Business | Silver linings

Japanese firms get better at selling to seniors

Not treating anyone as if they are old is essential

|TOKYO
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A BRANCH of Renaissance, a Japanese chain of fitness centres, would not seem the likeliest place to find crowds of the elderly, but they abound. Older women chat as they leave the facilities with wet hair; a couple of seniors sit in the lounge reading books and sipping coffee. The lounge is something the chain introduced with the grey-haired in mind. “Our older clients like community and hospitality,” says Naoki Takazaki of Renaissance. All staff must make time to chat with them.

Japan’s population is ageing more rapidly than any other country’s. Those over 65 years of age make up 28% of the population, a proportion expected to rise to 40% by 2065. Any business that wants to prosper has to cater to their needs. It is an opportunity rather than a problem, says Masahiko Uotani, chief executive of Shiseido Group, a cosmetics behemoth: older people live longer, are active for longer than past generations and are relatively rich. “But you have to take the time to find out what they actually want since it is often not what you expect,” he says.

The obvious opportunities are in care of the elderly and end-of-life services such as funerals. Big companies such as Kobe Steel and Hitachi, two industrial heavyweights, sell private housing to seniors. Several providers of nursery schools have also started care homes for the more numerous people at the other end of life. Robotics firms are developing tools to help old people live independently for longer. Manufacturers of walking sticks and adult nappies are faring well.

Unexpected avenues of business are also opening up. Renaissance realised earlier than other companies that older people want to stay fit and started to offer discounted memberships for those over 60. By 2016, 30% of its customers were over 60 compared to just over 3% in 1994. People in this age group are much less likely than younger members to give up their membership, which is good for business, says Mr Takazaki.

Many retirees simply want the same things as those a decade younger, slightly tweaked. O-net, Rakuten’s matchmaking arm, in 2013 launched a dating service for seniors which is growing. Shiseido beauticians go into care homes to teach old people how to do their make-up, at a cost (to the care home) of ¥10,000-20,000 ($88-177) per visit; a process with therapeutic benefits. Since older people often spend longer in a shop, making them more likely to spend, some convenience-store chains have tried to become places to socialise by adding dining facilities or having personnel make coffee rather than offering it from a machine, says Ming Li of Lawson, a chain of convenience stores.

Companies have also noticed how, in Japan too, elderly folk are reluctant to shop online. Lawson is rolling out stocks of books in some shops while it and other convenience-store chains (so ubiquitous that older people can often walk to them) are competing with supermarkets by stocking more food, cleaning products and over-the-counter medicines.

Despite the plethora of initiatives, businesses are only in the early days of working out how to target older consumers, says Hiroyuki Murata, who heads the Centre for Studies on Ageing Societies and advises firms on targeting the silver-haired. Few companies have yet started opening early, for example, when old people say they like to get out and about. Most stores have yet to improve access for the infirm with, say, handrails (public facilities have brought in features such as slow escalator speeds).

Marketing to older people is another area that needs work. They want to be subtly targeted, says Mr Uotani, rather than being reminded of their age through, say, adverts using someone advanced in years or with wrinkles. “I’m 64 and I am not old!” he says. His firm seems to have pulled this off; sales of Shiseido’s Prior range of cosmetics aimed at those over 50, with simple packaging and instructions on how to use the products in a large font, have risen by 120% per year in the two years since its launch in 2015.

Another sizeable opportunity may lie in what firms can then export in terms of know-how as other countries follow Japan’s demographic trajectory. Last year Shiseido started to run its care-home cosmetics lessons in Taiwan. Renaissance has developed Synapsology, a programme of simple but ever-changing exercises for the brain, and now makes money both taking the programme into care homes and certifying people to run the course. It has struck a deal for a South Korean company to host it locally. That fits nicely with another priority of which Japanese firms often talk: becoming more global-minded.

Correction (August 3rd, 2018): We misspelled the name of Naoki Takazaki as Naoki Takazaka. This has been corrected. Sorry.

This article appeared in the Business section of the print edition under the headline "Silver linings"

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