The Longevity Opportunity

As the global population ages, new consumer opportunities and markets will emerge. Every company should have a strategy for tapping into the needs, wants, and buying power of older customers.

In my previous article, I outlined the beginnings of an internal, employee-focused “longevity strategy” that organizations can use to reap the benefits of an aging workforce. In this one, I’ll discuss its external, consumer-facing complement.

The market for products and services for older adults is already strong, and it will become even stronger. With distinct consumption habits and service needs, Americans over 50 accounted for $7.6 trillion in direct consumer spending and related economic activity in 2015, and controlled more than 80% of household wealth, according to a 2016 joint report from Oxford Economics and AARP. Further, a 2010 AARP survey reveals that 90% of older adults say they want to be able to remain in their own homes as they age. Envisioning how communities will respond to the needs of aging people will keep many more of them in their homes and contributing to the economy. Bank of America Merrill Lynch projects that the global spending power of those age 60 and over will reach $15 trillion annually by 2020.

But the potential for forward-thinking companies goes beyond just an interesting business opportunity. Older adults are poised to shape consumer and capital markets in the years ahead. The McKinsey Global Institute concludes that the 60-plus population, one of the few engines of global economic growth, is on track to generate half of all urban consumption growth between 2015 and 2030. “The Longevity Economy is redrawing economic lines, changing the face of the workforce, advancing technology and innovations, and busting perceptions of what it means to age,” states the Oxford Economics/AARP report.

Across industries, there are multiple avenues for offering products and services that make a difference in people’s lives. In the health sector, “gray is the new black,” a Reuters piece observed. New offerings in biotechnology, devices, pharmaceuticals, and care services all target older consumers.

Research reveals that older adults dominate spending in 119 of 123 consumer packaged goods categories, spend more in grocery stores and purchase more new cars than any other age group, and account for 80% of luxury travel. The demographic is eager to spend on transportation, entertainment, food, and alcohol, representing an immense target market for fresh ideas and innovations.

The financial services industry has always catered to older people  — primarily those planning for retirement. As customers and clients prepare for longer lives, retirement remains a powerful growth driver. But a financial market for older workers and entrepreneurs is rapidly expanding too. Driven by financial assets controlled by older investors, this segment of the longevity market simply cannot be ignored. People age 60 and over hold the majority of wealth worldwide and 70% of the disposable income in the U.S.

For most companies, longevity marketing is still in its early days. That must change. You need a strategy for older consumers, and identifying new opportunities and markets is just the first step. You and your employees also need to reconsider what you “know” about this population to avoid ageist and outdated messaging. Incorporate older employees into product planning, design, and communications to benefit from their experience and understanding. Use focus groups that include older participants to test products and services before they make it to market.

While most companies are in the early stages of developing their strategies, it’s worth exploring what some industry leaders are up to.

Philips and Nestlé have fundamentally shifted their businesses to capitalize on trends that are driven in many ways by the aging population. Both global companies have focused their futures on health and wellness, recognizing the massive opportunities ahead. In partnership with the Global Social Enterprise Initiative at Georgetown University’s McDonough School of Business, Philips is developing new technologies that can meet the needs of its older customers, including connected care solutions, safety applications, and cognitive health innovations. Patients and their doctors will be able to see, monitor, and share vital health information through secure devices, for example. Nestlé is investing in personalized diet and nutrition initiatives, and is broadening its portfolio by buying or acquiring stakes in health supplement and pharmaceutical companies.

Best Buy, with its recent acquisition of GreatCall, the provider of connected health and personal emergency services to the aging population, is focused on building relationships with older consumers. By gaining access to GreatCall’s customer base, Best Buy can further penetrate the health services and monitoring business and grow through its supply chain efficiencies and marketing reach. Several analysts hailed the acquisition, praising Best Buy for recognizing the market’s size and potential and the opportunity for a services business line to diversify the company’s offerings and counterbalance the margin pressures on electronics products.

Bank of America Merrill Lynch is training its customer-facing workforce to understand the needs of its aging clients. The bank recognizes that increasing longevity leads to new health care choices, housing issues, and questions about retirement and financial security. In partnership with the USC Leonard Davis School of Gerontology (which I’m affiliated with), the company’s longevity training program teaches financial advisers about older people’s experiences, priorities, and goals.

Uber and Lyft have developed programs to provide rides for older adults through age-friendly web tools, apps, and phone systems. Recognizing the importance of mobility to health and well-being, both ride-hailing companies are creating partnerships and scaling up efforts to facilitate access and ease of use for older adults and their families and caregivers. For example, both companies are working with call services (Lyft with GreatCall and Uber with RideWith24) to make it easier for older adults to book rides.

Intel is working on internet-of-things software that flags health concerns, and projects such as enabling wearables to analyze and communicate health data faster than ever through 5G internet connections. And Nest has begun modifying its line of smart home products to help older adults continue to live independently.

These are just a few examples of the longevity market’s prospects and possibilities.

