Retailers 'must adapt to win over older shoppers' – study

http://www.guardian.co.uk/business/2013/feb/08/retailers-older-shoppers-study

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Retailers must adapt to attract an army of silver-haired shoppers who will dominate the shopping centres of the future, a report out on Friday suggests.

Relatively low growth and the ongoing switch to online shopping will drive a 10% drop in store numbers according to Conlumino, the retail market research company which produced the report.

The over-55s will contribute nearly two-thirds of retail sales growth over the next decade as the baby boomers head into retirement. The ageing population will continue to fuel retail sales growth at 2.4% over the next 10 years reaching a total of £377bn by 2022. However, that growth runs significantly below the average 4.5% enjoyed during the late 1990s.

Retailers will have to up their game to win sales, say the Conlumino analysts, rather than rely on a credit-fuelled boom.

"The older shopper of tomorrow is very different from today. They are a lot more savvy and demanding in terms of customer services and they are more attuned to fashion trends which they want adapted to suit their age bracket," says Neil Saunders from Conlumino.

He says those retailers who can get the formula right have a great opportunity to take market share from some of today's brands who are still creating products for the "Miss Marple generation".

David Atkins, chief executive of shopping centre developer Hammerson, which commissioned the report, says that its response to an ageing population will be to improve car-parking and add more restaurants and leisure facilities such as cinemas, so that older shoppers can relax with friends and family. He said catering and leisure facilities are likely to make up more than a quarter of Hammerson's shopping malls in future, compared with around 15% today and just 2% or 3% historically.

Stores are also likely to be bigger to allow shoppers to see a wider range of products to be displayed and fit in new customers services such as collection points for good bought online.

As a result, Conlumino predicts that, although the number of stores in the UK is set to fall, the total amount of retail floorspace in the UK will drop just 5%.

In that changing environment, traditional high streets, many of which already have high shop vacancy rates as a result of the economic downturn, are likely to come under increasing pressure.

Atkins says: "It's about the experience and the catering that shopping centres can provide more readily than high streets."

But Chris Wade, chief executive of Action for Market Towns, says local high streets are fighting back.

"Many small towns have been evolving in the past few years with award-winning projects such as local food markets and special events which are attracting people to high streets," Wade said.

He said high streets would continue to be attractive because they tend to have a more interesting mix of shops including local independents which keep more money within the community.

Wade said: "If you spend money in an independent shop 80% of that money stays in the local community. At an out-of-town shopping centre it is usually less than 10%."