Last December, RetailWire covered how Generation Z emerged as a significant economic force, with a global spending power of $450 billion, including $360 billion in the U.S. Their spending habits reflect careful consideration due to financial challenges like entry-level salaries and student debt.
Gen Z shoppers are highly informed and conduct extensive research before purchases, prioritizing quality over brand loyalty. They are quick to switch brands if products don’t meet their expectations. Sustainability is crucial to their buying decisions, as they prefer companies that demonstrate authenticity and environmental responsibility.
Although no age or generation demographic can be entirely monolithic, should there be another shift in how retailers think about targeting specific consumers?
The “silver economy” encompasses all economic activities, products, and services aimed at individuals over 50. Originating from Japan in the 1970s, this concept highlights diverse sectors such as health, banking, automotive, and tourism, specifically designed for the senior market.
Key characteristics of the silver economy consumers include high purchasing power and minimal financial burdens. They prioritize experiences like travel and leisure, maintain active lifestyles, and seek personalized products and services. This demographic values brand loyalty, consumes more than younger individuals, and enjoys cultural and leisure activities in their free time. Technological innovation, particularly in smart home technologies and eHealth, plays a crucial role in appealing to this market.
According to Rothschild & Co, the World Bank reported that global life expectancy rose from 65 in the early 1990s to 73 in 2020, driven by improvements in healthcare and nutrition. By 2030, the population aged 60 and above is expected to reach 1.4 billion across the globe, surpassing children under 10, thus creating opportunities in the silver economy. This demographic, also called Baby Boomers, represents the fastest-growing consumer group, with a combined net worth of around $70 trillion.
Rothschild & Co explained that “the 60-plus segment is expected to represent nearly 60% of consumption growth in Europe and Asia from 2015 to 2030, and nearly 50% in the North America, posing unprecedented economic opportunities and challenges for businesses.”
Companies like Estee Lauder and Nestlé are adapting their products to older consumers, such as the latter redesigning chocolate boxes and coffee jars to make them “easier to hold and open.” Investment opportunities are particularly strong in healthcare and audiology, with the hearing aids market expected to grow significantly. Overall, the silver economy presents diverse prospects for businesses targeting this expanding demographic.
For instance, China’s silver economy is receiving considerable attention due to the fact that the country “has the largest number of older people in the world with 216.8 million of its population aged 65 or above, and that number is set to increase to 400 million by 2050,” as reported by the UNFPA. This aging demographic is projected to drive the value of China’s silver economy from $750 billion in 2020 to $2.1 trillion by 2030, with the potential to reach $4.2 trillion, representing 10% of China’s GDP by 2035.
South Korea is also trying to take better advantage of this market. As the population aged 65 and older increases — expected to reach nearly 40% by 2050 — businesses are shifting their focus toward what Park Yeong-ran, a professor in the department of silver industry at Kangnam University, calls “an awareness of older people as active consumers.”
“Twenty years ago, companies were focused on providing care for dependent elderly people. Now the market is shifting toward catering to people who pursue their own new lifestyles in their elder years,” Park told Nikkei Asia. Key growth areas include vocational training for learning new skills, leisure activities like tourism, and sustainable products.
Furthermore, according to research from Porch Group Media, “Baby Boomers still have the most disposable income and account for almost 50% of retail sales. However, don’t think they should only be targeted through traditional media.” Boomers are very active online, with 85% researching products digitally. Immersion Active also reports that 66% of Americans over 50 regularly make purchases from online retailers, underscoring their comfort with e-commerce.