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Saturday, July 4, 2009
The silver dollar
There is money to be made in the grey market, but it takes thought
WHEN Tokyo residents of a certain age want to go shopping, they head for Sugamo, in the north of the city. The main street, Jizo-dori, features a variety of shops selling food, sweets, medicaments, bits and bobs and, most notably, a huge choice of woolly underwear in bright red, a favourite colour with the elderly because it is thought to be lucky and health-giving. The local McDonald’s has a section with seats designed for older people, and a karaoke bar offers songs from the good old days. For spiritual refreshment, there is the four-centuries-old Kogan-ji Buddhist temple, where visitors buy incense and pray for a long life—and a quick and easy exit.
Jizo-dori has a long tradition, but businesses everywhere now realise that in future there will be a lot more older folk with money to spend. In most rich countries the baby-boomers born after the second world war were more numerous, better educated and better paid than any generation before them. When those boomers retire, they will want to do it in style, plastic surgery and all.
What else might they spend their money on? The glossy magazine published by America’s AARP, a powerful lobbying organisation for the over-50s that boasts 40m members, is bursting with ads. If those advertisers have got their market right—and they are paying big money for the older eyeballs—this group of customers can be persuaded to buy a plethora of products, from travel and financial services to mobile phones, medicines and comfy beds.
Some businesses are already adjusting their ranges to cater for the grey market. Volkswagen, for example, has developed a car called the Golf Plus that has higher seats and more space than the standard model. A number of consumer-goods makers have started making smaller pack sizes for older, smaller households.
Japan, which has already had lots of practice with older consumers, has developed some ingenious new products for the grandparent generation. They include a furry robot seal, sold as a pet substitute, that has proved a hit with lonely old folk. And makers of personal-care products recently put on a Tokyo fashion show for incontinence pads, featuring pink and frilly varieties instead of the dull old white sort.
This is a tricky market to tackle. Advertisers are often accused of trying too hard to sell to the young when much of the spending power is now concentrated in older age groups, but it is not a simple matter of moving “from rocking horse to rocking chair”. When companies try to cater for older customers, they do not always get it right. Attempts to “seniorise” ads, for example, have mostly drawn a poor response because their targets think of themselves as younger than they really are. That refusal to settle for being “old” will only get stronger as the baby-boomers start turning 65.
But the hardest thing about selling to older people is that they are such a heterogeneous group. Someone in his 70s may be in frail health and living in an old folks’ home; or he may be running for president of the United States, as John McCain did last year. There are many shades of grey.
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