Dear Colleagues,

Interesting article from The Economist

http://www.economist.com/business/displayStory.cfm?story_id=1270771.

Note the last section on Design for all.

Best regards,

Ken Friedman



Marketing to the old

Over 60 and overlooked

Aug 8th 2002
From The Economist print edition

Everyone knows the world is ageing. So why is business doing so
little about it?

IN THE next few decades, the "baby boomers", the large generation
born in the 1950s and 1960s, will grow old. As they do, their sheer
numbers and their different attitude to age will create new markets
in the world's rich countries. Yet business remains largely obsessed
with youth. Many companies seem blind to the fact that their
customers are greying. Some have started, with uneven success, to
market and advertise to an older population and to design products
and services that meet its special needs. Few, though, see the
elderly as an exciting group to sell to.

In industrialised countries, the over-60s already account for 20% of
the population-compared with less than 12% in 1950. By 2050 that
proportion is expected to rise, on average, to a third, reaching over
two-fifths in Japan (see chart 1). However, companies still spend 95%
of their marketing and advertising budgets on the under-50s. Many
businesses have not yet shed the outdated view that the mature market
is made up of stingy old-timers set in their ways. Unless you are in
the business of prescription drugs or retirement homes, the argument
goes, why bother?

One good reason is that the old are wealthier and healthier than
ever, and the self-indulgent baby-boomer generation in particular is
determined to enjoy itself to the end (see chart 2). According to the
United States Census Bureau, the poverty rate among Americans over 65
has dropped from 35% in 1960 to 10.2% today, compared with a fall
from 22% to 11.3% for the population as a whole. Senioragency
International, a consultancy specialising in marketing to the
elderly, says that the over-50s own three-quarters of all financial
assets and account for half of all discretionary spending power in
developed countries. Over two-thirds of them own their own homes,
three-quarters of which are unencumbered by a mortgage. In America,
they control four-fifths of the money invested in savings-and-loan
associations and own two-thirds of all the shares on the stockmarket.

Not only are the elderly wealthier, they are also healthier and have
more time to spend their money. A few decades ago, most people had
only a few years to live by the time they retired. Most workers
retiring today can look forward to 15-20 years of free time and,
thanks to medical advances and healthier living, remain active for
most of it.

Free time and health, combined with relative financial comfort and a
greater readiness for self-indulgence, are creating a mature market
eager to consume and explore. Over the past two decades, consumption
by the over-50s in Europe has increased three times as fast as that
by the rest of the population. In industrialised countries, people
over 50 buy about half of all new cars and have a weakness for the
top end of the range. Even Harley Davidson, the maker of the
legendary motorbike, cannot escape the age wave. Long gone are the
days of young easy riders: the average age of its customers today is
52.

A marketing challenge

Getting to know long-ignored older customers, however, is hard work
for marketing youngsters who are used to lumping all people over the
age of 60 into a grey basket of frailty, tweed and stinginess.
Advertising's creative types, the people who dream up commercials,
are considered ancient by the time they are 35. Finding the right way
to communicate with an older audience is a challenge for them.

Many advertisements still caricature older people in order to make
younger audiences laugh-as in the soft-drinks advertisement that
portrays an adolescent using his grandfather's trembling hand to
shake his can. Yet the over-50s make up the largest share of TV
audiences, spending 30-40% more time in front of their boxes than the
rest of the population.

Jean-Paul Tréguer, the French founder of Senioragency International
and author of "50+ Marketing" (Palgrave, 2002), says that not so long
ago European company executives would laugh when he tried to convince
them that they should pay more attention to older consumers. Now, he
says, everybody is talking about them, but no one knows what to do.

America is a few years ahead and has developed a better understanding
of the nuances of marketing to the old. The Centre for Mature
Consumer Studies at Georgia State University, for example, segments
the elderly into four groups-"healthy hermits", "ailing outgoers",
"healthy indulgers" and "frail reclusives".

Ken Dychtwald, author of "Age Power: How the 21st Century will be
Ruled by the New Old" (Putnam, 1999), prefers to segment them
according to stages in their life-tracking people as they become, for
example, empty-nesters and grandparents, or (sometimes) single again.
Travel companies such as Grandtravel and FamilyHostel have followed
that road with packages for older travellers and their grandchildren.

