White paper: 8 sectors to be disrupted by Longevity

Angela Tyrrell, SVP, Longevity Leaders

Longevity is one of the most important and disruptive trends of 2020. We are living longer than ever, but how we age is changing dramatically. Baby Boomers are actively aware of the later life challenges experienced by their own parents, and of the challenges that they themselves experience as their primary carers. They are making the lifestyle changes needed to ensure that their finances, health and wellbeing are optimised in later life, and that their children’s lives are better for it.

As a result, our ageing populations are becoming healthier, more active, more socially connected and more financially secure. It has been estimated that Americans over 50 control 76% of disposable income and drive 50% of all spending. Over the next twenty years the spending power of this group is expected to exceed $4 trillion. Looking beyond the numbers, Baby Boomers are demanding more from later life, and the products and services on offer for them. This offers both a tremendous opportunity for businesses willing to recognise and seize it, and a threat for those that ignore it.

A good example is the tech industry. Although traditionally associated with youth markets, big tech companies have quietly identified and been providing for a newly active, engaged and wealthy ageing customer. Apple’s Apple Watch Series 5 now contains a number of functions to assist ageing consumers, including fall detection, an EKG monitor, international emergency calling and a Noise App that helps users to understand ambient sound levels in environments that could negatively affect hearing. But those tools are useful for everyone, I hear you cry! Well yes, that’s the point. As the Ford Focus proved years ago with larger, brighter dashboards and comfortable ergonomic seats, what’s good for an ageing customer is good for all consumers.

Apple aren’t the only tech company making subtle changes to provide for an ageing consumer. In 2018 Amazon’s health team were reported to be in talks with AARP – the not-for-profit organisation set up to “empower people to choose how they live as they age” – about making products for older people. Television adverts for Apple’s Siri, Amazon’s Echo and Alexa or Google Home make clear that an ageing demographic forms a core target market for smart virtual assistants. Samsung are working with software start-up Zone-V to provide an age-friendly user experience on their smartphones. Over-55s in the UK now spend more time on Facebook than 18-24s. And let’s not forget that the World Wide Web was invented by a Baby Boomer in the first place.

This quiet change in the tech landscape begs the question: which other sectors are likely to be disrupted – or even saved - by longevity?

1. Retail

Retail is a sector in crisis. The bricks and mortar business model is under serious threat of extinction, and most high street retailers are still struggling to commercialise digital distribution to a satisfactory level. Meanwhile younger generations are demanding ethical and sustainable (and more expensive) manufacturing practices and materials, and increasingly choosing to spend on recycled fashion or with ethical independent brands over traditional retailers.

Meanwhile, recent work by the International Longevity Centre suggests that spending on fashion and beauty by people over 50 in the UK will increase by £11bn (or 60%) between 2019 and 2040, making them the retail sector’s key consumer base in that time. Older consumers also tend to exhibit more consistent brand loyalty to retailers who have served them well over the years, and place greater value on the physical space and sense of community that well-loved brands can provide. But it’s not all about bricks and mortar for older consumers. Recent numbers from BI Intelligence suggest that they are also spending more time online, and spending a larger proportion of that time online shopping compared with their younger counterparts.

Rather than disrupting retail, I would argue that older consumers have the ability to save retail. But retailers still need to adapt if they are to benefit.

Firstly, a shift in mindset about what an “ageing customer” wants to buy is needed. Contrary to popular belief, that is not (unsurprisingly) a preference for frumpy clothing or unattractive mobility tools marketed with a slightly patronising tone. Secondly, retailers need to get beyond “over 50s” as a target market and segment that group with the same attention to detail as “under 50s” when devising offerings. Thirdly, retailers should look not at where these groups spend their money, but at how they prefer to spend their time. Whether it is a preference for the sense of community that a store can deliver or the peace of shopping online from home, the physical shopping experience needs to be better tailored towards an ageing demographic.

2. Travel and tourism

Since retiring four years ago, my parents have been to Belize, Jamaica, Mexico, Russia, Egypt, China and South Africa, in addition to the more traditional destinations in Europe and the United States. Currently they are planning their 2020 trips to Sri Lanka and Cuba. My 88-year-old grandmother just returned from an adventure in Indonesia and Borneo. My mother-in-law and her disabled partner spent last April traipsing through India. None of them are naturally intrepid people, and having expendable income for the first time in their lives have spent it ensuring that they feel safe and comfortable during those trips. Although my mother books most of it herself online she still pays a travel agent to make sure that she has someone she can contact in emergencies. The whole sample size (admittedly of just five people) agree that there is no travel option less appealing to them than a cruise.

