Data-driven insights that help companies navigate the changing retail and technology landscape. LEARN MORE
Deep Dives

The Silver Wave – Understanding The Aging Consumer

#
Coresight Research

Key Points

  • The population of silvers aged 65 and over will grow from 8% of the world’s population in 2015 to 13% in 2035, and will account for over one- third of total population growth through 2035, according to the United Nations’ (UN’s) Population Globally, this demographic is projected to grow more than 4.5 times faster than the nonsenior population over the next 20 years.
  • Worldwide, by 2035, Japan, South Korea, Western Europe, North America and China will see silvers account for the highest share of their total populations, with seniors comprising more than 20% of the total.
  • People aged 60 and older will drive more than 45% of consumption growth in North America and nearly 60% in Western Europe, Japan and South Korea over the next 15 years, according to McKinsey & Company.
  • Across the coming two decades, the 85-and-older age group will grow faster than the 65–84 age group, the UN This is significant because those at the younger end of the silver spectrum spend quite differently than their older counterparts do. This distinction is driven primarily by deterioration in health as people age, which creates a ripple effect in a number of areas.
Characteristics and Spending
  • Silver households tend to share five notable characteristics:
    • They have fewer occupants than average.
    • They enjoy greater (and increasing) net wealth than younger households.
    • More working households, as more seniors are continuing in the workforce past age 65.
    • In Western markets, a majority of them are now online.
    • They continue to lag the general population in terms of smartphone ownership, but they are catching up.
  • Per household, silvers spend less than the But this is skewed by their smaller average household sizes. In major Western economies, seniors tend to outspend the average consumer on a per-person basis.
  • Consumers aged 65–74 allocate a similar proportion of their overall spending to items such as clothing, transportation and dining out as the age group directly below them In other words, they are still spending about as much on discretionary goods and services as those in employment do.
  • Among consumers aged 75 and older, spending patterns are radically different: they spend proportionately more on basics such as housing and eating at home, and proportionately less on services such as dining out and transportation, as well as on discretionary categories such as apparel.
Impact on Industries
  • In the retail industry, we see silvers’ demand for convenience and their need for assistance contributing to a remolding of the retail landscape: we will see more smaller-format and local shops along with greater demand for home delivery via e-commerce.
  • Silvers tend to spend less on leisure services than other age groups do, except for travel, where 65–74-year-olds outspend average Moreover, baby boomers are already enthusiastic travelers, and they will carry their demand for vacations into retirement in the coming years.
  • In healthcare, we estimate that silvers accounted for around 17%, or $1.3 trillion, of global category spending in 2015 and that this figure will rise to around 26%, or $5.4 trillion, of global health spending in The cost pressures that healthcare places on governments and insurers mean that technology will play a major part in boosting productivity and, thus, keeping down costs. We see solutions emerging in health technology products, wearable tech and Internet-connected service providers.
  • Alongside healthcare, seniors’ need for assistance with everyday living presents another potential burden on public and domestic budgets Innovation will be needed here, too, to care for seniors more cost effectively. Marketplaces that operate like Uber and Airbnb, matching silver clients with service providers, can drive up productivity in home care and assisted living for older consumers.

Please Log In to read the full report. Not a member? Register for a free user account.

Other research you may be interested in:

×