Finally, as longevity strategies are developed and implemented, companies must consider not only how their products and services are designed but also how they are promoted. The power of media and advertising should be used to reflect realistic images of older adults instead of stereotypes. Older consumers do not want to be patronized, but they do want their needs acknowledged, and companies can do this while emphasizing both positive and real aspects of aging. While many companies have a long way to go, some are getting it right. On the positive side, Unilever’s Dove successfully employed its Pro-Age campaign, realizing significant market share increases. The smart marketing for Dannon’s Activia yogurt is focused on the common issue of digestive health. And in 2017 Allure Magazine showed leadership when it announced that it would no longer use the term “anti-aging” to describe skin care or makeup.

We’re still in the early stages of understanding what older consumers’ needs are and how to address them. The aging population is diverse, and the answers are not simple; one size certainly does not fit all. But we do know that there’s already a clear demand for products and services that can help people live longer, more-comfortable, and more-meaningful lives — and that are promoted without stigma or stereotype. This demand will grow rapidly in the coming decades, and companies that start meeting it now can reap a sizable dividend. It’s a huge opportunity, one that will have benefits both to their bottom lines and to society.

About the author: Paul Irving is chairman of the Milken Institute Center for the Future of Aging, the chairman of the board of Encore.org, and a distinguished scholar in residence at the University of Southern California, Davis School of Gerontology. He is also a member of the Advisory Council of the Global Coalition on Aging.

Source: Harvard Business Review

Latest Developments

We keep our members and partners in touch with the most recent updates and opinions in the worldwide dialogue on population longevity and related issues.

Global Coalition on Aging Workshop Calls on G7 Countries to Fund Pull Incentives to Spur Antibiotic Innovation

The Global Coalition on Aging, in partnership with JPMA, today announced the release of its workshop report on the AMR crisis facing G7 countries and the world, “The Value of Pull Incentives in Japan to Encourage Investment in Antibiotic Innovation to Solve the AMR Crisis.” If strong action is not taken to address AMR, we will lose the antibiotics we need to cure infections, which is likely to outpace cancer as a major cause of death, killing an estimated 10 million by 2050.

Our National Conversation on Aging

Now that President Biden officially declared his run for a second term, what are we to make of the countless warnings about his age? Clearly, voters have already considered age a major factor – Google Search results for ‘Biden age’ hit an all-time-high just before the 2020 election – and speculation has only heightened four years on. Unfortunately, these concerns are misguided and even dangerous because they conflate age with poor health and confuse ideas about work and retirement.

World Immunization Week: Best-Kept Secret for 21st-Century Healthy Aging

The tremendous success of childhood immunisation campaigns across the 20thcentury is one of the greatest triumphs of public health. Along with advances in sanitation and antibiotics, childhood immunisation has resulted in the miracle of modern longevity: the once extravagant prospect of growing old has become the norm. Now, in our 21st century, isn’t it our great challenge to build on this achievement by realising a healthy longevity?

South China Morning Post Letter to the Editor

Antimicrobial resistance is one of the defining global problems of our time. Drug-resistant bacterial infections killed an estimated 1.27 million people in 2019. By 2050, 10 million lives annually could be lost to antimicrobial resistance, and annual global gross domestic product could fall by between 1.1 per cent and 3.8 per cent. Fortunately, Chinese policymakers, physicians and patients have shown what is possible when they focus collective efforts on antimicrobial resistance.

Medicine Price Setting Might Appeal to Voters but Will Cost Patients

As policymakers search for potential cuts to the national budget, they risk jeopardizing the country’s most cost-effective use of healthcare dollars: biomedical innovation regarding vaccines , prescription drugs, and emerging therapies, including antibodies. As the nation rapidly ages, protecting this pipeline of medicine will not only improve health outcomes but will do so at a lower cost by reducing more expensive hospital and primary care.

Global Coalition on Aging Hosts Cross-Sector Roundtable to Tackle Heart Valve Disease in Aging Societies

The Global Coalition on Aging (GCOA) and the Global Heart Hub have released a global position paper “Heart Valve Disease: Harnessing Innovation to Save Lives, Mitigate Costs, and Advance the Healthy Aging Agenda.” The report builds upon on a December 2022 GCOA-GHH roundtable of cross-sector experts and examines how behavior and policy change can best address heart valve disease in our 21st century.

New York City Twins with Ireland to Develop Age Friendly Communities

The twinning commits both sides to share knowledge on age friendly programs and builds on the 2011 Dublin Declaration of Age-Friendly Cities and Communities. The agreement was signed by the Cathaoirleach (Mayor) Nick Killian of Meath County Council which hosts the Irish Age Friendly Programme and Lorraine Cortés-Vázquez, Commissioner for Aging.

Just Getting Started at 75

In the latest charge against the promise of healthy aging, Dr. Ezekiel Emanuel, oncologist and bioethicist, doubled down on his infamous 2014 essay stating that 75 is the ideal age to die. Now 65, he maintains that after age 75, he will no longer receive medical screenings and interventions like colonoscopies, cancer treatment, flu shots, and heart valve replacement.