Retail in Japan

Turning silver into gold

Stealth marketing to the elderly

Jul 30th 2011 | TOKYO | from the print edition

After a lifetime of saving, it’s time to party

THE Ueshima coffee shops that dot Tokyo seem like any other chain. But look more closely: the aisles are wider, the chairs sturdier and the tables lower. The food is mostly mushy rather than crunchy: sandwiches, salads, bananas—nothing too hard to chew. Helpful staff carry items to customers’ tables. The name and menu are written in Japanese kanji rather than Western letters, in a large, easy-to-read font. It is no coincidence that Ueshima’s stores are filled with old people.

Ueshima never explicitly describes itself as a coffee shop for the elderly. But it targets them relentlessly—and stealthily. Stealthily, because the last thing septuagenarians want to hear is that their favourite coffee shop is a nursing home in disguise.

Japan is greying fast: already a fifth of its people are over 65. And the “silver generation” has gold to spare. The incomes of middle-class working folk have declined in the past decade, but seniors are sitting on a vast pile of savings. Almost a third of the nation’s household wealth, some ¥450 trillion ($5.8 trillion), is in the hands of those aged 70 and older (see chart). In the West, the elderly pinch pennies, but Japan’s seniors pay extra. At Ueshima a medium-sized coffee is ¥380, about 10% more than at Starbucks.

Many firms tailor their services to silver shoppers without letting on, explains a marketing specialist. Consider the Keio department store. On the outside, nothing warns you that it is a mecca for the mature. But inside there are chairs for weary shoppers. Signs are in large fonts. Many salespeople are in their 50s and 60s, since elderly customers trust such people more than whippersnappers. The food hall promotes good old-fashioned Japanese noodles more than newfangled foreign muck.

The shelves are lower, so older people can reach them. (Because of wartime food shortages, the elderly are much shorter than their juniors in Japan.) Loyalty cards at Keio award points not according to what you buy, but according to how often you visit. “Seniors have a lot of time on their hands,” the marketer explains.

Marketing to the elderly is tricky. The direct approach—say, calling your product “the soap for the over-70s”—does not work. And traditional advertising fails. “You can’t use TV adverts: they forget them,” groans the 30-something executive. “We show it again and again and again—and they still can’t recall it,” he sighs. Word-of-mouth is the only way.

Decades ago it was rarely profitable to market products to seniors, since by the time anyone had reached the age of 70 they probably had only a few years left to live. But Japanese people now live so long—life expectancy for women is 86; for men it is 80—that wooing them is lucrative.

Some firms try to hook them in their 60s, to build brand loyalty early. Others approach them via their children. One cosmetics firm pitches its wrinkle-removal cream to middle-aged women, in the hope that they will recommend it to their mothers. Filial piety comes in many forms.

Source

http://www.economist.com/node/21524920?fsrc=scn/tw/te/ar/turningsilverintogold