RNG            
RETAILNET GROUP STORE TOUR                                                Apr 2010
Aging Population Dilemma - Kaiser's Senior Friendly Store


Hello:

As the global population continues to age, the retail landscape is changing along with it both to accommodate the changes and to differentiate with select target shoppers. Many of today's stores were built for shoppers who are now the 50+ generation, but the new shoppers (age < 25) who are entering the stores are a very different generation and want to experience something different. The new generation that is entering their peak shopping years as they purchase their first home and begin family formation is extremely different from that of their parents, in two significant ways:
  1. They are  increasingly technology enabled and even dependent: They want the option to use their cell phone to get more information on products and even check prices across competitors, etc.

  2. They have lower purchasing power than that of the previous generations driving greater demand for value and discount orientation.
The major question that most retailers now have to face as a result of the age rotation is - who should they tailor their stores to: the younger generation entering peak consumption years or the growing older population who is shopping less but in some cases has more purchasing power?
 
As always, please share any thoughts with us that you have on the subject.

Regards,

Hannah Donoghue
Research Analyst
RetailNet Group
www.retailnetgroup.com
Aging Population - A Global Dilemma

As birth rates slow down and the baby boomers age, a major shift is taking place along the age pyramid. This trend, increasingly evident in the EU and Japan, is causing a stir as the economies now need to adapt. Not only are the populations going to have a hard time replacing themselves, as a result of slowing birth rates, but also the dependency ratios continue to rise. This shift inevitably causes a large population to be reliant on the smaller group that is still in the workforce, those who already have lower purchasing power. As seen in the chart below, it is predicted that by 2050 over 30% of the EU-25 population will be 65+ years old.

Figure 1: Rising Share of Elderly Population in EU-25
                                                                                     
EU Senior Population
(click image to enlarge)

Source: "Features and Challenges of Population Ageing: The European Perspective" Asghar Zaidi;
UN World Population Prospects and Eurostat

This older demographic will inevitably shop in different ways and different channels, leaving the Hyper/Supercenters and trending more towards the smaller convenient grocery stores and the Health & Beauty stores. Retailers now need to decide how to adapt their stores for this growing population and how or whether to tailor them to the technology dependent generation, which would dramatically change the box.
 
In Europe, some of the big retail players have decided to trial a Senior-Friendly store. In Germany, where 21% of the population is currently 65+ and expected to grow to 33% by 2050, retailers have recognized this trend and innovated.

Age Structure: 2009Age Structure: 2050

(click images to enlarge)
Source: Destatis.de

Edeka's then subsidiary Adeg began this innovative trend in Europe in 2003 when they opened up the first Adeg Aktiv Markt 50+. They introduced a variety of new features including magnifying glasses, non-slippery floors, larger labels and Health Service kiosks like a blood pressure monitor station. Tengelmann followed suit in 2007 when they opened their first Kaiser's Senior Friendly store. Since selling their shares of Adeg in 2008, Edeka has opened their own Edeka 50Plus banner and continued to roll out their Märkte der Generationen format. In the UK, Tesco intends on opening a "Pensioner friendly" store of their own soon.  RNG recently had the opportunity to tour the Kaiser's store in East Berlin and we thought we'd share with you what we saw.
Kaiser's Senior Friendly Store

With the aging population becoming a more evident issue across Germany, Tengelmann took proactive steps in creating a new format that would improve the overall shopping experience of the senior shopper. They not only added in new tools that would help the shoppers but also changed the store layout to better serve this growing population.

Messaging

Targeted Marketing to the Senior Shopper

Targeted Marketing Signage
(click images to enlarge)

"In order to make you feel especially good in our shop:
-Shopping carts with built-in seating
-Wide aisles, non-slippery floors, pleasant and non-blinding light
-Numerous signs, magnifying glasses for reading price and product information
-Specially marked small and single serve packages
-Meat, sausages, cheese and fish departments with expert consultation service
-Extensive fresh and bio-assortment, health and diet products
-Meet other people, get information or relax in Kaiser's meeting area
-Free to call for a taxi
-We are always there for you, just call/press the button on a shelf if you need help"

Large & Consistent Signage throughout the store to increase visibility and facilitate the shopping experience

SignageConsistent Signage
Signage
(click images to enlarge)
Specially Provided Tools: Improving the Trip

Customized Shopping Carts:  Offer ergonomic handles for senior shoppers and also seats that provide the option to rest during an extended trip, therefore increasing the potential time in store.

Customized Shopping Carts
(click image to enlarge)

Customized Shopping Carts

(click image to enlarge)
Source: MetropolisMag.com

Magnifying glasses are placed at the end of the aisles to help read product information. Also, note the red box that has a button where shoppers can push for help.

Magnifying Glasses
(click image to enlarge)
Store Layout Innovation - Improving Accessibility

Lower Product Displays and Wider aisles - Creating clearer sight lines and improving navigation across the store

Low Product Displays Wide Aisles
(click images to enlarge)

Raised Platforms to help reach products placed higher up

Raised Platform
(click image to enlarge)

Pleasant Low Lighting that is easy on the senior shopper's eyes

Low Lighting
(click images to enlarge)
Editing the Product Offerings

Single Serving Offerings that allow the Senior Shopper who is no longer in peak consumption years buying for a family to avoid buying in bulk.

Single Serving Single Serving
Single Serving Single Serving
(click images to enlarge)

Emphasis on Health - Medicine display at the end of a food aisle

Medicine
(click image to enlarge)

Bio tag indicating organic products - Naturkind private label organic food throughout the store



Naturkind Private Label
(click image to enlarge)

Tengelmann's Kaiser's banner has clearly taken steps to win this group of shoppers and it will be interesting to see over time who adapts to this trend next and how winning this group could affect market share. 
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