Move over 50+, it’s the 60+ in Japan who are flexing their spending muscles. According to an article in the Nikkei, Japanese aged 60-70 are emerging as an important source of economic vitality, as they are proving to be active spenders keen on making the most of their post-retirement years. Most of the 18 million sixtysomethings — the country’s largest age group — are still in good health and eager to pursue various activities for a better quality of life. Only 20% of Japanese around 70 have health problems that affect their daily lives.
Data clearly shows that older consumers are more eager to spend than those younger than them. In 2009, consumption by people age 60 or older grew 1.2% from the previous year despite the economic slump. But spending by people under 30 plunged 7.3% amid anxiety about the future.
Here are a few great examples of how companies are tapping this opportunity:
- Some 2-2.5 million of Fujitsu’s age-friendly Raku Raku Phone phones are sold annually, (roughly the same number as the total sales of smartphones) in Japan. With larger buttons and features pared down to those most useful for the aged, the handset has proved a hit among the target consumers.
- Accordia Golf a major golf course operator, introduced a new membership program for customers age 60 or older that offers special discounts on weekdays. In Ibaraki Prefecture, about 560 people signed up for the program in the four months through July.
- Central Sports, which operates fitness clubs, has seen the ratio of members in their 60s rise by five percentage points over the past four years to about 19%.
- Shiseido says the same-store sales of its Elixir Prior line of cosmetic products, developed for women age 60 or older, are posting double-digit year-on-year growth.
According to an analysis by the Cabinet Office, households of people ages 60-64 with savings worth 38 million yen or more spend, on average, 1.9 times more than their disposable incomes — mainly pension benefits — on goods and services. The figure for households with savings worth 6 million yen or less is 1.2 times.
Researchers say that people ages 60-70 have about 50,000 hours of leisure time, half of people’s lifetime work hours. A growing number of local governments are trying to tap into this ample chunk of leisure time. Hiroshima, for instance, has launched a training program for seniors interested in becoming farmers.
About 11% of all spending expenses for elderly Japanese goes into education and leisure activities, compared with 6.6% for their American counterparts. This is a fact neither businesses nor the government can easily ignore.