After years of focusing on younger consumers, retailers need to adapt their propositions for the more mature shopper if they want to take advantage of a lucrative seam of growth. According to new research from Verdict Consulting, UK consumers aged 65-74 will increase their retail expenditure by over 75% over the next ten years, making them the fastest growing age segment by some distance.
By 2017, the over 65s market will collectively be worth GBP64 billion to UK retail, compared to GBP39 billion in 2007.
Older shoppers offer best growth prospects for retail
According to Verdict, two main trends underpin the growing significance of the older consumer. Firstly, the ageing UK population means that the number of 65-74s in the population will grow by 28% over the next ten years, while the over 75s will grow by 19%. Secondly, a shift in mindset will produce an older consumer with a younger outlook: one who will shop for a far wider variety of products and who will be much more avaricious in their buying habits than older consumers today.
Comparatively, the younger age segments will all see relatively muted levels of spending growth. These trends will produce a step change in the consumer landscape. "Historically, it was the younger consumer that drove retail growth," comments Verdict Consulting Director Neil Saunders. "That won't be the case going forward as over the next ten years, the over 45s will prove to be the engine of retail activity."
Keep young and beautiful through shopping
Verdict believes that not all retailers are in a position to take advantage of this trend. Maintaining a focus on younger consumers can be seen as more exciting, especially in fashion sectors. Developing a proposition for the older consumer is outside the traditional comfort zones of many retailers.
"Pitching to the older consumer has traditionally been seen as dull and if most retailers are honest, a bit boring," says Saunders. "But over the next ten years this just won't be the case. The older shopper of tomorrow is simply not the same person as the older shopper of today: the blue-rinse brigade is steadily being replaced by the evergreen shopper, those consumers who want to stay young both physically and emotionally."
This is reflected in the type of products older consumers of tomorrow will buy. There will be a boost in personal care expenditure as many try to stem the tide of ageing; clothing will also benefit as the next generation of mature shoppers will show a greater interest in fashion. More will also be technologically savvy, consuming electronics, music and video like never before.
Adapting to the changing market
The ageing of shoppers has important implications for retailers and shopping destinations, which must adapt their propositions to meet the needs of older consumers. Issues such as tenant mix, space apportionment, service levels and design will all need to take into account the requirements of these experienced shopper groups. But this will not necessarily be straightforward.
"Serving the older market will not be easy. People within this segment tend to be far more experienced consumers. With a lifetime of shopping behind them, they are much more demanding and discriminating in terms of what they want: as a service oriented group, retailers may need to incur additional costs to meet their needs," Saunders says.