After years of focusing on younger consumers, retailers need to tailor their offer to the silver-shopper generation of older consumers if they want to take advantage of a lucrative growth opportunity.
According to new research from Verdict Consulting, part of the Datamonitor Group, UK consumers aged 65-74 will increase their retail expenditure by over 75 per cent across the next 10 years. This will make them the fastest growing age segment by some distance, although the over 75s will also see above average total spending growth. By 2017, the over 65s market will collectively be worth £64bn to UK retail compared to £39bn this year.
The research found that two main trends underpin the growing significance of the older consumer. First, the ageing UK population means that the number of 65-74s in the population will grow by 28 per cent over the next 10 years, and the over 75s will grow by 19 per cent. Second, 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 market segments will all see relatively low-key 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,” said Verdict director Neil Saunders. “That won’t be the case going forward as over the next 10 years, the over 45s will prove to be the engine of retail activity.”
But retailers risk missing out on this new trend. “Pitching to the older consumer has traditionally been seen as dull and if most retailers are honest, a bit boring,” said Saunders. “But over the next 10 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.”
The ageing of shoppers has important implications for retailers and shopping destinations which must adapt their propositions to meet the needs of older consumers. “Serving the older market will not be easy,’ said Saunders. “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.”
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