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Business

Discovering the Silver Economy

In TV ads, most people are young and beautiful. But this is changing in Germany and elsewhere in Europe as businesses discover that seniors have lots of money they'd prefer to spend on products created for their needs.

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Have advertisers got their focus all wrong?

In the reality portrayed by TV advertisers, a 30-year-old man can afford to buy the latest Mercedes-Benz, only young people drink €15 ($20) bottles of champagne and even anti-wrinkle cream is applied by beautiful women who don't look a day over 30. Thus, when older people go shopping they often feel they've been overlooked.

Eve Fear, 65, doesn't feel tempted to buy anything when she goes to fashionable stores at home in Birmingham in Britain, she says. Young women look down at her from the large posters as if to say: "This is not for you, you're too old for that."

"Certainly we are not catered for within the fashion world and lots of older people do have a lot of money to spend," Eve Fear said. "There's certainly still poverty amongst older people in Britain but they like their holidays. That kind of thing can all affect the economy."

For too long, business has only cared about the 14- 49 year olds, Eve Fear says. But the politicians, businesspeople and seniors who met recently for an international conference in Bonn to discuss seniors' needs for new products determined that the future may just be in consumers beyond 50, an ever larger part of society in industrialized countries.

Taking advantage of demographic change

"In the year 2040 a third of the German citizens will be older than 60," Birgit Fischer, minister for family and seniors in the German state of North Rhine-Westphalia pointed out. "There are already cities and communities where we have more 70- than seven-year olds. Because of that we need another perspective on the older generation. Economic growth and opportunities for society depend on that."

Bahnhofsbuchhandlung in Frankfurt

They've got the money

Still, political and economic views of seniors are often one-sided in Germany, where older people are largely seen as an expense. It's true that the growing number of old people will have to rely on a decreasing number of younger people to finance old-age pensions. Additionally, health-care costs increase as society ages. But by focusing only on problems, society risks missing the opportunities that "demographic change" offers.

Take spending power, for instance. The spending capacity of Germany's seniors alone is €90 billion -- the gross domestic product of Venezuela. And people over 50 own half of Germany's wealth, according to a study by Allensbach demographic institute. Of course, some do only live off €400 a month, a minimum to exist. But generally older people live much more comfortably than, say, many single mothers. On average, a pensioner in a two-person household has €1,600 to spend each month, about €100 more than a member of a family with children under 17. A young, single mother with one child lives off only €800 monthly on average.

And older people have the time to spend their money, too.

Time and money on their hands

"The impression is that older people are not interesting for the market because they often think they are old so they don't spend a lot of money, they don't have a lot of activities," says the senior citizen's representative in the Dutch city of Maastricht, Salden Stella. But Stella says the opposite is true. "We see now that older people are very active."

Senioren im Fitness Studio mit Thumbnail

Who says seniors aren't active?

As European business discovers seniors as a target group, they're changing their tactics. Even the youth-obsessed advertising industry has begun trying to attract the older customers; the "best agers" and "50plus" are the heroes of the "silver economy." Big companies have started employing so-called senior scouts, older people who test particular products in supermarkets for seniors. Can a coffee package be opened easily without agile young fingers? Are the keys of a mobile phone big enough to call the doctor in an emergency?

"The sale of cars could be increased by 5 to 8 percent if the industry would offer cars that are senior-compatible, if they would care for the aged as a consumer group," says Klaus Gretschmann of the Council of the European Union.

"These are restraints that we have to remove and if we erase them the whole seniors sector will contribute to European economic growth."

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