Older consumers have cash to buy

As the woes of the global retail industry continue, and the slide towards ever slowing consumer spending deepens, we are beginning to see some rays of hope and opportunity emerge.

Although in general the sector is now trading at a point where retailing is more about damage limitation and controlled stock and inventory management than it ever was before, there are some retailers and marketers who (by luck or judgement) are trying to see the positives in all of this chaos.

Where once certain groups of shoppers and consumers would have never really been given a second thought, 12-18 months ago, they are now forming the backbone of new marketing and cash-cow opportunities.

One such example can be found from the recent experience of a children's toys website based in the US. The website was established and founded on the basis that wealthy, high-income parents who were short on time, could find toys and learning games for their children and have them delivered to their home. They expected that the majority of their business would come from younger consumers starting families. However, having recently undertaken a survey of their shoppers they have found that up to 40 per cent of their customers are grandparents.

With increasing numbers of similar examples being seen, this is not so much a needle in a haystack opportunity, but much more of a growing trend. Something which has really only started to take a foothold as the economic softening has deepened.

In fact as the recession grips tighter and the belt tightening of the consumers continues, there is now an increasing interest in marketing goods and services to those consumers aged 50 and older, with brands such as Chrysler, Kraft Foods, L'Oreal, P&G and Target are all aiming at the older demographic.

During the freewheeling earlier years, late 90s and the first half of this decade, the consumer and specifically retail markets were geared heavily towards the younger shoppers.

However, the focus has now changed with the emphasis now moving much more towards those older consumers, who with mortgages paid off and having no immediate dependents are more cash rich and are continuing to spend. The main reason in this shift of consumer focus is demographics.

The older, 55-60 years plus, consumers for the most part grew up in a period of change and as such are increasingly less resistant to change than the generations before them. As a result, not only are they receiving more attention from advertisers, but they are also reachable across all forms of media and advertising.

So with the younger generations somewhat cash-strapped for the foreseeable future, the only question which now remains is how long this trend of shifting consumer demographics will be and what the impact of this cyclical change will be over the long term.

The short term looks as if it will be dominated by a period of identifying niche market opportunities and exploiting them until market conditions gradually return back to a more normal pattern.

During that period although the 18-49 group will be the predominant buying demographic, there is no denying that the world's population is aging and these baby boomers will remain (for a year or so at least) the most attractive demographic for retailers seeking a safe return.

- The writer is Head of Retail Services, GRMC Advisory Services.