Aging Consumers to Compel Retailers to Ride “The Silver Wave,” Says New Fung Global Retail & Technology Report
Store sizes and layouts must adapt to the changing needs of over-65 shoppers, writes Managing Director Deborah Weinswig
May 24, 2016
NEW YORK (May 24, 2016) – From the “me generation” to the “silver generation”: The developed world’s population is getting older while remaining surprisingly affluent, presenting unprecedented opportunities for retailers, says “The Silver Wave: Understanding the Aging Consumer,” a new report from Fung Global Retail & Technology.
Seniors aged 60 and older will drive more than 45 percent of consumption growth in North America and nearly 60 percent in Western Europe, Japan and South Korea. But retailers must adapt to these consumers’ changing wants and needs on both a macro and micro level, writes Deborah Weinswig, Managing Director of Fung Global Retail & Technology.
“In the retail industry, we see silvers’ demand for convenience and need for assistance contributing to a remolding of the retail landscape: we will see more smaller-format and local shops along with greater demand for home delivery via e-commerce,” she writes.
The number of people aged 65 and older will grow from 8 percent of the world’s population in 2015 to 13 percent in 2035, according to the United Nations. Perhaps more important, this demographic is projected to grow more than 4.5 times faster than the non-senior population over the next 25 years. This could be an exceptional opportunity, as older households today have a greater net worth than those headed by younger people, and more seniors remain in the workforce after 65.
One caveat: This group is not homogeneous, Weinswig observes. Those from 65 to 74 differ widely in their expenditures compared with the over 85s.
“These days, people in the younger silver set behave much like their younger selves. They are fairly healthy, many are still working and their attitudes have not changed yet,” Weinswig writes. “But by the time silvers turn 85, their health typically has deteriorated significantly, and their attitudes and spending habits reflect that change.”
This should favor convenience stores and local grocery stores, which cater better to the smaller households and appetites of older consumers than larger supermarkets.
“Demand for local convenience is likely to extend beyond the grocery sector. We expect growth in the silver population to boost demand for proximity shopping in health and beauty categories, and possibly filter through to other nonfood sectors such as household goods and apparel, too,” Weinswig adds. “So, we expect to see a rise in proximity retailing that specifically targets senior consumers, particularly in neighborhoods that are largely populated by seniors or that include senior housing communities.”
In addition to these structural changes, retailers will need to make smaller-scale adjustments to cater to aging customer bases. Seniors find reaching very high and very low shelves challenging, affecting store layouts. Packaging will need to be made easier to open and labels easier to read. They also prefer more stylish apparel choices than are currently available, the report notes.
Already, the Kaiser and Adeg grocery chains (based in Germany and Austria, respectively), are adjusting their prototypes by widening aisles, adding nonskid flooring and improving lighting, among other factors.
“These changes may not be very apparent to most shoppers, but are noticed and appreciated by those they are designed to help,” Weinswig says. “In the coming years, we are likely to see many other retailers make similar incremental changes to their stores in order to better serve the silver segment.”
The full report can be found here. Weinswig joined Fung Global Retail & Technology (formerly FBIC Group) in 2014 to offer her unique viewpoints on the disruptive technology trends and innovations that are reshaping the global retail industry. Other reports issued by Fung Global Retail & Technology include: “Big Food’s Health Kick,” “Dubai 101,” “US Furniture Market Report,” “Holiday 2015 Takeaways,” “Online Consignment Market,” “European C-Stores Report” and “Global Retail Loyalty Programs Report.” Fung Global Retail & Technology reports and analyses can be found at www.fbicroup.com and www.deborahweinswig.com.
About Fung Global Retail & Technology
The Fung Global Retail & Technology research team, based in New York, London and Hong Kong, is a think tank that follows emerging retail and tech trends, specializing in the ways retail and technology intersect, and building collaborative communities.
The team, led by Deborah Weinswig, former top Wall Street and retail tech analyst and startup advisor, publishes ongoing thematic and global market research on topics such as the Internet of Things, digital payments, omnichannel retail, luxury and fashion trends and disruptive technologies. More information can be found at www.fbicgroup.com.