The Best Ager market is booming. But why?
As a mail retailer of high-quality fashion, we are bang on trend. Mail order is booming. This was confirmed by the results of the Infratest study “Interactive Retail in Germany 2015”, commissioned by the German E-Commerce and Distance Selling Trade Association (bvh). The development of interactive retail, which includes catalogue retail as well as e-commerce, was the subject of the study. Taken together, both channels had turnover of 52.37 billion euros in 2015. That is 11.7 percent of the retail sector as a whole. Fashion, with 12.12 billion euros, generated the biggest share of the total turnover – numbers that speak for themselves.
Customer approach on more than one channel works best: Multichannel companies grew by 27% in 2015 (2014: 11,309 million euros; 2015: 13,976 million euros). Especially clothes and furniture were purchased via multichannel commerce. (Source: German E-Commerce and Distance Selling Trade Association (bvh): Interactive Retail in Germany 2015).
In Germany in recent years, the number of Best Agers increased to 16.7 million, and this number continues to grow. By the year 2030, some 22.3 million people will be 65 or older. The reason for this development? The vast number of people that were born in the years after World War II – the baby boom generation – are now reaching retirement age. At the same time, the size of the overall population is shrinking. The result is that, in 20 years’ time, more than every third person in Germany will be a Best Ager. Increased life expectancy is enforcing the trend: The life expectancy of women today is 82.5 years, by 2060 it is likely to be 91 years.
With our fashions, we’ve firmly established ourselves today on tomorrow’s market. But Best Agers are exciting customers for us for another reason as well: They trust the brands they’ve already chosen and are extremely loyal. Through our quality and service, we have won over a target group that we can continue to build on – both today and in the future.
Best Agers currently have an average net household income of 2,200 euros a month. For women living alone, that figure is 1,600 euros, according to a study by the Allensbach Institute. The 50-plus generation only saves 3 to 4 percent of that income; they spend the rest. That makes Best Agers twice as eager to consume than the younger generations. On average, German households save 11 percent of their income. It’s no surprise then, that in Germany, every third euro is spent by a senior citizen. By the year 2050, our target group will be contributing 41 percent to total expenditure – the equivalent of 386 billion euros. In short, independently of fashion and trends, the purchasing power of Best Agers will increase year for year from the above-average level today.
Germany’s demographic change is a fact to which the lifestyle branch must adapt. We have already done so. The best evidence of that is our expansive portfolio covering all the market segments.
Public awareness is being trained more and more on our target group. At fashion shows, too, models from the 45-plus generation are increasingly in demand. Most recently, Carmen Dell’Orefice created a sensation at New York Fashion Week. The 84-year-old enchanted the audience with her glamorous appearance on the catwalk. Luxury labels such as Rolex and Jean Paul Gaultier are now competing for her attention. 60’s model Twiggy is also back in business; since 2016 she is the brand ambassador of L'Oréal. The success that these two models and others like them are enjoying shows just how big the current demand is for so-called “silver models”.
The fact that more and more lifestyle labels are focusing on Best Agers shows that they’ve understood the trend towards demographic change. Those who don’t cater to the 50-plus generation are ignoring the enormous potential of a target group that will only become more significant with time. But there’s another reason as well. In times when faces and bodies can be retouched to perfection with the help of a computer, women whose faces and bodies reflect their life experiences and their personalities are suddenly interesting again. Strong characters have to mature – in real life, not on a computer monitor. Our customers are the best examples of that.