“Most companies spend the bulk of their time trying to figure out what people aged 18 to 44 want,” says Scott Collins (pictured), president and CEO of Link-Age. He notes that little attention is given to the over-50 market and it is assumed that, once consumers hit age 65, their marketing preferences don’t change for the rest of their lives.
But, Collins notes, this is a huge mistake. He points to a 2013 Oxford Economics study [PDF], commissioned by AARP, which calculated the buying power of U.S. consumers over 50 at $4.6 trillion, compared with $800 billion in purchases by the 18 to 44 age group. The study also revealed that older Americans are the dominant market force in 119 of 123 categories of packaged goods. Collins says, as of 2015, there will be more people alive over 65 than under 15 for the first time. “And it’s going to remain that way.”
Link-Age, which is owned by 16 not-for-profit senior living providers, started in the 1990s with Link-Age Solutions, a purchasing group that allows its members to reduce costs and improve quality through the power of volume purchasing. Realizing that seniors were a vastly underserved market, the company added a second arm, Link-Age Connect, which conducts market research to help companies of all sizes reach out to consumers over 65.
The combination of aging baby boomers and the fact that humans are living longer on average is creating a demographic tidal wave. “This aging population is going to impact every industry,” Collins says. “There is huge opportunity, for MBAs, for entrepreneurs, for innovators.”
He notes that seniors have “tremendous spending power and the desire to consume products.” Link-Age branched out again to help entrepreneurs take advantage of this huge potential market. The company added a third arm, Link-Age Ventures, to provide investment capital for companies whose products or services are geared toward seniors and their caregivers. In partnership with investment banking firm B.C. Ziegler, Link-Age created the Ziegler Link-Age Longevity Fund, which has over $26 million to invest in B and C funding rounds for cutting-edge companies serving the “longevity economy.”
Businesses need to reframe their understanding of the aging consumer, says Collins, adding, “It’s not all about chronic disease and aging and decline.” For those entrepreneurs who want to take advantage of the opportunity to get in on the ground floor of an underserved market, he says, you must “understand that, as large a marketplace as it is, it’s very new.”
“There are still new business models emerging,” says Collins. “It’s not for the impatient.” He advises entrepreneurs to “really spend time understanding the consumer and the customer and how you want to position your product or service or technology. It’s a very different space, and it does take time to understand.”
To simplify the process, Collins suggests engaging seniors themselves in the early stages of design. “Don’t ignore the consumer and make assumptions about what they want because more often than not those assumptions are wrong,” he says. “If [entrepreneurs] take the time to really get in touch with the demographic, it will position them well for success.”
Photo of Scott Collins courtesy of Link-Age.