MW Boomers are good for business: The 'longevity economy' is the new gold rush
By Richard Schenkel
Older consumers are a largely ignored - and very lucrative - group.
?Today's aging population completely defies the stereotypes of yesteryear. Baby boomers have accumulated more savings than their predecessors, they are more heterogeneous, and they have a multitude of visions for how they would like to live.
Consider this: The oldest segment of our population is responsible for a significant amount of the spending in critical product categories such as food and beverage, housing and utilities, health and recreation.
The sum of all economic activity serving the needs of Americans over 50, including the products and services they purchase directly, and the downstream economic activity has been dubbed the "longevity economy." Rather than the antiquated "burden on society" label, today's diverse and empowered aging cohort is driving an unprecedented $8.3 trillion in annual economic activity in the U.S. alone.
Older consumers are not only financially formidable but also remarkably tech-savvy, worldly, and their lifestyle expectations have been transformed by the influence of technology.
Despite their economic and cultural influence, older consumers have historically been overlooked as companies prioritize younger audiences who are generally seen as trendsetters and early adopters. Outdated stereotypes assume that older generations resist change and lack engagement with modern innovations. However, this perception is rapidly shifting as boomers redefine aging and demanding products and services that align with their dynamic lifestyles and aspirations.
The longevity economy is not just a market; it's a movement that redefines aging and creates opportunities for those willing to think creatively and act boldly. Older consumers are not only financially formidable but also remarkably tech-savvy, worldly, and their lifestyle expectations have been transformed by the influence of technology.
Striking a balance where technology augments and facilitates human connection is paramount, representing both the greatest opportunity and challenge for companies targeting boomers. It's not about robots replacing people or 3-D printed furniture (yet). The opportunity right now is to fuse data and innovation in ways that deliver a new type of consumer intimacy.
Read: This simple practice could lower the rate of depression among retirees
Everything is personal
We've all come to expect that our Spotify $(SPOT)$ playlists, Amazon $(AMZN)$ suggestions and Facebook $(META)$ feeds are personalized based on our preferences and demographics. But human touch is still enormously important. Today, 71% of Americans would rather interact with a human than a chatbot or some other automated process, according to PWC's ?Experience is Everything report.
There's a unique nuance to this phenomenon for businesses serving the aging population. Unlike the relative predictability of a 5-year-old's developmental milestones or the shared generational trends of 25-year-olds, older adults exhibit wide-ranging differences in physical health, financial stability and personal interests.
From tech-savvy globe-trotters sharing travel tips on social media, playing pickleball and launching second-act careers to those battling chronic health conditions like arthritis or cognitive decline and preferring simpler routines, the diversity challenges businesses to move beyond a one-size-fits-all approach.
Businesses require advanced technology solutions that capture data to understand the unique interests of seniors and, equally important, facilitate a highly personalized service culture. From personal greetings by name and really understanding personal preferences to anticipating needs, there is a huge upside to this focused approach.
In his book, "The Longevity Economy," Joseph Coughlin challenges businesses to imagine products, services, and solutions as dynamic and diverse as the aging population. He points to streaming services like Netflix $(NFLX)$ and Amazon Prime where older adults are one of the fastest-growing demographics, online dating apps and the global gaming market for older gamers which is expected to reach $11 billion by 2030. Companies that curate content and tailor experiences specifically for this segment are the ones that will succeed.
Read: Call it virtual assisted living: Seniors can stay in their own homes longer thanks to these pandemic hacks
Instant is expected
In a world where we can talk to our watch to check the weather and order a car ride or movie on demand, the currency of immediacy is at an all-time high. Don't think for a moment that the aging population is any less demanding than millennial or Generation X consumers. Concierge doctors arose to provide faster and more personalized care for an aging population. Just ask any boomer parent how quickly they expect a text reply from their children or spouse, and it becomes clear that we all have a need for speed.
While technology is a driving force for this culture shift, one of the most powerful ways to take it to the next level of excellence is all human. Businesses eager to create more intimate connections with today's aging population must leverage AI and predictive analytics to provide real-time relevant engagement opportunities for front-line workers - whether they're answering a customer service call or taking a lunch order at a senior living community.
Companies that empower their employees to do what it takes to exceed expectations in the moment are the ones that will flourish serving today's aging population. There is a growing movement toward employee ownership models to ignite a culture of empowerment.
Ownership Works is a nonprofit organization founded by Peter Stavros, co-head of global private equity at KKR, building use cases across industries to generate $20 billion of wealth and enhance service performance through shared ownership. Businesses looking to capture market longevity economy market share may be well served to consider employee-ownership models to elevate service experiences.
Read: Why your 401(k) may be breaking the first rule of investing
?Bring on the feedback
Perhaps more than any other consumer experience area, technology has forever changed the value of customer input. Baby boomers grew up in an era that relied on family, neighbors and the nightly news for reviews. Now that everyone's a critic, we seem to have an insatiable appetite for the insights of complete strangers for doctors, hotels and the latest streaming series.
The implications for businesses hoping to earn boomer loyalty today are twofold. First it is imperative to build technology solutions that capture and measure feedback in minutes not quarters. Front line employees need easy-to-use technology tools so they can be on a constant mission to seek input - and see the inherent value in receiving feedback.
This brings us to the second critical implication. Input is only helpful if it's actually used to inform and improve customer experiences. Airbnb collects feedback from both hosts and guests to address issues promptly and identify areas for improvement. Chewy $(CHWY)$ has leveraged the power of prompt and personal customer service to capture loyalty in the seemingly commoditized pet product category.
When done well, these types of continuous feedback loops can propel a business from ordinary to extraordinary.
Read: Here's a surprising reason most boomers are worried about moving to a senior residence
Experiences are more important than ever
Immersive experiences have become standard fare for shopping, dining, travel, and entertainment. Cirque du Soleil has redefined live entertainment with its multi-sensual theatrical productions.
You can test your new golf clubs at a virtual Pebble Beach hole before you buy them. And we've seen an experiential transformation in places like airports where cafeteria dining has been replaced by a diverse array of regionalized culinary offerings with technology-enabled quick service.
The aging population's buying power and expectations set the stage to disrupt untapped markets like senior living with experiential dining. Would you want to eat at the same restaurant seven days a week? Technology and personalized attention can greatly enhance these experiences with interactive menus, customized recommendations, and ever-changing designs that transform dining spaces into destinations. The key ingredient to success is the ability to foster connections, anticipate needs and resolve issues promptly through human connections.
The gold rush of our generation is the Silver Age. As more businesses embrace this ethos and find that sweet spot where technology complements and facilitates human interaction, they will thrive for generations to come.
Richard Schenkel is chief executive and managing director of Phoenix3 Holdings LLC, which invests in lifestyle and services companies in senior living, health care and corporate sectors.
-Richard Schenkel
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(END) Dow Jones Newswires
January 17, 2025 08:03 ET (13:03 GMT)
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