Boomers, seniors spell health and wellness opportunity for store brands
U.S. baby boomers/seniors spent more than $200 billion across shopping channels in the last year alone, accounting for more than 50 percent of consumer packaged goods (CPG) spending, according to Information Resources Inc. (IRI), a Chicago-based market research firm. What's more, IRI expects the spending power associated with aging consumers to continue to grow, with the number of Americans aged 65 and older set to double during the next 25 years.
That spending power spells opportunity for both national brands and store brands. According to the latest IRI Times & Trends report, "Aging America: Carving out Growth in Mature Markets," health and wellness are important to boomers and seniors, but these consumers are investing in healthier living beyond prescription medicines and healthcare products to maximize long-term healthcare expenditures. As a result, "healthier for you" has emerged as a significant opportunity in-store.
"By 2020, annual CPG spending by boomers and seniors will surpass $230 billion. Healthcare-related spending represents a significant share of overall CPG spending for mature shoppers, so it is crucial for CPG marketers to focus on proactive wellness and disease state management to activate these shoppers," said Susan Viamari, editor of thought leadership for IRI. "With this type of spending on the table, even a fraction of one share point can easily translate into hundreds of millions of dollars."
Going forward, IRI said, retailers and manufacturers must continue to look across the store for opportunities to support and advance wellness-related efforts. And when it comes to their store brands, retailers will really need to key in to the wants and needs of their core shoppers — by store, not by banner — and develop products and messaging that address those wants and needs, Viamari told Store Brands.
"Opportunities can be maximized by taking a holistic approach to wellness," she said. "Prevention must be the first line of defense. Management is what happens when chronic disease/unwellness sets in."
Retailers that understand their shoppers' wellness goals will be able to organize the store layout, as well as in-store and outside-of-store promotional programs, around these opportunities, Viamari added. And store brand-related shopper messaging must take a balanced approach, going beyond both the package and the store, as 79 percent of consumers over the age of 55 are making purchase decisions before entering a store.
"That means retailers must be reaching out to start communicating with shoppers very early in the purchase process," she said. "Traditional media — circulars, coupons, etc. — are big influencers of decisions for older shoppers, but these shoppers are also leveraging new media. Smartphones are a daily 'tool' for these shoppers as well."
Finally, Viamari stated that retailers must find ways to be heard over all the "noise" in the marketplace related to new ingredients, "magic bullet" products and more.
"Older shoppers, in particular, are not interested in fads," she noted. "They want products that will work today and will work tomorrow. Retailers must help these shoppers understand why their products or their ingredients will work for their key consumers' most pressing needs."
To download the full report, visit www.iriworldwide.com/Insights/Publications/TimesTrends.aspx.