Lessons in Marketing to the Silver Generation

August 18, 2011 | By More

One fifth of Japan's population are over 65. This is rapidly increasing.

Japan is greying fast – already a fifth of its population are over 65. While the incomes of the middle-class working family have declined in the past decade, the seniors still have their vast pile of savings stashed away, and in many cases, under their proverbial mattress.

So it makes sense to understand a little about how Japanese firms have adapted their marketing to target people whose life expectancy is now 80 for men and 86 for women.

Many firms there are finding it lucrative to target new 60 year old customers just to build brand loyalty for the next 20 years! One cosmetic firm even pitches its wrinkle-removal cream to middle-aged women, in the hope that they will recommend them to their mothers.

Source: National Institute of Population and Social Security Research, Ministry of Internal Affairs and Communication, Statistics Bureau

One important lesson learnt the hard way: “We can’t use TV adverts because the seniors forget,” sighs a 30-something advertising executive. “We show it again and again and again – and they still can’t recall it.” Word-of-mouth is the only way.

Many firms tailor their services to silver shoppers without letting on: marketing by stealth – the opposite of what business schools teach you for typical consumer markets. The Keio department store does not promote itself as a haven for seniors. But inside there are chairs for the weary shopper. Signs are in large text. Shelves are lower, so older people can reach them.

Japanese shopping assistants ready for store opening

The food hall promotes good old-fashioned Japanese noodles more than the new foreign stuff. Loyalty cards promote not how much you spend, but according to how often you visit. And when they do, they are often greeted and helped by many sales staff who are in the 50s and 60s – the elderly customers trust such people more.

Traditional advertising fails. Calling your product “the soap for over 70’s” does not work.

At the Ueshima coffee shop, also known as UCC (click here for its history), a chain that dots around Tokyo, a medium-sized coffee is 10% more pricy than Starbucks. While in the west the elderly needs to be thrifty, in Japan seniors over 70 holds almost a third of the nation’s wealth. The ‘silver generation’ there has gold to spare.

They may seem like normal coffee shops, but compared to other coffee shops, the aisles at Ueshima are wider, the chairs sturdier and the tables lower. The food is mostly mushy rather than crunchy or chewy – sandwiches, salads, bananas. The name and menu are written in traditional Japanese kanji in large, easy-to-read fonts. Helpful staff carry items to customers’ tables.

A typical UCC coffee shop in Tokyo

Like many other stores that target the elderly, Ueshima never explicitly describes itself as a coffee-shop for the aged. But they target them relentlessly – and stealthily. The last thing septuagenarians want to hear is that their favourite coffee shop is a nursing home in disguise. Dignity and respect holds high in that culture.

All these are lessons for the new entrepreneur targeting the emerging ‘silver generation’ elsewhere.  It’s not just about your product and/or service.  Department stores and coffee shops are merely some examples here where there are already a lot of competitors.

The important lesson here is about what your customer needs and why she wants to come again, and again.   As we write emphasis regularly, the key is in thoroughly understanding who your target customer is and what she really needs.

(Read more about: Understanding what your customer needs, and Finding out what they need.)

 

This posting is based on an article published by
The Economist, July 31 2011 issue:  Turning silver into gold

Other References:
Japan’s Silver Market Phenomenon
Article from The Telegraph, UK
About Japanese seniors

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About the Author ()

EngTong, pioneer and innovator. Graduated from Imperial College London with an MBA from Cranfield School of Management. Lived in Scotland, England, California, Beijing and led teams in Italy, France, Japan, Taiwan and Malaysia to do the impossible. Now based in Singapore and believes the future is to blend the sophistication of western management practices with the strength of Asian Values. Trained as a Chartered Engineer. Member of IET, Associate of City and Guilds and a certified SixSigma Champion.

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