Why businesses should pay more attention to mature consumers
Mature consumers already account for more than a quarter of global spending. Image: REUTERS/Kim Kyung-Hoon
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- As society ages, businesses should be paying more attention to mature consumers.
- Mature consumers — those between 50 and 70 — are growing in number, buying power and influence.
- Deep-seated misconceptions and outdated assumptions have led many businesses to overlook this demographic.
As companies search for new markets and opportunities for growth, a neglected multi-trillion-dollar market sits right in front of them: the nearly billion consumers aged between 50 and 70. These mature consumers already account for more than a quarter of global spending.
This share is set to grow as ageing transforms the demographics of almost every major market, including those with relatively young populations. In a BCG study, we found that mature consumers spend over $7 trillion across just nine categories – the overall spend is a lot higher.
The mature consumers in the 12 markets studied – Brazil, China, France, Germany, India, Italy, Japan, Spain, Sweden, Thailand, the UK and the US – will number almost 1.1 billion by 2050. BCG’s survey of 18,000 consumers found that mature consumers have immense buying power, spend more than members of other age groups on individual purchases, exhibit strong brand loyalty, are resilient through economic ups and downs and wield surprising influence over younger consumers.
So why do companies overlook this important category of consumers? We found that leaders harbour myths about mature consumers, such as “They don’t spend as much as younger consumers”, “The young buy the opposite of what older consumers buy” or “Mature consumers are not as active online”.
However, our findings contradict such long-standing myths. Contrary to assumptions, more than 90% of mature consumers are active on social media. They gladly shop online, as well as in person. They cast a positive influence on younger consumers in most categories, especially for high-ticket items, such as automotive, alcohol and investment purchases.
Critically however, we found a disparity in the way mature versus younger consumers respond to marketing messages. Simply porting messages meant for the young won’t work for mature consumers.
Here are the five strategies for building markets with mature consumers:
- Identify and engage the “vibrant mature consumer”. The top 20% of mature consumers are happier, more active and less concerned about money than their peers; and account for 55% of spending across categories we looked at. Targeting this vibrant mature is an efficient way to address a high-value subset of the mature consumer market.
- Design-dedicated, omnichannel customer journeys. While mature customers appreciate a personalized approach that is often delivered by human interactions, they also like to shop online for the sheer convenience. For instance, we have talked to a consumer from China that likes to go to the store when shopping for apparel. Quality has become more important to her over the years, and to make the right decision, she says that the personal advice from sales staff is key for her. But once she made up her mind, she might then make the purchase online owing to the options available and convenience of home delivery.
- Be direct and personal in guiding purchasing decisions. Mature consumers are more sceptical of marketing messages than younger buyers when making their choices. They are also less influenced by “fear of missing out” or peer pressure, and make up their own minds individually. Personalized interactions, even through generative AI, can, therefore, build the trust that encourages a buying decision.
- Be honest and transparent in efforts to persuade mature consumers to trade up. Mature consumers can afford to spend more and are willing to spend on quality – but they’re also more discerning and harder to convince. Honest information directly delivered will win such customers.
- Rethink “market sizing” methodologies to account for the true value of mature consumers. Marketers often underestimate the value of mature consumers because they run smaller households and therefore appear to spend less at first glance. The flip side is that these consumers are more likely to buy higher ticket items per purchase. Also, once won, these mature consumers are more loyal than younger customers and more likely to influence younger generations. Brands will need to rethink how they measure the value of this segment, taking into account all these factors: ticket price, loyalty and influence. This needs a new way of thinking about the size of this market.
The good news is that brands don’t need to create sub-brands or new products to reach these consumers. They just need to get their brands in front of mature consumers in a way that appeals and engages. If they do, they can win loyal customers who will be lucrative for decades to come.
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