Lucrative seniors market overlooked by CPG manufacturers and retailers?
An ageing population can no longer be ignored by the consumer packaged goods (CPG) sector, with a new approach needed to attract the lucrative market, according to a new series of reports from independent market analyst Datamonitor.
Traditionally, Young Adults have been the key target demographic, but marketers must adapt in order to maximise the huge potential of the Seniors market, their research found.
“The ageing of populations globally is an issue that will increasingly shape both society and its consumer markets,” Matthew Adams, Consumer Analyst at Datamonitor and co-author of the research, noted.
In demographic terms, Australia is a relatively mature region, with almost one third of its population accounted for by consumers aged 50 and above in 2007. And the Senior proportion of the population is forecast to continue growing between 2007 and 2012, from 1.6% to 33.6% by 2012. Growth will be slightly slower in New Zealand where Seniors will account for 29.6% of the population by 2012. Combined, this ensures that the Senior consumer will be particularly valuable across Oceania.
An important consideration for any marketer or brand targeting a given market is the potential market size and profitability. In addition to having the ability to spend, consumers must show a willingness to spend in order to make them lucrative targets. Seniors have many attributes in common with other age groups of consumers against universal criteria, such as seeking value for money. Younger consumers, however, are more concerned about image and finding their way in life, which gives them different priorities to Seniors.
With substantial assets and significant liquid capital, seniors are more likely to ‘upgrade’ and choose premium products, particularly those ’empty nesters’ who have less obligation to support the family and children. Consumers in their 50s and beyond have years of experience of consumption, enabling them to spot better quality products more easily. The recent ‘less is more’ philosophy might reinforce the pursuit of high quality products.
The ageing of the Baby Boomers is also a factor in turning toward a less materialistic approach to the luxury lifestyle. With increased consumer awareness of ‘sustainability’, many products made with natural ingredients cultivated organically, or sourced from specific origins, are becoming popular among these sophisticated shoppers. The appeal is not just related to the high quality image of such products, they also carry the perception of being ‘danger-free’ and benefit from the natural substances they contain.
And, when it comes to personal care products, price is the most important factor for Seniors overall but they are not necessarily seeking specials. Instead, they demand a transparent price with clear product benefits.
