Anyone born in Germany in 2018 has a real chance of one day reaching their 100th birthday. Thanks to medical and technological progress, life expectancy has been increasingly on the rise for decades now. The advanced age being reached by many people today has had an effect on many areas of society such as the labor market and pension system, as well as bringing about various demographic changes (key word: declining in birth rate). Retailers and manufacturers also have to adapt to sociodemographic and sociocultural shifts in order to remain competitive. To this end, they require one thing above all else: Knowledge of current and future significant trend target groups. For example, silver professionals, late mothers and people living alone all play an important role in this regard. What attitudes shape these target groups? And how do their requirements differ?
A few decades ago, a typical German life story went something like this: After completing an apprenticeship or studying for a degree, individuals would soon get married and start a family while they were still young. After that comes the time to focus on children and career, generally with clearly defined gender roles for men and women. At around 60 years old, most people then retired and spent their twilight years either alone or with a partner, depending on their state of health and individual life story. At each phase of life, consumers place an emphasis on different requirements, from building loan agreements to baby products and subcompact vehicles. How does increasing life expectancy affect lifeworlds and, accordingly, consumer demands? In principle, the number of pensioner households should steadily increase in an ever aging society ̶ yet, in reality, the opposite is actually the case, as can be seen from a glance at family social groups. The proportion of households in which pensioners live has decreased over the last decade from 35% to 31%. This decline is above all noticeable for pensioner families: While 20% of households were pensioner families in 2007, this value sank to 16% in 2017. The drop is slightly less pronounced (from 15.1% to 14.5%) for senior citizens living on their own. Information from the 37th Kronberg entrepreneurial talks back this up, for which GfK SE and the GfK Verein jointly conducted comprehensive analyses from the GfK household panel and an extensive, qualitative online study on three trend target groups.
In quantitative terms, young households have so far lost significantly less relevance. The proportion of all households that they account for fell from 27% to 26%. This group includes young families as well as students and apprentices with their own households, in addition to single households and employed couples without children (DINKs: “double income, no kids”). These last two groups have seen growth from 10.7% to 11.5% within the last ten years, which counteracts the declining shares for young families as well as students and apprentices with their own households. While pensioner and young households have quantitatively become less important to a greater or lesser extent, the “middle”-aged households have gained a solid 9% since 2007. Today, households with older employed persons make up the largest group, at 40%. This development has mostly been driven by working people living alone: They make up almost 12% of all households making them the largest group, despite only representing 7% a decade ago. The number of empty-nest families, i.e. those where children have already left home and that can now concentrate fully on relationships and jobs, is increasing: They have risen from 9.7% to 13.1% within ten years. Older families with children also saw an increase, but this was just 0.6%. They currently make up 14.5% of all households.
What is behind this quantitative shift in family social groups? Three factors play a part in this: A longer working life, as led by the “silver professionals,” starting a family later on and a growing community of single people. Legislative changes adopted in 2007 on the age of retirement have had an effect in terms of the work factor. Back then, the decision was made for retirement to start at 67 years old, with the official retirement age being increased successively since 2012 towards this target. However, regardless of the legal situation, many workers today have a longer working life ahead of them. While in 2006 just 44% of 60 year-olds in Germany were still in employment, this value had increased to over 70% in 2016. The average age of retirement increased from around 63 years old in 2006 to approximately 64 years old in 2016. Even the over 67s aren’t necessarily thinking of clearing out their office desks. Two years ago, 13% of 68 year-olds and almost as many 69 year-olds were still a part of the workforce. Ten years previously, the respective figures were less than half the current values. However, if we keep working longer and longer, the number of pensioner households decreases, above all in the 60-69 year-old group. Ten years ago, just under 90% of households in this age group had retired, but now this number is significantly lower, at 60%. The share of 50-59 year-old heads of households in retirement has even more than halved, currently standing at 12%. However, it seems that after our 70th birthday, the stress of the workplace and our careers comes to an end: Today, as before, the majority of people are retired by this age. Here, a total of 95% of heads of households are pensioners, but in 2007 this was slightly higher, at 98%.
Late motherhood is the second decisive factor in changing family social groups: Not only are we tending to have fewer children, we are also having them later and later. The average age of first-time mothers is now almost 30 years old (as at 2015), whereas this was significantly lower a few years ago. This affects the structures of households: Young households (head of household up to 29 years old) with children under the age of six are rarer now than in 2007, whereas there are more households in which 30-49 year-olds have young children. The growth is the most noticeable in the 30-39 year-old age group, which has seen a rise of 5 percentage points over the last decade.
The third aspect comes down to our ideas of social relationships. While people unmarried in their mid-thirties used to be labeled as eternal bachelors or spinsters, nowadays being single is a long-term or at least intermittent life model regarded by many as both reasonable and pleasant. The interesting thing about this is that not only young people, but also older generations, are living alone more often. While growth in this context is still largest among the 20-29 year-olds, at 29.5%, there are now also 26% more single households among 50-59 year-old heads of households than was the case in 2007. Moreover, today there are more single-person households in most of the other age groups too. This number has only declined over the last ten years in the over 70s households (-11%). This is due, among other things, to increased male life expectancy, meaning that couples often live together for longer.
