Advertisers on a quest to pin down boomers
Companies are having a hard time marketing directly to seniors. And that failure will cost them: In 2017, approaching half of the U.S. adult population will be 50 and older and they will control a full 70 percent of the disposable income.
Six years ago, the University of Cincinnati unveiled what it called an “unusual consortium” among its students, faculty and corporations, including Procter & Gamble, the consumer-product giant headquartered nearby. The group’s goal: to research and develop product ideas for consumers age 50 and over.
“The world has never before seen such a powerful market,” with about $3 trillion to spend in the U.S. alone, the school said then. The segment’s needs were “underserved,” requiring a shake-up of models to find the “sweet spot” between those needs and what was feasible to produce.
They’re still searching.
“This consumer segment is one of the more difficult ones to open up in terms of needs and wants,” said Matthew Doyle, 57, a 30-year P&G veteran who led the teams that invented Crest Whitestrips and is now vice president of the innovation lab, dubbed the Live Well Collaborative. “No one was designing products just for them.”
P&G and a dozen corporate partners like Boeing and Oreo cookie-maker Mondelez International have completed 37 projects, involving more than 50 university faculty and expert advisers, about 80 senior citizens who provide feedback, and over 500 students of design, architecture, engineering, business and nursing.
They’ve discovered that seniors treat their pets more like grandchildren than children, and spoil them accordingly. They’ve created biomechanical models of the human hand to understand how hard it is for arthritic consumers to open bottles of P&G’s Tide. And they’ve thought long and hard about how to ease Grandma’s journey through the airport.
What Live Well hasn’t done is commercialize a single product. They are all still looking for those sweet spots — the unmet and often unarticulated needs of older consumers, who for decades have been largely ignored by youth-obsessed marketers and product designers.
And that failure will cost them: In 2017, approaching half of the U.S. adult population will be 50 and older and they will control a full 70 percent of the disposable income, according to data tracker Nielsen.
Demographic trends abroad are even more pronounced: Globally, the spending power of consumers age 60 and older will hit $15 trillion by the end of this decade, up from $8 trillion in 2010, according to research from Euromonitor.
“What I see going on now is a tipping point — it’s all busting open,” said Ken Dychtwald, a gerontologist and author who runs a consultancy called Age Wave and has been studying seniors for 40 years. “Think of it as popcorn in the microwave. All of a sudden it starts to pop, and then things really start popping.”
Baby boomers, 8,000 of whom turn 65 each day in America, have reinvented each stage of life they’ve entered, from young adulthood to careers to parenting. And whether they’re working or retired, wealthy or on a fixed income, living alone or with other seniors, they aim to redefine what it means to be old.
Amazon.com noticed: In April, the world’s largest e-commerce company introduced a website dedicated to customers over 50, featuring hundreds of thousands of items from vitamins and blood-pressure monitors to skin-care products and books on traveling the world.
Alison Sander, who runs the Boston Consulting Group’s Center for Sensing & Mining the Future, a think tank, said only about 5 percent of her corporate clients really understand the nuances of the senior market. That helps explain why only about 15 percent of advertising dollars are spent on this demographic, despite accounting for almost half of consumer packaged-goods sales, according to Nielsen data.
“I have been in meetings where I ask Fortune 500 CEOs what they would do about this market, and often their minds jump to assisted-living devices for dementia or grab bars for showers,” Dychtwald said. “They don’t think of Lexus convertibles. They don’t think of Amazon. They should.”
By and large, investors don’t get it, either.
“It’s not on the radar screen for the venture community,” said Clayton Lewis, a partner at Maveron, a venture-capital firm co-founded by Starbucks founder Howard Schultz that invests in consumer-focused startups.
One company that understands that reality is Oxo, the New York-based maker of kitchen tools. A semiretired man named Sam Farber founded the company in 1990 after watching his wife, who had arthritis, struggle to peel an apple. Farber saw an opportunity to introduce kitchen gadgets that were both functional and easy-to-use, and the “Good Grips” range he developed has since won countless design awards and sells in 78 countries.
Oxo’s products are icons of what’s known as “universal design,” which holds that the best products appeal to people of all walks of life equally.
So there you have it: The company that does such a great job of making products for seniors takes great pains not to make products for seniors. That’s the paradox of the aging consumer, and it helps explain why P&G’s Live Well initiative hasn’t notched a dollar of sales yet.