Next Avenue: Why businesses are clueless about reaching this huge demographic

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This article is reprinted by permission from NextAvenue.org.

Global aging has largely been described as a story of “more” — more years of living and more older adults. Interpreters of this demographic trend rightly describe it as an opportunity for business. Estimates suggest that the 50+ marketplace may hold trillions of dollars — yes, that is a T — of consumer spending power, dwarfing the buying power of any other consumer segment and, for that matter, every nation’s gross domestic product except for the U.S. and China. Despite this vast untapped market, success among businesses at unlocking this new longevity economy has thus far been limited.

Why?

Outdated narrative of older consumers

Business is trapped in an outdated narrative of the lifestyles of people 50 and older.

Product developers, marketers and entire “innovation teams” in firms across industries are bewitched by a story line that describes older consumers as set in their ways, unlikely to try anything new, technologically inept, in poor health and, if given the chance, happy to withdraw from productive life.

Mistakes do happen. Consider the Honda Element.

There is another story.

In an interview with AARP The Magazine, acclaimed star of stage and screen Jessica Lange spoke of her priorities in life at 68 years old. She said: “Now the only thing I care about is, ‘Is it thrilling?’ ‘Am I doing something I haven’t done before?’” Lange articulated both a new vision of the older consumer and a new challenge to business. When will companies realize that they have a license to thrill their older customers?

Many firms see the older marketplace not in shades of gray but medical blue and hospital beige. These product developers primarily see older users as medical needs to be filled. Seemingly infinite hack-a-thons produce pill reminders, physiological monitoring apps and devices and other well-meaning systems wrapped in blue and beige boxes.

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Few of us look at a new way of taking our blood pressure and find it thrilling. And, given the limited market success of systems that glow at you, beep at you and even poke at you for your vital signs, it seems that even fewer of us are compelled to purchase it.

Hope for customers 50 and older

For those who are nearing the age of market invisibility — 50 — there is hope.

After all, mistakes do happen. Consider the Honda Element. Developed by Honda HMC, -0.04%   for young males in their 20s, the Element was reportedly conceived as a “dorm room on wheels.” With its boxy shape, wide doors and rubber floors, the Element was supposed to attract young guys with surfboards, bikes and dogs. A few wannabe surfer dudes did buy the car — very few. But what Honda missed was the Element’s attractiveness to older buyers — older hobbyists, gardeners and dog owners. The prime demographic for the dorm room on wheels was not 20-somethings, but buyers between 35 and 70 years old.

When older adults do not flock to buy what’s next on the shelf, they fluster product innovators, especially those in the tech sector.

Techies often retreat and find comfort in the myth that older people simply don’t like or don’t understand technology. But there may be another reason —older users set a higher bar for product adoption.

What tech companies need to do

Where younger buyers see novelty alone as a compelling reason to try something at least once, older users require the next new thing to be dramatically better than their existing methods and worthy of their time, money, and aggravation.

Technology products and services that clear this bar can and do find success with older consumers.

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They can be both a source of convenience and luxury as well as an invaluable tool for everyday living. Having meals delivered a la Instacart, transportation rendered on demand via Lyft, and chores accomplished around the home by TaskRabbit are not only desirable services for busy younger consumers. They are also a way for older consumers to reduce the friction of daily life, and even for the “oldest-old” (those 85 and older) to retain independence within the home.

Whether tech companies find a way to communicate to these older consumers is an open question.

Does ‘Margaritaville’ have the answer?

There is a crack forming in the narrative that frames how business thinks about older adults. Senior housing, for example, is about to undergo an extreme makeover.

Singer and storyteller Jimmy Buffett is laying the foundations for a $1.7 billion “Margaritaville” retirement-living development in Florida. If Buffett’s new community has any relation to his brand of escapist hedonism, Margaritaville is not likely to offer bingo as an activity. Buffett’s fans — known as Parrotheads, of which I myself am a card-carrying member — will not age quietly.

See: Do you want your retirement to be like a Jimmy Buffett song?

A TV commercial for the Toyota TM, -0.12%   Venza illustrates the coming shift. The spot first shows a 20-something at home, occupied with photos of puppies on social media. Then the view shifts to her 50-plus parents, cruising in their Venza crossover and mountain biking with friends. While it is unfortunate that advertisers find it necessary to have one generation take it on the chin to positively portray another, we can see a new story of what older age can be is beginning to take hold.

Even the notoriously ageist business of beauty is showing a glimmer of hope. Recently, the women’s magazine Allure announced that it will no longer use the term ‘anti-aging.’

A new lifestyle is being invented by the burgeoning wave of aging consumers. Businesses can let themselves be left behind in the undertow, or they can work to develop innovative products, services and experiences that give shape to a new way of living in old age.

The real barrier to achieving market success in the longevity economy is not the older consumer’s stodgy ways, but that existing products and services fail to thrill. It’s clear that business has the license to thrill older consumers; but is it innovative enough to use it?

Joseph F. Coughlin is director of the Massachusetts Institute of Technology AgeLab and a 2015 Next Avenue Influencer in Aging. He is also author of “The Longevity Economy: Unlocking the World’s Fastest Growing, Most Misunderstood Market.

This article is reprinted by permission from NextAvenue.org, © 2018 Twin Cities Public Television, Inc. All rights reserved. It is part of the Milken Institute Center for the Future of Aging series, The Business of Aging, running on Next Avenue weekly over the next few months. The essays are a companion piece to the center’s new report, Silver to Gold: The Business of Aging.