There is an overlooked multi-trillion dollar opportunity in consumer business, said BCG recently.
This overlooked multi-trillion dollar opportunity comes from the nearly one billion people worldwide who are 50 to 70 years old, according to a new BCG report titled Don’t Overlook Your Mature Consumers.
Mature consumers constitute a large and growing segment that is currently responsible for 27% of spending — around US$7 trillion — each year across nine product categories in 12 key markets, BCG pointed out.
Mature consumers are relatively resilient to economic shocks, buy high-quality products that they value, and exert considerable influence on younger consumers’ purchasing decisions. Nevertheless, brand marketeers often ignore them, the firm added.
The report is based on a survey of 870 million consumers in the 50-to-70-year-old age bracket across 12 markets that collectively account for almost half of the world’s population, said BCG.
The size of this consumer demographic will continue to increase over the next several decades, reaching almost 1.1 billion in 2050 across these countries — Brazil, China, France, Germany, India, Italy, Japan, Spain, Sweden, Thailand, the UK, and the US, the firm noted.
“Mature consumers are often ignored by brand marketing, largely because of a number of lingering misconceptions,” said Aparna Bharadwaj, a BCG managing director and partner who leads the firm’s Center for Customer Insight globally, and is a coauthor of the report. “They are perceived as being price sensitive and reliant on brick-and-mortar stores for their purchases. Nothing could be further from the truth. But marketers fail to recognise their role as trend setters and a multi-trillion dollar opportunity, and they struggle to engage them through conventional marketing techniques.”
- Mature consumers are active online, with 90% using social media platforms daily. Although they appreciate being able to engage live with sales agents, they also value the convenience of using online channels—sometimes even more than their younger counterparts do.
- In the US, for instance, 46% of mature consumers purchase apparel online, compared with only 36% of the younger demographic.
- Contrary to conventional wisdom, the 50-to-70-year-old consumer segment is much more likely to influence younger consumers than the other way around, across all product categories included in the study.
- This is especially true with regard to large-ticket items. About 36% of younger consumers reported being influenced by mature consumers in their vehicle purchases versus only 15% the other way around, and about 31% of younger consumers were influenced in their investment choices versus 15% the other way around.
- Within the 50- to-70-year-old age group, a concentrated 20% of top spenders, termed vibrant mature consumers, account for approximately 55% of the group’s total expenditures across the product categories included in the research.
- The category-specific numbers range from 50% of spending on vehicles and 54% on travel to 68% on investment products.
- Vibrant mature consumers tend to be happier, enjoy a more active lifestyle, and worry less about money than other mature consumers.