Stock market volatility and reports of lost consumer confidence are the latest indicators feeding the anxieties about a global economic slow-down. If you listen to the pundits, you'll hear that 2015 is beginning with a "surprise slump" and a gloomy economic air.
But if better spending data and higher consumer confidence will satiate our economic anxieties, why not tap into the deep pockets of the "older consumer"? Even as retail goes strong -- with 2014 year-over-year sales and total holiday sales going up -- the media still bemoan the monthly figures (which mean very little). Indeed, the connections between retail and national economic health seem more interwoven than ever before.
So as the world's population ages at a transformational rate -- with lives extending, birthrates dropping, and the "bulge" of Baby Boomers passing into their 60s -- one must ask: What can retail and the consumer sector do to grow? With more old consumers than young, how can retailers think about growth in the decades ahead so that retail becomes a pillar of national and global economic growth?
These are large and complex questions, of course, but a useful framework would cover three areas: employees, products, and environments.
The pharmacy chain CVS built a strategy off an invaluable, but also very simple insight: older consumers both trust and identify with older employees. The value for a pharmacy is clear, as customers seek advice for medications and other therapies. But the reasoning goes well beyond pills and bandages. Would a 65-year-old rather buy a tablet, a leaf blower, or a luxury sedan from a peer or a Millennial?
This insight -- about how customers identify with employees -- is at the core of corporate diversity initiatives, which have traditionally focused on race, gender, and sexual orientation. These initiatives are, without question, the right thing to do -- but they are also sound business strategy. This is equally true with aging. Who better than a Boomer to sell things to a Boomer?
Furthermore, if retailers hire more older workers, the U.S. economy benefits magnificently. As Boomers age and begin to imagine what they do after 60, most are finding that the quit-work-and-play-Bingo model is both undesirable and unfeasible. More than ever, older Americans are yearning to stay involved and engaged, and the retail sector could become a new employer of choice. Such a development would be a win for business, for older Americans, and the national economy. To do so will also require a fresh look at what will keep that 1 billion healthier and more active, including such previously untapped areas as skin health. The recent innovation of Nestle Skin Health is a case in point that is just the beginning of a resurgence to spending and growth.
Just as aging Baby Boomers are looking for new ways to engage and stay active, they're also looking to buy new things -- things that are hip and enable a healthier, more active lifestyle. For retailers, the stakes couldn't be higher. Boomers spend roughly $230 billion on consumer packaged goods, roughly 55 percent of overall sales in the U.S. By 2017, Boomers will control 70 percent of disposable income. So why obsess over Millennials as the trendsetters?
One industry that really gets it is fashion. Once the exclusive preserve of the young and wrinkle-free, fashion retailers and designers have recognized that their consumer base is changing. Selfridges in London has launched a new campaign for older adults, even New York's sacred Fashion Week has gone gray. With more over 60 than under 14 in the near future, fashion has made the move early -- and others would be wise to follow.
Finally, retail can capture the opportunity of this demographic transformation by re-thinking the customer experience within the brick-and-mortar stores. To state the obvious, shopping is about all the things beyond the transaction, and retailers can differentiate themselves by tailoring their environments to the needs and wants of an older population.
Some stores -- like certain malls in Japan -- have taken big leaps, with age-friendly designs like brighter lights, electric carts, places to rest, etc. This is well and good, and it serves a certain segment of the population. Retailers would be wise to consider such changes.
But the "younger old" are not going to go for such heavy-handed amenities. The generation that brought Led Zeppelin and hula hoops are going to need a different approach. And so retailers must ask: How can this huge and wealthy demographic be catered to, subtly but also effectively?
All told, the retail sector is in an enviable position: it's on solid footing, and it has immense opportunity to grow further in 2015 and beyond. For the rest of us, this should be terrific news. Despite the doom and gloom on the front pages, retail can grow and spread its wealth throughout the rest of the economy.
A piece of advice to retail, which we have of course all heard from our own parents at some point: It's time to grow up.