Companies both old and new devote endless time and energy trying to figure out how to appeal to younger generations like Millennials and Gen Z. But what about the older generation?
The global population is rapidly aging and by 2030, 23 percent of the developed world will be considered “elderly” or over the age of 65 years old. This trend is particularly pronounced in the United States, where Baby Boomers are aging. In 2030, the elderly will represent 20 percent of the U.S. population and for the first time in the country’s history, there will soon be more elderly adults than children.
The aging of the country’s population has long been viewed as a crisis. How will a relatively small number of workers in the U.S. be able to produce enough to live well themselves and also pay the Social Security benefits for this huge population of retirees?
This “crisis” is further exacerbated by the negative portrayal of the elderly population in general. Society stereotypes the elderly as a homogeneous group that’s frail, unhealthy, dependent, not-tech savvy, and frugal, among other things.
Unfortunately, brands and advertisers reinforce these negative stereotypes. The marketing “cut-off age” is 49 years old and only 15 percent of media images include someone over the age of 50. The situation is even worse in venture capital, where less than 1 percent of tech products and services bought by and for people 50+ years old is backed by VC dollars.
These changing demographics present an opportunity hiding in plain sight, but if companies don’t shift their generalized and negative perceptions of the elderly population, they stand to miss out on a chance to deliver innovative solutions tailored specifically for this demographic.
The 50+ population spending is estimated to triple in 2050
How can brands shift outdated perceptions on this group of consumers and capture some of those dollars? As we’ve previously discussed, brands must adopt a consumer-centric approach that begins with understanding who the target consumer is and what their pain points are.
The elderly are more nuanced than society’s negative stereotypes imply because fundamentally, aging affects everyone differently. Furthermore, being “old” today looks very different than it did in the past because life expectancies have increased.
Rather than age being a primary characteristic, the elderly should be thought of along an age continuum. From a health perspective, the typical progression of functional limitations progresses from mobility issues (walking, climbing stairs) → hearing issues → difficulty with Instrumental Activities of Daily Living (IADLs; i.e., errands, housework, meals) → cognitive issues (memory, concentrating) → vision issues → difficulty with Activities of Daily Living (ADLs; i.e., dressing, bathing, grooming).
While the concept of aging involves moving further along the age continuum, society and brands often associate the elderly population only with poor health that occurs toward the end of the age continuum. But this represents only a small subset of the population.
U.S. Census data indicates that only 3 percent of the elderly population live in nursing homes and of those living at home, only 18 percent need help with IADLs while 11 percent need help with ADLs.
Most companies are overlooking the opportunity with a majority of the elderly population that is affluent, living at home, and in good health.
While the segment of the elderly population that is further along the age continuum requires more healthcare-related solutions to address their pain points, the “younger” old do not. But because the elderly population is thought to be homogeneous, the “young” old are left trying to cobble together products and services that weren’t designed for them in mind.
Facebook, for example, was built by and for Millennials, but the elderly have adopted the platform as a way to communicate and stay in touch with friends and family. Airbnb is another example that was built for Millennials, but the company’s fastest growing age group of both hosts and guests is 60+ years old.
If companies continue to perceive the elderly demographic through a dated lens, they’ll miss an even greater opportunity in the next 10 years due to the sheer size of this group.
The elderly are:
- Living longer and in better health than ever before. The average life expectancy has increased 30 years over the last century.
- Staying in their homes longer. 90 percent of people older than 65 years old want to stay in their home as long as possible and nursing home occupancy rates have been trending downward.
- Have greater tech adoption. Baby Boomers’ Internet and social media usage as well as tablet and smartphone ownership is more similar to that of younger generations than the Silent Generation.
- Have increased spending power. Baby Boomers control 70 percent of disposable income in the U.S.
- Are working longer. 70 percent of Baby Boomers expect to or are already working past the retirement age of 65
The elderly also want differentiated experiences. Interestingly, the concept of old age and retirement has always been about enjoying experiences, although many companies don’t think of it in this way.
Baby Boomers are also notable because they grew up post-WWII during a time of social movements and are counter-culture to their parents, who worked hard and saved their money. The 65+ age group spends the most amount of time on leisure activities and those 50+ years old spend $90 billion on cars, which is 28 percent more than younger consumers. One-third of Baby Boomers shop online, spending $7 billion annually and Baby Boomers spend more money on entertainment, personal care products and services, and food than Millennials.
If companies invest the time to better understand the nuances of the elderly population, they will find there’s an opportunity to unlock significant value by addressing the more nuanced needs and pain points of this demographic that has been largely overlooked.
Those companies might find their addressable market to be larger than expected, as younger generations may look to adopt the products and services as well as a way to stay connected to their parents and grandparents.