Will retailers lose retiring boomers to experiences?
The latest generation of senior citizens, increasingly consisting of retiring boomers, is proving to be healthier and wealthier than their predecessors. Much like Millennials, however, seniors are gravitating towards spending on experiences rather than on material goods.
According to Fung Global Retail & Technology’s report, “The Silvers Series V: Leisure Services for Seniors,” seniors in the U.S., U.K. and Japan allocate a higher portion of their consumption expenditure to leisure than the average person does.
Seniors’ greater spending on events, dining out and travel is being driven by two key factors: increased mobility and money. While all three regions are showing gains in life expectancy, senior households in the U.S. saw significant increases in their average wealth and income from 2000 through 2013, outpacing growth among younger demographics. Senior tours, fitness programs and businesses geared toward social activities such as movie theaters, restaurants and those offering classes or supporting hobbies are expected to benefit from the trend.
Fung’s Managing Director Deborah Weinswig notes in a press release that retailers, service providers and vendors “must rethink the ways in which they promote their offerings, and maybe even widen their target audience.”
A prior Fung report, “The Silvers Series IV: Retail Reconfiguration for Seniors,” shows that older consumers may just have less material buying needs. Among categories, seniors over-index significantly in books and slightly in household supplies (such as cleaning products), but under-index significantly in the major categories of apparel/footwear and food at home.
But the report also points to a few ways stores are making shopping more of a social opportunity for seniors:
- Japan’s Aeon Mall, one of the first malls to specifically target maturing customers, offers about 140 leisure activities, such as hula dancing and calligraphy. Customers can also find companions through a “Begins Partner” program;
- British retailer Debenhams finds that older customers are the primary group that prefers coffee and hot food offerings. Sales from concessions are now substantially higher than those from women’s apparel.
- Senior Leisure Spending Increasingly to Focus on Travel and Fitness, Says New Fung Global Retail & Technology Report – Fung Global Retail & Technology
- The Silvers Series V – Leisure Services For Seniors – Fung Global Retail & Technology
- Retail Reconfiguration for Seniors – Fung Global Retail & Technology
DISCUSSION QUESTIONS: How are the needs and desires of retiring boomers altering sales opportunities for retailers? Should stores and malls be thinking of ways to make shopping more social to attract seniors?