The Old World Gets Olderby
Club Med has seen Europe's future, and it is gray. So the $1.4 billion French resort company is reaching out to an older, less hedonistic European. Some of the ploys: a "senior Olympics" for guests 50 and over and dances featuring music of the Fifties and early Sixties. Last May, the company even turned over its entire Marrakesh resort to older tourists who spent their weekend acting out Agatha Christie-style murder mysteries. Already, 50-plus guests now generate sales of $200 million a year--about 15% of overall revenue for the company.
Club M diterran e is not alone. Across Western Europe, savvy companies are realizing they must prepare for an age wave about to transform their markets. In the next quarter century, the 50-plus crowd will mushroom from 120 million to 165 million--triple the general growth rate--as the baby boom generation approaches retirement age. "We are not talking about an older customer niche--they'll be the mainstream," says Danielle Barr, director of Third Age Marketing, a London firm that advises on 50-plus marketing.
So European and American companies alike are rethinking their marketing and product design to attract these consumers and the money they spend freely. According to one trade group, the European Travel Commission, Europeans 55 and older made more than 200 million holiday trips of varying lengths last year--20% of the total travel market and growing. In Britain, research by pub operator Whitbread PLC indicates that Britons over 50 own 75% of the wealth and spend 21% more than the national average. Studies in Italy and France show similar trends. And even though European governments must soon reform their overloaded pension systems, these older citizens should still be the wealthiest generation in European history.
STILL LEARNING. Attitudinal and purchasing studies show these European consumers want fitness programs and long-term health care, sensible financial investments, and a chance to continue their education. They like to dine out and haven't lost much interest in romance or sex. And they don't warm up to the idea that they are over the hill. "These people feel 15 years younger than they are," advises Frankie Cadwell of Cadwell Davis & Partners, New York 50-plus consultants who are now working in Europe with ad agency Saatchi & Saatchi.
Of course, these young-thinking consumers do have to deal with the realities of aging, too. As a result, drugmaker Merck & Co., with its 80 million European customers, expects increased sales for its best-selling drug Renotec, which treats hypertension and guards against heart failure. And last fall, Levi Strauss & Co. staged the European launch of its Dockers line of roomier pants for older but wider waistlines.
Another reflection of the changing marketplace is that many of these aging Euros by now have paid off the mortgages on their homes. They love to spend time--and money--fixing them up. To attract these folk, B&Q PLC, Britain's leading do-it-yourself retailer, has set a goal of having 15% of its 15,000 employees be 50 or older. "We found they are more patient with older customers, who are key buyers," says Brian Hovell, the B&Q account executive with London ad agency BSB Dorland Ltd. Ads for B&Q, the $5.3 billion Kingfisher PLC's most profitable subsidiary, show the over-50 workers. And a special 10% Wednesdays-only discount for over-60 customers has turned the week's slowest day into a sales leader.
CD MAVENS. Whitbread's $800 million pubs-and-inns division has been deemphasizing its reliance on youth-oriented pubs and focusing on this cohort. So Whitbread is switching to more upscale units such as Mulligan's, a seafood restaurant chain, and Wayside Inns, which are located in rural areas. "Older people are put off by traditional pubs," says Marketing Director Michael Barnard, 41, who puts lots of his ads in such magazines as Good Housekeeping "that aren't likely to be read by lager louts."
Philips Electronics hopes older customers' interest in continuing education will boost sales of its new CD-I systems, a line of interactive compact disk players that plug into TV sets. To the surprise of Frans Speijer, CD-I marketing manager, customers over the age of 50 have bought about a quarter of all titles so far--50% more than he had expected.
One reason: Grandparents are buying Sesame Street and other titles for their grandchildren. And for themselves, they like the give-and-take nature of CD-I programs on how to garden or play golf. Philippe DeGroote, a grandfatherly Belgian who tried a Philips touch-screen CD-I at a Toys 'R' Us store in Charleroi, hadn't understood what CD-I was until he watched boys at play with it. Now, he says, "I might get one of those myself," figuring he might enjoy adult-education programs on it.
One challenge for European marketers is overturning the idea that targeting messages to older people somehow taints the product. That's a hard switch for advertising people, many of whom are under 35. Ad execs "perceive old age as the antechamber to death," says Jean-Paul Treguer, president of Paris ad agency MGTB Ayer, which recently set up a new unit, Senior Academy, to track 50-plusers.
The ad shops must change, though. Ayer research shows that 63% of 50-plus French citizens think current television advertising doesn't cater to their needs. And French companies have started to change. Danone is using vigorous French grandfathers in its current yogurt ad campaign. And the maker of Javel La Croix, a household cleaner, has cast older actress Denise Gray in its commercials.
Another hurdle is design. Products will have to be redesigned to deal with the dimmer eyesights, harder hearing, and slower reflexes of older customers. For example, at Philips Electronics, chief designer Stefano Marzano says glare-free color liquid-crystal displays will make it easier for all to read computer screens. But older consumers, he adds, are more affected by glare, so they will benefit most.
By consulting motorists and physicians specializing in geriatric medicine, researchers at Saab Auto have installed a "black panel" dashboard display in their 1994 900 model cars to block out all control readings except the speedometer. This innovation, designed to reduce confusion, is directed primarily at older drivers who are less responsive. Controls such as the fuel gauge light when a sensor shows they are needed. Meanwhile, Fokker, the Dutch maker of short-haul aircraft, is installing handrails on overhead compartments on selected models to help older passengers maneuver down aisles.
The future may be scary for those who have to deal with the millions of older and wiser customers heading their way. But terrific opportunities exist, not only for existing products but also for new ones: Philips, for example, is developing a shaver that will adapt to different skin types, including aging ones. Such smart thinking is bound to add new wrinkles to marketing plans throughout Europe.