42 Degrees - Business from a different angle

The trouble with many older people these days is that they just don't act their age. Take art gallery owner Sam Bennett. The 63 year old is now on his third marriage and has just fathered twins. So he's in the market for a people carrier, fashionable clothes that will make him look younger – to please his new wife, and health products that will make him equal to the task of caring for his young family.

Meanwhile, his older brother Michael, 70 this year, is struggling with high blood pressure and weight gain caused by an arthritic hip. His fourth grandchild has just been born. So he's in the market for a convalescent cruise, comfortable clothing and some sort of savings plan so that he can contribute to the child's future wellbeing.

The key thing to remember when prospecting for gold from the silver market is to understand that senior citizens are not all the same, say marketing experts. "You used to be able to target people by age group and life stage. That is no longer true. Some 60 year olds act like 40 years olds, while others are more like 80 year olds," says Tom Rowley, associate director at strategic business consultancy Added Value.

They also have very different lifestyles. Some are empty nesters, hell bent on living for the present – so called SKIers (Spending the Kids' Inheritance). Others have grown-up children living at home – KIPPERS (Kids in Parents' Pockets Eroding Retirement Savings). Others, such as Sam Bennett, are just starting out afresh.

It is clear, however, that in the future there are going to be a lot more of them because as a nation we are getting older. In 2002, the average age of the UK population was 38. According to Government projections, the average age will be closer to 44 within 25 years.

However, the number of under-60s will remain more or less constant at around 47m. Nearly all the growth will come from the 60-plus age groups. Today, there are 12.7m people over 60. Within five years, that cohort will grow by more than ten per cent to 14m. And, by 2031, there will be 19m in this age group – a massive 40 per cent increase.

Much has been said and written about the problems of the 'demographic time bomb'. What we don't hear is the view of a growing number of marketing experts and forecasters – that our ageing population is not simply a problem, it is also a massive business opportunity. It has been estimated that the over-50s currently control three quarters of all disposable income. The question for business is how best to take advantage of this affluent and rapidly growing segment.

Despite the many differences, there are some recurring themes. The most obvious is the area of health. This is an opportunity for a huge range of industries, from food producers to property companies, says Rowley. But the diverse nature of older consumers means that they may well also throw up some decidedly counter-intuitive business opportunities.

"Functional foods [foods with medical benefits], such as calcium-enriched water that helps prevent osteoporosis, are going to be massive," says Rowley. Equally, with the number of very old (80 plus) set to grow by a fifth within ten years, the demand for nursing homes, sheltered housing, geriatric nursing, pharmaceuticals and domestic aids such as stair lifts and alarms is also set to explode.

But many of the new oldies will be in rude good health and will be determined to stay that way. So one less obvious avenue for exploration might be wellbeing for older people. "Many older people still play sports. But they may need special equipment to help reduce stress on ageing joints. There could be an opportunity for super-shock-absorbent trainers and there will be similar opportunities in finance, travel and recreation," says Rowley.

There will also be more subtle opportunities. "For instance, palates become less responsive, so food and drink for this market need to be stronger and more complex in flavour," says Rowley.

And, of course, tastes change. Older consumers tend to be less interested in fashion and more interested in style and quality. "Low-key design and sophisticated functionality are the order of the day for many older people," he adds.

But perhaps the biggest opportunity in marketing to the older generations is to appear not to be marketing to them at all, suggests Tamar Kasriel, head of knowledge venturing at forecasting company Henley.

This can open up markets based on small but unexpected variations on conventional products. Take the current success of hifi manufacturer Bose. Older consumers still love music and may even still be listening to rock and jazz. "Bose doesn't explicitly address older people. But its products are well put together, simply designed and happen to reproduce sound very well at the lower volume settings favoured by older listeners. They are the perfect way of giving older consumers what they want in this market," says Kasriel.

It's a similar story with the new Toyota Raum sedan. It is built and marketed just like most other cars on the market. "The slight difference is," says Kasriel, "that the driver's seat swivels out. This makes it far easier for an older person to get in. But Toyota has been very careful not to shout about it."

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