After years of focusing on younger consumers, retailers need to adapt their propositions to 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 three-quarters across the next ten 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 UK£64bn to UK retail compared to UK£39bn in 2007.
According to Verdict, 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% over the next ten years, the over 75s will grow by 19%.
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 age segments will all see relatively muted levels of spending growth. These trends will produce a step change in the consumer landscape.
Verdict Consulting Director Neil Saunders, said, “Historically, it was the younger consumer that drove retail growth.
“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.”
Total UK retail expenditure growth for each age segment as well as average spend per head figure from 2007 and 2017 and the growth rate over that period (UK)
| Age |
|Total retail expenditure growth (2007-17)||Average spend £ per head (2007)||Average spend £ per head (2017)||Spend per head growth (2007-17)|
Verdict believes that not all retailers are in a position to take advantage of this trend. Being focused 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.
Saunders said, “Pitching to the older consumer has traditionally been seen as dull and if most retailers are honest, a bit boring 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.
Average expenditure per head of UK consumers aged over 65 across selected retail categories (UK)
Average spend £ per head today of over 65s
|Average spend £ per head in ten years of over 65s|
|Music and video||23||30||+30%|
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.
Saunders concludes, “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.”
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