BUSINESS

POSTPONED PLEASURES

THE OVER-50s ARE SPENDING FREELY ON FUN, AND NOW THE MARKETPLACE IS BEGINNING TO TAKE NOTICE

PATRICIA CHISHOLM January 9 1989
BUSINESS

POSTPONED PLEASURES

THE OVER-50s ARE SPENDING FREELY ON FUN, AND NOW THE MARKETPLACE IS BEGINNING TO TAKE NOTICE

PATRICIA CHISHOLM January 9 1989

POSTPONED PLEASURES

BUSINESS

THE OVER-50s ARE SPENDING FREELY ON FUN, AND NOW THE MARKETPLACE IS BEGINNING TO TAKE NOTICE

When Margo Oborne opened her dress shop for older women in downtown Toronto last October, she was merely hoping to provide something that her handicapped mother had found elusive: a place to buy clothes that are easy to get into and out of, and that flatter an older figure. The dresses in her shop, Traditions, have no back zippers or tiny buttons to frustrate arthritic hands, and there are blouses cut to fit curving backs. But even Oborne has been surprised by the response. A growing number of older customers—average age about 60—who are affluent and prepared to pay for high-quality specialty items, are fuelling the rapid growth of her business. Indeed, such consumers are part of a burgeoning segment of society that now controls more than 50 per cent of Canada’s discretionary income: those 50 years of age and older. Said marketing consultant Leonard Kubas of Toronto-based Kubas Consultants: “Business is beginning to realize that these people may have grey hair, but they aren’t dead.”

On the contrary, Canadians over 50 are among the heaviest consumers of expensive lifestyle products. They travel widely and are

the leading purchasers of luxury con_

dominiums, large cars and such convenience appliances as microwave ovens. They are also living longer, healthier lives. In the past 12 years, the size of the over-50 group jumped by 26 per cent to the present level of 6.5 million—about one-third of the adult Canadian population. And their wealth is astonishing. As a group, Canadians over 50 control 80 per cent of the country’s total personal wealth.

They also are among the largest consumers of magazines and newspapers, and, indeed, their numbers and buying power help to support several Canadian publications specifically for those over 50, including Vancouverbased Maturity and Toronto-based Today’s Seniors. Another national English-language magazine is in the planning stages. The glossy, 80to 100page publication will be under the

direction of Montreal-based magazine owner Francine Tremblay, who launched a similar magazine in Quebec in 1987 called Le Bel Age.

The buying power of Canadians who are now over 50 has been building steadily for the past four decades. Most of the individuals in the group entered the workforce, bought homes and began a savings program during the long economic boom that followed the Second World War. Inflation has greatly increased the value of their homes, which most own outright.

As well, especially for those over 65, Depression era habits of saving have left them with significant pools of capital.

Statistics compiled by Toronto-based Market Facts of Canada Ltd. show that, on average, chequing accounts held by those over 65 in 1987 were 110 per cent larger than those of

other Canadians. People in their late middle age and older tend to be shrewd and careful shoppers, but—once convinced that a product or service fits their needs— they will pay high prices with little hesitation. Still, the majority of advertisers has failed to recognize this vast and growing pool of purchasing power. Said Ralph Hicks, president of Toronto-based Venture Brands, a management consulting firm: “Ninety-five per cent of advertising is directed at those under 50.” That situation often stems from stereotyping. Said Kubas: “The perception is that those over 50 are set in their ways, but that is wrong. In fact, those over 50 spend more time examining the benefits and drawbacks of a product than their children do.” Kubas says that most people also perceive themselves as being younger than they are, and often pursue the goals and activities associated with a younger age group. The over-50s do not perceive themselves as “old,” said Kubas. “It is the familiar adage: an old person is anyone 15 years older than you are.” One of the most common misconceptions is that those over 50 are excessively frugal, physically frail and afraid to leave the security of their own homes. According to Heather Davies, publisher of the Winnipeg weekly newspaper Seniors Today, 55 per cent of those over 50 travel two or more times a year, often by plane. PS Holidays, a Winnipeg travel agency, recently responded with a new line of threeand fourweek vacation packages—instead of the usual oneand two-week programs—called “Sunset Vacations.” The longer term appeals to retired Canadians with the time and money to travel for extended periods. Toronto resident Patrick O’Connor, 53, travels frequently to Las Vegas and Atlantic City to indulge his taste for gambling, and owns a Ford Mustang and a Dodge van. For O’Connor, spending money is part of enjoying life. Said O’Connor: “When you reach your 50s, you realize that life is short.”

There is almost no end to the variety of products and activities that appeal to the over-50s market. Mary Schmieder, editor of the 10-times-yearly Discovery magazine based in Colborne, Ont., said that second and third careers are common among older Canadians, who may purchase a retail business, begin writing fiction or journalism, or become consultants. They are also frequent buyers of products that, said Schmieder, “yuppies are perceived as buying.” Top-of-theline items, including Cadillac cars, recreational vehicles, high-definition stereo televisions and video cassette recorders are particularly popular, she said. “They have the time and the money. These people don’t blink twice when they plunk down $80,000 for an 80-foot recreational vehicle.”

Banks and other financial institutions are one of the few sectors that have long known about the purchasing power of older Canadians: according to statistics prepared for the Royal Bank of Canada, Canadians over 60 control more than 60 per cent of all bank deposits. Most banks offer special discounts for senior citizens, such as free chequing accounts. The Royal Bank has gone a step

further. Since 1984, it has been

using retired bank employees to promote the sale of registered retirement savings plans among its older customers. Known within the bank as “the Grey Panthers,” they visit potential investors in their homes. The Royal also maintains a “Seniors Centre” in one of its Toronto branches. It provides so-called sitdown banking in a screened-off area and highly personalized service to customers who are over 60. North Toronto area manager Peter Kuhlmann said that the bank is planning another new branch exclusively for those over 60.

In some ways, the great grey wave is just beginning. Toronto-based advertising agency Grey Canada predicts that by the year 2006— 10 years after the oldest of the baby boomers begin turning 50—there will be 9.5 million Canadians over the age of 50. And according to Michael Williams, vice-president of Torontobased consultants Compusearch Market and Social Research, “People who are seeing growth in this area now ain’t seen nothin’ yet.” When the bulge of baby boomers now in their mid-to late 30s turns 55, he added,“this whole market will explode.” And when that happens, the 50-plus market could well overwhelm all others. Age, at last, will be the rage.

PATRICIA CHISHOLM