Japan’s “parasite singles” flat line spend is causing problems

I am glad it is not just the older consumers who are given strange and in the case of Japan's “parasite singles”, a most unpleasant name.

Today’s FT has an article about this group who are defined as being unmarried women and men in their 20s and early 30s living with their parents with, up until now, lots of dosh to spend on themselves.

Nearly half of Japan's single men and women between the age of 20 and 34 live at home.

Not only are the demographics conspiring to reduce the spend of this group, their absolute numbers declined 5% in the past year, but also they are losing the yen to spend as a result of Japan’s endless period of economic stagnation.

The result of this that sales of those highly priced European-made handbags, shoes and watches are tumbling. Of course none of this should come as a shock for those Japanese marketers who understand basic economics and demographics. Dick Stroud

Amazing marketing successes in ageing Japan

Kim Walker’s blog has some fascinating examples of commercial successes that are a direct result of Japan’s rapidly ageing population. If you want a glimpse at the future of marketing then observe Japan.

On the whole, older people have amassed all of the 'stuff ' they want/require and are looking for a different type of satisfaction. An opinion poll conducted by the Cabinet Office found that 44% of people in their 20s are seeking material wealth, in sharp contrast with 66% of seniors in their 60s searching for mental happiness.

Here are two of examples that Kim has collected together.

Tokyo Disney Resort has seen visitors aged 40+ grow from 2.8% of revenues in 2003 to 18% in 2008. It is not surprising that the company has started selling a special Wednesdays-only pass for the parks for people aged 45 and older

Middle-aged and elderly people accounted for 54.5% of Japanese overseas travellers last year, an increase of around 9% from 10 years earlier. JTB Corp. established a subsidiary specializing in senior travel in 2005, and sales skyrocketed 190% last fiscal year compared to 2006.

There are many examples that illustrate what happens when you live in the fast ageing country on the planet. Dick Stroud

Luxury experiences not luxury stuff

Some new research has just been published by McKinsey about the decline in Japanese consumer’s seemingly insatiable appetite for luxury goods. Sorry, the article is subscription only.

Just look at the graphic showing the responses, by age, to the statement: “I prefer spending money on luxury experiences rather than buying luxury accessories, handbags, or apparel."

The over-55s is the group most likely to agree with this statement. Travel seems to be the main beneficiary of this shift from stuff to experiences.

I thought these were a couple of interesting quotes from the article.

The manager of a leading luxury hotel in Tokyo told us that the vast majority of his guests are Japanese, including many Tokyo residents: “A large part of our customer base is 35- to 55-year-old ladies with money, so we are going after the same wallets as the luxury manufacturers are.”

Meanwhile, luxury goods are losing their lustre. Across demographic groups, one-third of all consumers—and as many as 43 percent of those 55 or older—agreed that “owning luxury goods is not as special as it used to be.” Only 32 percent of the respondents said they were “very” or “somewhat” interested in luxury products, compared with 51 percent in the same survey in 2004.

I reckon this is a universal trend that isn’t going away, anytime soon. Companies had better get to understand what it means to their business. Dick Stroud

Stories about ageing around the world

This is not really a blog posting about marketing but it does provide an insight into the mind of older people around the globe. The BBC’s World Service had an excellent series of interviews about different aspects of ageing; some sad, some liberating.

I didn’t know there is a Danish organisation called DaneAge that has approximately 542,000 members (27% of all Danes aged 50+). That is incredible.

I had never heard of the Gray Panthers and the Granny Peace Brigade. From a quick look at their web sites and listening to their spokesperson, they sound very worthy groups with their origins, I suspect, back in the early days of the 1960s and that went with that.

The saddest and most surprising item is about Japan. It appears that some older people have been left feeling isolated, unwanted and impoverished and as a result crime rates among the older generation is increasing. Last year more than 31,000 elderly people were convicted of theft. There has been a five fold increase in over-65s crime even though the older population has only doubled.

40% of older people live alone and 53% say they have no friends. Taking goods from their local supermarket is thought to give them an opportunity to talk to somebody, even the security guard. In most instances they given a warning and not prosecuted.

The next time somebody tells you that the East is nothing like the West, because of the way it reveres the old you can tell them about this story. Dick Stroud

More lessons from Japan

The FT (subscription) continues its great series of article about Japan’s ageing population and the lessons that we might learn. Of course there may be no lessons since Japanese society is so radically different from the UK and US that trying to extrapolate is a worthless exercise. Here are a few points:

A lot of talk about Leon, a magazine targeting the older male. Actually it appears to be aiming at guys in their late 30s to late 40s. It is doing well enough to have just launched in China.

A local ‘me’ (i.e. somebody who pontificates on the older market) says: “As people get older, their tastes and needs become more similar.” Is this true in the West? What evidence is there that it is true in Japan?

The cosmetic industry seems to one of the few industries that have been successful at benefiting from Japan’s ageing population – so far. Kanebo (a Japanese cosmetics company) generates more than Y10bn a year in sales of its Evita line for 50-plus women and is now moving on to the 60-plus.

The real estate boom that was expect as retired people exited big cities to move to the country has not happened. The local ‘me’ says: “It’s usually the wife who objects. The husband might want to spend his retirement working in a field back home, but the wife usually likes the convenience of the city.” The result has been for a higher premium on urban condominiums within an easy walk of train stations, and ever falling prices for rural retreats.

And so on …. If you get a chance it is worth reading. Dick Stroud

The greying of Mickey Mouse

A short supply of kids but a plentiful supply of oldies means if you are Walt Disney you need to take some drastic action.

With Japan's birthrate in decline, Disney has accepted the stark economics of the new market: the largest group of customers with the money and the time to spend a day on Splash Mountain or Pooh's Hunny Hunt is mostly retired.

To entice this burgeoning segment of society on to the rides the company is offering a cut-price season ticket for the over-60s and has made older people the park's new “core target”.

This got me to thinking of what other kids products might be re-positioned for their grandparents. Baby buggies morph into wheelchairs? I wonder what the makers of Barbie Dolls will do? Dick Stroud

Savings company believes we should save more - Wow

According to ‘research’ (GFK NOP), the median sum of savings and investments accumulated by people in the UK aged 50 years old is £7,179. That is a scary number, a very scary number.

On the back of this data the head of savings at Abbey, said: "Although the over 50s have been one of the most successful generations, many people need to save more to achieve a good retirement"?

So what did Abbey do to help out: "We launched our 50+ Saver account to reward those over 50 who want to save more."

It is great to know that the UK has such concerned financial services companies.

The serious point to this item is the huge disparity in savings (as distinct to property) wealth amongst the UK’s 50-plus. Dick Stroud

What will happen to all the dankai no sedai’s cash?

A good question.

I bet you didn't know that the Japanese for Baby Boomer is dankai no sedai.

This article is written by an American and looks at what life holds in store for the dankai no sedai and how companies might encourage them to part with their hard earned dosh. Dick Stroud