What Marketers Should Know about the ‘Longevity Economy’
About a year from now, the portion of the U.S. population over the age of 65 will out-number people under the age of 15 for the first time ever.
These aging Americans are not only the largest consumer group, but they hold approximately $3 trillion in spending power, excluding health care.
Why then are so many businesses overlooking this powerful group of people? In most cases, companies that develop products and services aren’t aware of this group’s needs or have simply overlooked the marketing power of seniors.
So what do marketers need to know about the senior demographic?
They have spending power
You’re probably thinking: what needs to change? Consumers in the longevity economy are just interested in walkers, medicine and incontinence products, right? Wrong.
Generally, consumers over the age of 50 purchase most of the same things as people in other age groups. According to AARP’s study “The Longevity Economy” by Oxford Economics, consumers over 50 dominate 119 out of 123 consumer packaged goods segments. Their spending represents 46 percent of the U.S.’s gross domestic product. And to top it all off, they have more brand loyalty than any other generation, especially the older members of the group. That’s why it’s vital for companies to begin understanding the aging population and catering to their needs if they want to take advantage of the aging population’s buying power.
Another common misconception is that this demographic only spends money on health care. However, out of the $4.6 trillion this demographic spends, only $1.6 trillion of it is on health care and/or health-care-related items, according to the same AARP study. A majority that $1.6 trillion is spent in the last couple of years (or even months) of their life. Many companies spend most of their marketing efforts on the 18-44 demographic. However, this group does not have as much disposable income, and the span of this consumer group’s spending is only 26 years compared up to 35 years that represents the 50+ demographic.
Life stages change after 50
Next, it’s important to understand that the life stages after age 50 change in many ways, and for many reasons. This can dramatically affect a consumer’s behavior. Understanding the thinking and behavior of each stage of development of a person over 50 will give companies a leg up on their competition and help them acquire and retain consumers.
Companies who include the voice of the consumer early in the product development process build a better and more sustainable product. By including the consumer in all stages of development, you’re increasing your chances of success. You have their voice, feedback and insight right from the beginning rather than assuming what that they want, need and are willing to spend their money on.
People over the age of 50 have lived life and experienced many different things. Their families and careers have dictated much of what they’ve done with their lives and now, many of these needs are gone, allowing them to see new choices and directions that are open to them. Companies who show they value this highly ignored demographic will unlock insights and consumption from the fastest growing market segment on the planet.
They use technology
Given all of these insights, my firm, Link-age aims to continue understanding this rapidly growing demographic. One of the ways we do so is through simply asking them questions through surveys. Recently, we asked a variety of questions about a variety of topics such as lifestyle, technology use and online habits. So, we surveyed older adults between the ages of 65 and 100 living in a variety of settings, affiliated with more than 500 senior living communities in 16 states who comprise our survey pool.
What we found is that America’s seniors are more savvy and vibrant than most would expect, especially when it comes to technology. They’re clearly interested in technology that fits their needs, and behaviors. Our study results show there is both a market and appetite for products and services that meet the unique needs of this vital age group.
So what’s the point? There are a lot of misconceptions regarding the senior market and companies who don’t look carefully at this population are missing the chance to capitalize on a powerful and growing group of consumers. Not to mention benefit from the $7.1 trillion in economic activity generated annually by people over the age of 50.
This article was written by Scott Collins and published on PR Daily.
Scott Collins is the president and CEO of Link-age, a member-owned corporation focused solely on helping organizations succeed in the aging population marketplace. Link-age is made up of more than 500 senior living communities in 16 states that serve approximately 350,000 adults, providing their members and customers unparalleled purchasing power and research access.
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