Kill age-based consumer segmentation now

Age-based segmentation, like 50+ or 65+, likely had a place in a world where individuals experienced roughly the same life-course, which was a reality for most of history. However, it has no place in the Super Age, where the longevity gap is as wider than its ever been, and individuals are aging at notably different rates and with varying outcomes.

Before the Second Industrial Revolution, which occurred from 1870 and 1914, about half the population followed a generally prescribed life-course where, if they were lucky, they would live through three life-stages — childhood, adulthood, and old age — at roughly the same times. The other half died before they reached adulthood.

Young people who survived childhood would become adults, at least in the eyes of society, around the age of 14, which is around the time of puberty; some type of religious ceremony would typically mark this change. Shortly after these children became adults, they would likely marry and then have their own babies. Since there was no formal retirement system, most people would work until they could no longer. “Old” was a term that was generally reserved for those in decline, especially people that could no longer work or care for themselves. This cycle continued for thousands of years.

Advances in science, technology, and social welfare, which occurred during the latter part of the Second Industrial Revolution, paved the way for improved survival rates of children into adulthood and changed the way in which individuals experienced life; average longevity increased substantially. Following the advent of child labor laws, as well as universal childhood education and old-age pensions, the life stages of adolescence and retirement became part of the prescribed path.

In the 20th Century, those who were higher income began to alter the life-course, yet again, by marrying and having children later, or refusing to do either at all. Today, about half of people under 50 are not married and the fastest growing group of new parents are in their 40s. This is creating an extended adolescence and middle-age for some people.

The middle-plus, as I like to call the latter group, is a real sweet spot for businesses, because these people tend to be engaged in income-generating work, physically healthy and interested in their well-being, culturally connected, digitally savvy, and a have a higher net worth. Sadly, all too few businesses ignore these consumers, because they only see age, which is a terrible measure.

In my book, The Super Age: Decoding our Demographic Destiny, I warn against the folly of lumping everyone over 50 into the “longevity economy,” because I would no sooner segment a 50-year old with a centenarian, as I would with a newborn baby. Stage-based segmentation, which considers a number of different socio-economic factors, and has been core to my consulting business practice for years, is the only way to go.

Connect with us to learn more about how stage-based segmentation can help your business lean-into the future.