A question for every startup: ‘What’s your 50-plus strategy?’
by John Burgess, AARP Bulletin, November 2013 Imagine an economy that ranks No. 3 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 off 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 levels.
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. Founder and CEO Halsey Schroeder got the idea after trying to help her mother shop online for the kinds of clothes she’d long bought in upscale department stores. “She pointed out that all these sites — they’re so young, they’re so flashy. There wasn’t anything that appealed to her.” Halsbrook, launched in September last year, has a site that’s as non-flashily elegant as the labels it offers. Experienced consultants are available by phone, email or live chat to help customers make their picks. Clothes are shipped with handwritten notes enclosed. 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 percent of the 55-plus population now owns an e-reader, not far from the 27 percent rate of people ages 18 to 24. And the 55-plus audience is roughly 2 1/2 times bigger, meaning that many more sales. The math is sinking in with marketing strategists, says Shawn DuBravac, chief economist at the association: “Manufacturers and service providers are giving that cohort more attention than ever before.”
The Longevity Economy
- Boomers have 80 percent of the U.S. net worth
- Boomers pay $420 billion in federal taxes
- Boomers drive 25 percent of e-reader sales
For people who have reached their slow-down 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. The company has a second service that attempts to include the older parent in Facebook culture without joining Facebook. Photos newly posted on the social media site are automatically printed on old-fashioned paper and sent by U.S. mail to the parent. Clayton Lewis, a partner at the venture capital firm Maveron, which is helping launch Lively, says this prolongs what’s often been a lifelong pleasure for the 70-plus generation, going to the mailbox and finding something good. 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.