthwhile looking at how to innovate for an ageing world.
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