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When aging provides a business opportunity

Last updated on: May 8, 2013 11:38 IST

When aging provides a business opportunity

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Mark Miller

The aging of the population is creating market demand for new products and services at an unprecedented pace.


Gary Bates was an airline pilot for 37 years, and in his last few years on the job, he noticed older travelers having trouble with the whole experience: the security lines, the delays and the increasingly expanding airports.

Those observations became the inspiration for Care-to-Go, a company he launched with his wife, Beth, in 2009, which provides a caregiver to make the trip with an elderly passenger or others who have special needs when they travel. The couple also launched a sister company that provides in-home care to seniors.

"We looked at a lot of opportunities, but thought there was huge upside in a business helping aging baby boomers, especially in Florida and Arizona," says the 69-year-old, who is now based in Phoenix, Arizona.

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Image: Inset: Gary Bates.
Photographs: Reuters

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When aging provides a business opportunity

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The companies launched by the couple are typical of the small businesses started by older entrepreneurs, who often leverage years of work experience, combined with an insight into the needs of older consumers.

The aging of the population is creating market demand for new products and services at an unprecedented pace - and the numbers are startling. In 2010 there were 375 million people over age 60 in the United States, Northern Europe, Japan, China and India, according to Dick Stroud, a UK-based marketing consultant and author specializing in the 50-plus market.

By the end of 2030, that number will have nearly doubled. And the growth in their spending power will outpace that of every other age group, Stroud says.

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Photographs: Reuters

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When aging provides a business opportunity

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Opportunities abound

The challenge for would-be entrepreneurs lies in identifying the right market opportunities. For wealthier seniors, that means a focus on luxuries and improving quality of life; among lower-income seniors, services will focus more on cutting costs.

"The US, like Europe, is going to have a large group of older people who will be forced to make substantial changes to their living standards because they lack the necessary pension and investments to maintain anything like their pre-retirement standard of living," Stroud says. "There will be ultra-fragmentation - some products and services aimed at the wealthy, and others where price is a dominant factor."

Stroud is co-author of a recently published book, "Marketing to the Ageing Consumer: The Secrets to Building an Age-Friendly Business" (Palgrave Macmillan, January 2013). His book lays out the case that older people will be the primary drivers of consumer spending over the next two decades in the world's most important economies.

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Photographs: Reuters

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When aging provides a business opportunity

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The best startup opportunities in the US market are in wellness, healthiness, fitness and medical self-help, Stroud says. "My guess is that this only applies to about 20 per cent of the older age group, but they will be the most affluent and informed about the issue affecting their bodies," he says.

Stroud also sees entrepreneurial opportunities in fields including vision and hearing care - for example, technology and design that improve the appearance of hearing devices, or that boost the audio of devices like telephones and smartphones.

There also are some less-obvious opportunities, including products that can generate familiar and reassuring smells or change the way food tastes - aimed at people who suffer from memory loss.

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Photographs: Mario Anzuoni/Reuters
Tags: Stroud , US

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When aging provides a business opportunity

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Travel help

When Bates retired at age 60 from American Airlines, he had plans to focus on entrepreneurial opportunities and spent some time investing in real estate and consulting in Florida. But after the real estate crash of 2008, he and wife Beth started from scratch again.

That is when they hit exactly what Stroud defines as the sweet spot, supported by Gary's experience in the airline industry, and Beth's 30 years as a caregiving professional. Care-to-Go serves older people with mental or physical impairments. It charges a day rate ranging from $200 to $400, and customers pay all of the travel companion's expenses. "We'll fly Grandma to the East Coast and back for Christmas," Gary says.

The company also helps seniors who are moving to assisted living facilities to be closer to family members.

"A lot of people think they can put someone like this on a plane at one end, and have someone pick them up at the other end," Bates says.

"That's fine if everything works out. But when I was flying, we might have a flight cancellation or a weather problem that forced us to land at a different airport. Now you've got a senior who can't fend for himself sitting at the wrong airport all by himself."

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Photographs: John Voos/Reuters

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Although Bates declined to discuss the companies' success in terms of revenue and customers, he says the ventures are growing. He is looking to add more cities for the home-care business, and possibly franchise it.

While the strategy can bring success, Stroud has a word of caution for boomers who get the urge to start an age-related business based on their own experience: be careful.

There is nobody more evangelical about a product or service than someone who has a very deep personal involvement. "But sometimes people don't think through the hard commercial issues to see if there really is a profitable business," Stroud says.


Photographs: Karoly Arvai/Reuters
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