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Study: Product Innovation Lags for Elders

Posted on: Friday, 24 March 2006, 09:00 CST

By Reiter, Duff

By now, everyone knows that the older population is huge and holds most of the financial assets of the United States. Furthermore, Americans know that a major influx of boomers will be aging into this already large and powerful group. But if these facts are an economic given, where are the new products specifically designed for elders that should be flooding this market?

Although there has been plenty of discussion about how products are marketed to older audiences, very little has been said-outside of a few obvious industries, such as retirement finance-about why businesses do not develop more and better products for elders. Exploring this question was our impetus for a new study titled 50 Perspectives on the 65+ Population: What They Want, What They Need.

THE 65-PLUS MARKETPLACE

We at Verve Marketing, based in San Francisco, sought to leam both from consumers of elder-oriented products as well as those who are in the best positions to evaluate new product ideas. To this end, we interviewed 50 individuals, including older people, adult children of elders, nonprofit agency directors, social workers, clergy, physicians, demographers, journalists, financial advisers and executives across the spectrum of businesses catering to older adults. Their aggregated responses provide a snapshot of general concerns and unmet needs. The individual responses provided us with specific ideas and concepts that may help shape the discussion over changes that are long overdue in the 65-plus marketplace.

At the outset, we believed our study would elicit a wide range of business ideas; instead, most of the ideas clustered around a central theme. Four services emerged that form a sort of infrastructure for older individuals and the businesses serving them. An unexpected finding of the study suggests one reason the olderadult market gets little attention: Many products cannot be sold profitably to elders without an established infrastructure of information, transportation and assistance with daily chores. As one of our informants, an adult child of an elder, put it, "Seniors need services more than products. My own experience is that informational services are incredibly important."

The most frequently mentioned idea was a telephone service that would look up information from top databases and also provide unbiased expert advice. Many older people spend significant amounts of time trying to find information about, for example, generic equivalents of pharmaceuticals, or answers to questions that others might easily resolve with an Internet search. Some older people never get comfortable with buying new technology or deciding on a financial service because they need expert, trusted advice to move forward. Lack of credible information is still a major issue for many older adults.

MORE KEY IDEAS

Closely related to the telephone-service idea is a senior-vetted seal of approval, also from an unbiased and trustworthy source. With smaller social circles, concerns about unscrupulous businesses that prey on older consumers and less contact with the world outside their homes, older people may be more hesitant to try a new product without a strong, reliable recommendation.

An idea frequently mentioned by adult children was a car service that combines elements of paratransit, taxis and limousines. As people reach later ages, many are relegated to their homes except during large planned group excursions or visits with relatives. Entertainment, dining and general social opportunities that younger people take for granted are less available to elders, who may, for example, curtail their driving.

The other key infrastructure concept frequently mentioned by study participants was a concierge service that would assist consumers with tasks that adult children would normally do if they lived closer or were not working or traveling. This service could save adult children time and money by taking over mundane tasks for elders, such as transporting larger items to their homes, or getting help installing and learning to use new equipment and technology.

HOUSING

The study also identified several product ideas that could thrive without an infrastructure of information, transportation and reliable assistance. We heard numerous ideas for senior housing, for example. Participants suggested senior housing solutions that coalesced around the concept of an affinity-based community where all residents have something in common, such as being alumni of a particular university, sailing enthusiasts, retired teachers or former public safety officers. These planned communities would be small, situated within larger communities, and connected to multigenerational contemporary life. Volunteer activities would be integral to the housing experience. Food preparation would include such options as private kitchens, shared cooking responsibilities and a traditional cafeteria. Housing would also include transportation.

Elders would act as their own building consultants and conduct their own marketing to attract compatible neighbors through newsletters and websites that are already part of their shared interests. Apart from the obvious benefits of being able to create housing for an entire community with special requirements, developers could sell neighboring real estate to very targeted commercial interests.

Nationally advertised nutrition and fitness programs, such as the Atkins Diet, Jenny Craig and 24-Hour Fitness, are not suitable for older people with health conditions and daily medications that might complicate fitness and nutritional needs. Several study respondents described flexible variations on these services, with elements customized for people with such chronic conditions as diabetes and osteoporosis. A science-based program of packaged foods, supplements and homegym equipment, for instance, could be designed with realistic goals, and provided with directions that are easy to understand and follow. Diet and exercise are already huge, profitable categories in marketing. Related business opportunities might involve health plans, spas, gyms, vacations and so on. Both word of mouth and traditional marketing could drive this elder- specific concept.

FIVE RECOMMENDATIONS

With the 50 Perspectives study, we sought to discern why older consumers are not being better served despite their importance in the rapidly changing U.S. economy. Because of the timing of the study, we also heard thoughts and opinions about the substantial changes currently underway or being debated for programs that affect elders, including Medicare and Social security. Out of this potent mix of business and public-policy concerns came some interesting ideas about how both businesses and older adults could benefit by changing the way they interact with each other. Following are five recommendations we distilled from the study participants:

* Many adult children are finally ready to pay for services they don't have time to do themselves. They recognize that state-run programs are being severely curtailed and can no longer be dependable safety-net providers.

* If businesses want older people to get excited about their products, they should incorporate elders in the productdevelopment cycle more meaningfully and naturally. Product development and testing might also be undertaken by a major educational institution. An academically based senior lab, for example, could be modeled on the Media Lab at the Massachusetts Institute of Technology in Boston.

* Housing for elders, which should be a public-policy concern as well as an economic issue, needs to be linked to services from the start in ways designed to keep older people active and involved in the larger community. The result will be that older adults can postpone the need for more expensive and institutional services until they are truly frail.

* Instead of outdated, general, inspirational statistics about the percentage of wealth controlled by older people, both businesses and policy makers need factual, current, actionable data about what the older population is doing with its wealth, apart from relying on the equity of their paid-for homes. Specifically, we need to learn how elders' decision-making process affects their buying habits.

* Pharmaceutical companies, in particular, would benefit from less profittaking and more dialogue with older consumers. If the pharmaceutical industry continues to lose the trust of the aging population, it will not survive in its present form.

Why hasn't business developed more and better products for older adults

Duff Reiter is the president of Verve Marketing and Aaron Vance is the company's research director. They can be reached at duff@vervemarketing.com.

Copyright American Society on Aging Jan/Feb 2006

Source: Aging Today

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