A question for every start-up: ‘What’s your 50-plus strategy?’
Boomers pay ...
in federal taxes
Boomers are ...
driving 25% of
population in the
U.S. is the third-largest economy
in the world.
Boomers have ...
80% of the
U.S. net worth
You Are the New Economic Dynamo By John Burgess
Imagine an economy that ranks number three in the world, after the United States and China. It’s got more than 100 million consumers generating $7 trillion a year
in goods and services. They’re generally better of financially,
with special interests in health, exercise, leisure travel, Internet shopping and digital gadgets.
Every year, their numbers and
buying power expand.
This is the 50-plus population in
the United States—call them the
“longevity economy.” Whether
working or spending retirement
dollars, older Americans are one
of the country’s prime engines of
commerce and jobs. In entertainment, apparel and other important
sectors, they account for close to
half of all spending. They hold 80
percent of the country’s personal
net worth; they pay $420 billion a
year in federal taxes and $250 billion at the state and local level.
Yet they don’t get the respect
these numbers should command,
from either Washington or corporate America, says Jody Holtzman,
senior vice president of thought
leadership with AARP. Holtzman
is a key member of an AARP campaign trying to change those perceptions by showing that older Americans are a huge, unified
market that more than pays its way in society and can handsomely reward companies that grasp its importance. To truly
tap the longevity economy, Holtzman says, companies need
to provide product lines specifically tailored to the tastes and
needs of older Americans, helping them lead active, satisfying
lives for as long as they can.
New opportunities. Some companies have recognized
the opportunity. Fashion chains such as Chico’s and NYDJ
have built national brands by catering to women who have
long left their 20s behind. The chains’ catalogs and websites
feature stylish models who look to be in their 40s and 50s.
Newly founded Halsbrook is tapping the older apparel market with online-only sale of chic, high-end attire.
The $200 billion-a-year consumer electronics market has
also found ways to tap into this audience. E-readers such
as the Amazon Kindle and Barnes & Noble Nook have done
well from the start among the older demographic. Surveys
for the Consumer Electronics Association show that 25 per-
cent of the 55-plus population now own an e-reader, not far
from the 27 percent rate of people ages 18 to 24. And the
55-plus audience is roughly 2½ times bigger, meaning that
many more sales.
Not surprisingly, many of the emerging products and services are health-related, but with a
goal of keeping people at the top of
their game, not treating ailments.
Wende Hutton, general partner at
venture capital firm Canaan Partners, says she sees new investor
interest in health-related products
that the consumer, not insurance,
pays for. ReVision Optics has developed an “inlay” that is surgically
inserted over the pupil to eliminate
the need for reading glasses. It’s
available now in Japan and Europe
but still undergoing regulatory
evaluation in the United States.
New technology. For people
who have reached their slowdown years, other firms are deploying advanced technology to
help them age in place. For instance, Lively Inc. of San Francisco
is beta-testing sensing technology
to foster safety and connectivity
for older people living alone. Low-cost motion detectors are placed
around a home—on, say, the refrigerator,
the medicine cabinet and the front door. The
devices report wirelessly to a small central
unit, which remembers the resident’s daily
routine. If the pattern is broken, the unit
sends out word—a text message to Dad reminding him to
take his pills, perhaps, or to a boomer son or daughter saying that Dad hasn’t been out of his apartment for a while.
Still, too many business leaders “can’t get away from cultural biases about aging that really go back to the early 20th
century,” says Holtzman. He’s determined to keep up the
forces of change. A key objective: Build interest among the
country’s venture capital firms, which have hatched many
breakthrough technologies. He’s pushing investors to pose
a particular question to every start-up that comes calling:
“What’s your 50-plus strategy?” ;
John Burgess is a Washington-based journalist and author
specializing in financial issues.