NEW YORK: Brand owners must react to the long term trend towards ageing populations in many key global markets to guarantee future success, the Boston Consulting Group has argued.
In a report, the company made clear the scale of the transformation now taking place. As an example, in Germany alone the amount of 15–64 year olds will fall from the current 54m to 41m in 2050.
During this period, China's working-age population, which expanded by 100% from 1970 to the present, will shrink by 18%. Similarly the US retirement age population will reach 72m by 2030, from 41m now.
The worldwide dependency ratio, tracking the number of people aged 65 and over for every 100 people in the 16–65 year old cohort, also rose from eight in 1950 to 12 in 2010, and is pegged to stand at 25 in 2050.
More specifically, the dependency ratio will hit 35.6 in Japan by 2050, with Italy on 32.7, Germany on 30.9 and China on 25.6. India, on 13.5, and the US, on 21.2, are in somewhat better conditions.
"Ultimately, we are witnessing an unprecedented fundamental shift in the global demographic structure," BCG's study said. "The effects on companies in all major industries will be substantial."
In terms of consumer spending, the "silver segment" of over-55 year olds will deliver 86% of expenditure growth in Germany across the period to 2030, coming in at 67% in Japan and 50% in the US.
Unilever's Dove brand has targeted this audience via its "Beauty has no age limit" campaign, while retailers like Kaiser in Germany and Lawson in Japan have modified certain stores for senior citizens.
Ford, the automaker, has developed a "Third Age Suit" simulating the effect of ageing to use in the R&D process, and Kimberly-Clark deploys this tool when researching the in-store experience.
"Companies that recognise the magnitude of the changes to come - and that take the necessary steps not just to cope but to benefit - will best adapt to and profit from the new reality," BCG said.
Less positively, contracting workforces will impact GDP growth, placed at between 1% and 2% for Western markets to 2050 versus figures in the 3% to 6% range for the typically more youthful BRIC and Next 11 economies, leading to a "two-speed world".
Turning to labour, the share of working age people who are 50 years old or more will rise from 20% to 30% from 2010 to 2050. BMW, the carmaker, says 40% of its staff will be in this category by 2020, and over 55% of Boeing's engineers already are.
Data sourced from Boston Consulting Group; additional content by Warc staff