In Asia, Marketers Pay Heed to a Growing Older Population
When Japan's baby boomers began retiring in 2007, sales in one particular category took a big jump. Not books or cruise packages or gardening tools. It was electric guitars.
This generation that grew up on rock "n' roll was healthier and more active than any group of retirees before them, and wielded significant disposable income. They wanted to pick up right where they left off when they entered the salaryman's world.
"When they retired they basically reformed the bands they were in at 22 ," said Dave McCaughan, Tokyo-based regional strategic planning director for McCann Worldgroup Asia Pacific. "If you take a typical 60-year-old retiree, what has he been doing the last 35 years? Basically he's been going to work-related events three nights a week that often end up at karaoke. He's just been rehearsing for performing in the band."
The story highlights an important lesson for marketers: don't underestimate the 50-plus set, a group that will have increasing importance as developed economies age. In Asia, home to large populations of older consumers -- in places such as Japan, South Korea, Taiwan, Singapore and Hong Kong -- marketers have found unique ways of tweaking their products or marketing to appeal to golden lifestyles.
Several years ago, electronics maker LG released its "Wine" phone, tailored for older folks with large buttons, easy-to-read text, a simple design and marketing that featured middle-aged models.
Wine was one of LG's top-selling handsets, but the company found that consumers started turning away from older feature phones once smartphones entered the Korean market. "What we've found is that in Korea, older customers don't want to look old. So they would rather use a young, trendy phone that their kids and grandchildren are using," said Ken Hong, LG's director-global communications. (However, it is worth noting that Japan's NTT Docomo has had good success with its Raku-Raku -- it means "easy"—phone, selling its 20 millionth unit this summer.)
"I think the bigger trend is that instead of only marketing to the silver segment, companies like LG are widening their target by promoting convenience and safety, which appeal strongly to an older population without closing the door on a younger segment who might be turned off by anything that is designed for only senior citizens," Mr. Hong said.
Some of those innovations include four-door refrigerators, designed so that users don't have to stoop all the way down to get frozen foods. Deep-freeze items go in the bottom drawer, while the more convenient top drawer is for frequently accessed foods ("Like ice cream!" as Mr. Hong suggests).
Other senior-friendly LG products include front-loading washing machines with higher profiles so there's less bending required, and a vacuum cleaner unveiled this year that automatically follows the user, instead of having to be dragged along like a conventional unit.
Japan, Korea and Hong Kong are being used as global test markets for aging strategies, Mr. McCaughan said, noting that many innovations can translate across markets.
"A lot of the big Western companies have known about the aging thing for a long time and sort of peripherally talked about it, but now they're becoming more active," he said. "The flow will be from North Asia to Europe and then to the U.S. because that 's where the demographic shift is ."
Japan, where nearly one-fourth of the population is over age 65, is the breeding ground of innovations. Beyond the size of the market, there's spending power to back up the numbers: the 50-plus segment in Japan represents roughly 80% of purchasing power, according to Jordan Price, senior-strategic planning partner at JWT Tokyo.
Product innovations include swiveling seats in cars, introduced by Toyota to make it easier to get in and out of the vehicle. A new shoe technology from Asahi is designed to help wearers maintain healthy knees and is being promoted via interactive displays in subways.
Retailers are also thinking creatively to meet older consumers' needs. Last year, media outlets reported that convenience store chain Family Mart was considering entering the funeral business. It's not a typo—nor is it unprecedented. In response to soaring costs that some Japanese families were struggling to meet, suburban retailer Aeon (which is similar to Walmart) provides funeral-arrangement services though a network of contracted vendors for as little as about $4,000.
"Through their scale, they can get better deals for people and better access," Mr. Price said.
And how about robots? Futuristic senior-friendly devices from Japan include a hair-washing robot from Panasonic, which makes a 3-D scan of the head and then uses its 16 fingers to shampoo and massage with just the right amount of pressure.
Then there's Paro the robotic baby seal, designed to meet companionship needs in nursing homes and hospitals. It's being used not only in Japan, but has wriggled its way into some nursing homes in Europe and North America.
But one observer says marketers are not doing nearly enough to appeal to the older consumers.
"Companies are so caught up in wanting to be young and hip and they're ignoring this issue that the seniors are going to be a force to be reckoned with. It's all going to happen in 10 years. I think most brands are not ready to face up to it," said Hari Ramanathan, regional strategy director for Y&R in Asia. "Brand owners are still not comfortable positioning themselves as brands and services for older people. ... An aging population does not mean the country starts to resemble a hospital ward."