Better segmentation, however, does not mean that marketing
departments always get it right. When Gerber, a maker of baby food,
realised that many older consumers with dental and stomach problems
were buying its products for their own use, it decided to launch a
line of similar food called Senior Citizen. Ageing shoppers, however,
had no appetite for showing up at the cash register with purees
designed for the elderly, and the product was withdrawn.

The most successful advertising campaigns targeted at mature
consumers focus instead on active and healthy lifestyles and
introduce positive role models. Rejuvenated patients cycling with
their grandchildren or practising tai chi are far more effective than
the stereotype of a frail arthritis sufferer.

Even the youth-obsessed cosmetics industry-Lancome once ditched
Isabella Rossellini as its model because she was considered too old
at 42-is getting better at portraying women over 50. Since such women
make up more than half the market for face cream in developed
countries, that is a wise move. Last year L'Oreal recruited the then
57-year-old French actress Catherine Deneuve to promote its hair-care
products, while Estée Lauder asked Karen Graham, its star model in
the 1970s, to be the face for a new cream for the mature market.

It is not all about image and communication, however. Products and
services also need to suit older consumers. Some companies are
catching up with the need to adapt to older users-the food industry
in particular. Unilever's margarine products were in decline until it
launched its Proactiv spread, which reduces cholesterol. The
advertising campaign focused on happy consumers-mostly over
50-attesting to their lower cholesterol levels. According to Jean
Marc Liduena of Unilever Bestfoods Europe, the success of Proactiv
was responsible for turning round Unilever's margarine division.

Packaging and design are also slowly adapting to the mature market.
When Danone, a food and beverage giant, decided to target older
consumers with its new calcium-rich Talians mineral water, it made
sure that customers would have no problems with the bottle. The label
was designed to be clear and readable, while its larger and easy-grip
cap is simpler for arthritic hands to open.

Design for all

A similar approach has been adopted by other industries as well. Once
it had identified the older population as a promising growth market,
NTT DoCoMo, a Japanese telecoms company, launched a new mobile phone.
Called Raku-Raku, or "easy-easy", it has a panel with larger buttons
and easier-to-read figures. After its launch last September, over
200,000 units were sold in less than two months.

Products and services adapted to older customers often benefit
everybody. Three years ago RATP, the Paris public-transport network,
asked its older passengers what they disliked most. The metro map
layout came high up their list. So the RATP introduced 150,000 copies
of a simplified and more readable map, originally supposed to
co-exist with the old one. But its instant success with all
passengers-old and young alike-led to the old map being replaced by
the revised one.

Mr Tréguer argues that designing for the young excludes the old,
while designing for the old includes everybody. With its population
of over-60s reaching almost 25%, Japan has been at the forefront of a
trend to create so-called "universal-design products"-products that
can be used by anyone, regardless of age and ability. In 1999,
members from 17 industrial associations created the Kyoyo-Hin
foundation-the foundation for universal products-and in 1998 the
Japanese government proposed to the International Organisation for
Standardisation a new global standard for products and services
accessible to people of all ages. New guidelines were published last
November.

The approach has worked for Fiskars, an American company: its "soft
touch" scissors, which operate like secateurs and are therefore
easier to use, but are also modern-looking, have been a hit with
people of all ages in America. The same goes for Oxo's
arthritis-friendly, contemporary-looking range of cooking utensils.

To help young designers to understand older users' limitations, Age
Concern, a British non-profit organisation, has developed a "through
other eyes" training programme for retailers. It tries to simulate
the physical limitations that older customers experience when
shopping. Ford, a car maker, has come up with something called "the
third-age suit" to help its design engineers-most of whom are under
40-grasp the needs of ageing drivers. The outfit adds about 30 years
to the wearer's age by stiffening the knees, elbows, ankles and
wrists. It also adds material at the waist-a rotund stomach affects
people's ability to sit easily-and it has gloves that reduce the
sense of touch. Ford's lucky designers also have to wear yellow
scratched goggles to find out what it is like to have cataracts.

The exercise has been fruitful. Thanks to the third-age suit, the
company's cars are now easier for everyone to get into and out of;
their seat belts are more comfortable to wear; glare has been
reduced; and the controls are more readable and reachable.

Such initiatives, however, remain the exception rather than the rule.
Despite the prevalence of grey hair in boardrooms, companies are only
just waking up to the impact that shifting demographics will have on
consumption. The vast majority of them are ill prepared for a
transformation that, as Mr Dychtwald puts it, will turn a world
focused on the young into a gerontocracy.