It was once the case that we would go from being young and single to a young married adult surrounded by children before retiring at 60 – but these times are now over. Today, family social groups are much more complex and are not so easily differentiated by age. If you want to understand the new trend target groups, you have to take into account the changes in the world of work or individual attitudes and life plans. But what characterizes the three identified trend groups – silver professionals, late mothers and people living alone – in terms of their interests and requirements? How do they differ from other people in the same phase of life? When silver professionals (i.e. 55-64 year-olds who still work) are compared with pensioners of the same age, they definitely share some common ground at first glance: Despite their “senior status,” both groups – even those in retirement – are more active than before, live healthier lifestyles and are aware of their own mortality. However, while older people in retirement tend to live more introverted lifestyles and spend time with their partner, silver professionals also pursue their passions after office hours. They tend to be active people who want to do their bit for society. Perhaps the fact that a job may be stressful every now and again might trigger a desire for more time to enjoy the finer things in life. However, this group seemingly enjoys having a packed diary, believing it does them a world of good. The silver professionals see work as a way to stay active, ensuring a healthy mind and healthy body. Oh, and incidentally, working for longer also helps to amass a nice financial cushion.
Women who have a child early have one thing in common with those who wait (whether through choice or necessity): With the birth of a child, another person becomes the center of their lives. Security becomes more important, as well as healthy eating and having a well-functioning household – yet both groups suffer from a lack of time to put all of this in place. People who make the choice to have children later on often do so because they feel that they should make the most of an unburdened life “before” and want to focus on their career. This is so that they then can concentrate fully on motherhood later on, although that doesn’t mean that these women will spend the rest of their lives at home. It’s almost as if these mothers have several lives, each with different focuses, and with age children become the central focus. Moreover, late mothers are more interested in sustainable consumption, are more critical and are particularly demanding when it comes to the quality of products that they buy.
Over 40% of all households in Germany are now single households, and this trend is continuing to grow. However, this relatively large group is not so easy to describe, since it is so diverse and above all focused on individuality. There are still some specific characteristics that are identifiable: People living alone in their own four walls mostly do not see this as a necessary evil, but actually as advantageous. Freedom, flexibility and a certain dose of hedonism characterize single people in modern society. Moreover, they are often 21st century nomads, who are always on the move and, as such, are always pressed for time. Differences within the group above all depend on age and sex: Men living alone feel slightly less societal pressure with regard to their way of life than women do. Their female counterparts tend to think more about their situation and its effects and pay more attention to issues such as nutrition or appearance. As a result of their experience, older people living alone know what works for them and are appreciative of everything that they have achieved, while younger people experiment more and want to keep as many options open as possible. People over 40 who live alone lead an independent, self-determined life that mixes career, hobbies and social contact. Time stress is preprogrammed, which is why these people regard their own four walls as a comfortable retreat where they can truly be themselves. It is little wonder: As soon as they step outside, they are particularly preoccupied with their external appearance. After all, the hunt for a partner is still not necessarily over for this group.
What do these findings about the new trend target groups mean for manufacturers and retailers of consumer goods? How do they reach out to these groups and meet their needs in a targeted fashion? One thing applies to all three groups: Discounts and promotions that are supposed to draw people into shops even in the early morning depend on a customer’s life situation. For instance, someone who wants to quickly drop their son off at daycare before rushing to work has little time for extended shopping tours. This goes equally for working people without children, who are mainly restricted by their job. Marketing campaigns in the evening or at the weekend would reach this group better, especially if they are at full-range supermarkets. After all, these locations offer them the ability to tick off everything from their shopping list all in one place in a pleasant atmosphere. This saves time, which is a precious commodity for all. In terms of individual product groups, particularly older singles tend to act in line with a principle of buying what appeals at any given moment, without giving this much of a thought. As such, this consumer group is particularly partial to convenience products. Of course, anything that saves time and effort also appeals to late mothers, but only if the products are as free from additives, healthy, sustainable and high-quality as possible. Silver professionals plump for convenience and quality too. Compared with their retired peers, convenience products and premium brands land in their shopping baskets more often.
Apart from targeted marketing campaigns and stocking the right range of products, what can retailers and manufacturers do to optimally meet the needs of the three target groups? Clearly people living alone, silver professionals and late mothers require one thing above all else: Support in shaping their current phase of life into a success. Perhaps in the future we will see drones in the sky, delivering fresh fruit and vegetables to well-to-do silver professionals from their local market. Or maybe we will see late mothers using their smartphones while out and about to turn on the washing machine and quickly glance at a digital shopping list created by their refrigerator. Alternatively, it is possible that people living alone will return home after a stressful day to be greeted by a fire already blazing away in the fireplace and their favorite music playing, all thanks to smart home technology. This is all technically possible already but isn’t widely used. Perhaps out of concern for personal data or due to doubts that the technology can actually make the best consumer decisions.
Data source: 37th Kronberg entrepreneurial talks, January 2018 (Beyond disruption – Creeping sociostructural shifts with great influence on consumer behavior)
If you have any queries, please contact Claudia Gaspar, Robert Kecskes, or Wolfgang Adlwarth.
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