Why the days of consumer segmentation by age are numbered

At first glance, one could be forgiven for thinking that the aim of an Expedia video spot by Hong Kong Secret Tour, shown above, is to attract greying consumers to the travel-booking site. But this is only half true. The senior cast members are also supposed to show that the Expedia site is so easy to navigate that even grannies can use it to book their holidays.

Advertising is an industry that fetishises youth, both in its workforce and its output. Millennials are so ‘now’ that they even have their own trending colour, millennial pink, yet one is hard pressed to find mainstream branding or campaigns that market to consumers who are 50 and above.

Mahmoud Salahy, director of direct-to-consumer for The North Face APAC, acknowledges that older audiences are often at the end of the spectrum for most of brands' marketing efforts. The outdoor sports apparel label has recently been remarketing itself as a youthful brand with an injection of new fashion elements, even though the older audience forms the core of the brand's consumer base, especially for its warm apparel line. “When we try to make our brand younger with new styles and the campaigns, in a way, we hope to make the older consumers feel younger as well,” says Salahy.

“A lot of times when clients say ‘we target all people’, what they actually mean is ‘we target all young people’,” says Jeanette Phang, executive director with OMD China. “If you are a chips product, does it really matter? Because everyone can enjoy chips.”

This bias exists in spite of the fact that many Asian countries are ageing rapidly. Japan is at the forefront, with a quarter of the population currently over 64. The World Bank predicts that Thailand will reach the same status by 2040, while China, the world’s biggest consumer market, will have 17.2 percent of its population above 60 by 2020.

The silver lining (pun intended) is that rising life expectancy means 60 is the new 40 for many of these baby boomers, who are meeting retirement equipped with increasingly good health, plump bank accounts and a strong desire to spend. Quoting data from the China National Resident Survey, OMD’s Modern Greys Rediscover Themselves report pinpoints that Chinese consumers aged 60 and above spent 370 percent more on travel in 2015 than the year before, based on analysis of monthly household expenses.

With the Asia Pacific Silver Economy Business Opportunities report projecting that APAC’s ageing market will reach US$3.3 trillion by 2020, it seems that older consumers, not millennials, are turning out to be the real spending powerhouse of the region, presenting a rosy outlook for the travel, leisure and food sectors, among others.

Source: Mintel China

Wake-up call

Kim Walker, CEO of Silver Group Consultancy, says the time has come for marketers to wake up and smell the demographic. “The irony is that everyone talks about the advantage of (older consumers) and the high-net-worth individuals from that demographic, and yet research companies and ad agencies don’t feel comfortable reaching out and would rather focus on millennials who are time-starved, income-deprived and facing huge challenges to buy their first homes.”

Phang agrees that agencies have a duty to educate clients about this audience segment and its potential—but thinks that ultimately it falls on clients “to be brave” and not do “the sexy thing” of going after millennials.

“The first thing that marketers should do is to challenge their own assumptions," she says. "If their immediate thought is that this group is ailing…always sick, you would never want to target them,” says Phang. “I don’t think focus groups can be of much help, it is just challenging your assumptions about who the old people are.”

Bhasker Jaiswal, managing partner for business intelligence at OMD China, also stresses that brands should not paint all older consumers with the same brush. “The data on older consumers usually stops after age 60," he says. "But we must know that consumers aged between 55 to 60 are not really the same as those aged 60 to 70.”

Meanwhile, McCann’s Truth About Age study, released in Tokyo this month, suggests that while the subject of ageing was previously thought to be relevant to the over-65 audience, it may in fact not be as relevant to this age group as to others. In Singapore, for instance, nearly half of the respondents who are under 30 said they constantly worry about growing older, compared to 36 percent of those aged above 50. In fact, 70 percent of over-50 Singaporeans said they feel positive about the idea of ageing. The study concludes that the days of consumer segmentation by age are numbered, and brands must rewrite the narrative if they want to connect with the ageing population as well as people of all age groups.

To explain this positive outlook towards ageing, Henry Shen, head of strategy at McCann Health Shanghai, says that changing values have opened up the minds of older consumers, encouraging them to try new things. “Not too long ago, older Chinese consumers used up their life savings to pay for a burial spot,” says Shen. “Now they are more eager to spend and enjoy a good life. They also no longer think it is necessary to have family reunions during Chinese New Year and instead travel during that period.”

Kim Walker

Non-digital natives

One of the biggest misconceptions about older consumers is that they are not digitally relevant, meaning digital marketing efforts around many of today’s consumer touchpoints—from live streaming and KOLs to e-commerce—seem to be slanting campaigns towards youth, says Stephen Chung, creative partner at Secret Tour Hong Kong (STHK).

From a physiological point of view, it is true that certain symptoms of ageing, such as failing eyesight, may impair the online experience of older consumers, says Walker. Pop-up ads and flashing colours that commonly appear with mobile apps could also be an issue, because older consumers may be less adept at cognitive filtering. “If people think of that when designing user interface and cut out the nonsense, then they would make it age-friendly,” says Walker.

Shen, meanwhile, brings up that some older consumers may be less nimble with their fingers, thus hampering text input on mobile screens. “Certain features such as chatbots can be helpful for older consumers because they like to be interactive, but that may not be the most effective since some of them have problems typing text on the screen," Shen says. "We have to find out their passion points and pain points."

Having said this, being age-friendly means more than making simple adjustments such as enlarging the text. “If you make it quite clear that this is a product, service or user experience that is specifically designed to meet the needs of the older person, you will lose them because no one likes to be patronised,” says Walker.

“To be ageless, you have to understand the differences, accommodate them, build in the differences in the user experience so they seem natural, and obviously it is going to appeal equally well to people of all ages.”

Taking Apple and Samsung as an example, for instance, Walker praises Apple for its uncluttered interface without animated menus and its age-inclusive strategy (Slice Intelligence data shows that men of 65 and older spent more on Apple products than any other demographic in the US between 2014 and 2015.) “[Apple] knows what they want the users to do [on the site], directs the users very clearly and seemlessly, and they know their products are beautiful so they use many images of the product shots. You can hardly see people in their promotional work,” says Walker. Clinique is another example of a brand that takes the products as the focus to avoid alienating consumers, he says.

In contrast, he has some harsh words for Samsung. “Samsung basically sticks the finger to older people and says ‘We are not interested in your money’…by using young talent and jargon in their advertising and music that tells older people they are not part of their brand world.”

Beyond the message, STHK’s Chung says that the channel marketers choose is also critical. “For a digitally centred campaign, marketers have to be aware that not all older consumers are on Facebook, they are more likely to be on WeChat,” says Chung.

Like many industry insiders, he also believes it is too early to strike off traditional media for older consumers. The Ipsos Global Business Influencers Survey, released last year, further affirmed the appeal of traditional media, with print and television getting the votes of 92.3 percent and 89.2 percent of the C-suite respondents, respectively. And good old newspapers can still be relied upon for mass reach. “It’s not always true that mainstream campaigns are biased towards youth. Older consumers like to cut out fast-food coupons from newspapers, so brands are still doing that,” says Chung.