I can safely say that the older generation of my family contribute vastly more to the global travel and tourism economy than the younger ones, who are restricted by time, money and young families. No business class or month-long holidays for us, we go for a week, and on a tight budget. And yet travel marketing to anybody older than parents of youngish children seems to fall exclusively towards cruises, golf retreats or package deals. Travel and tourism are missing a massive opportunity.

As with retail, travel and tourism providers need to appreciate that “over 50s” or “retirees” are not a single customer segment, but a richly diverse collection of different types of travellers. At the very least, there is a huge difference between the travel needs and desires of an active 65-year-old and their 90-year-old parent. It would also do to remember that in many cases the offering doesn’t need to change, just who it’s being offered to and how.

3. Insurance

Converse from many of the other sectors in this list, I would describe the insurance sector as “engaged” in the longevity opportunity. It makes sense, this is a field that has always been interested in how people age and how long they live, whether providing life, health or pensions insurance. But insurers can’t realise the longevity dividend on their own, they need others engaged to really maximise their own opportunity in this space.

For example, they need corporate employers to understand the reality of an ageing workforce, and the responsibility that they have to help their employees age well physically, mentally and financially. Once accepted employers can look to insurers to help them, whether that’s providing more comprehensive health services to employees helping to improve general wellbeing and reinforce healthy behaviours or insuring large portions of their longevity risk to ensure that pension members are guaranteed a financially stable future.

There is a lot of talk in insurance circles about what sorts of new products might better support an ageing society. An interesting area ripe for disruption is financial advice. Planning for retirement is a complex affair incorporating multiple pensions, asset management, housing, future health and care provisions and legacy planning. Few of us have been asked to look at our assets with this degree of detail while we’re earning and lack the experience to make informed decisions. Professional advice is expensive. There is an opportunity for financial institutions such as insurers to fill this gap, barring complex regulatory considerations. The emergence of increasingly sophisticated algorithmic tools might provide a way to bring costs down while providing better advice to customers. Generally, this is an exciting field and one I look forward to seeing develop. providing better advice to customers.

4. Retail banking

Retail banks are a funny one because they tend to think they have longevity covered. In fact, my research suggests that they are still missing the mark. Customers of a certain age are accounted for by the bank’s Vulnerable Customers programme. There’s a problem here on two fronts. Firstly, this is falling into the old stereotype that old age equals vulnerability. As the insurance sector understands, being older and closer to or in retirement actually drives far better understanding of one’s personal finances and associated risks and opportunities. A great many older banking customers won’t consider themselves as vulnerable. Rather, many think of themselves as informed and proactively financially responsible. They also tend to hold vast amounts of wealth relative to their younger relations. By classing these engaged, wealthy older customers as “vulnerable” banks are missing out on developing targeted products and services to suit their specific needs.

There’s no getting away from the fact however, that many older people do fall within the Vulnerable Customer remit. But herein lies the second problem: the practices in place to protect these customers don’t seem to be working. Crime figures analysed by AgeUK suggest that an older person becomes a victim of financial fraud every forty seconds. Gone are the days when our bank manager knows our name and the details of our life and lifestyle and would be in a position to personally detect and intervene any suspicious behaviour.

Banks have a couple of options here, and they don’t necessarily need to be mutually exclusive. Banking itself has already seen massive disruption in the past ten years with the rise of fintech. Within this field lie some interesting fraud detection
and management tools specifically designed for the longevity market. Applications like Kalgera allow family members to safely detect and action unusual activity on older relatives’ bank accounts. Banks have an opportunity to develop or partner with fintech tools offering more personalised fraud detection.

The other option is developing a new version of the old model of actual in-person personalisation. Remember that bank teller who used to know everyone’s name? As with retailers, banks have a unique opportunity to provide a physical touchpoint with customers. Tweaking that user experience could pave the way for better customer service, better brand loyalty and ultimately more customers, not just among older consumers but among all consumers.

5. Advertising and media

There is growing awareness that traditional representations of older adults in advertising is off. The assumption has typically been that older consumers don’t switch brands or change habits, so marketing to them is a waste of time and resources. When older adults are portrayed in advertising it tends to be either sat in front of the television sad, helpless and lonely, or walking hand in hand along a beach ironclad in linen, or perhaps taking a swing on the golf course. One of the identified problems with advertising is that it tends to be staffed by youngsters who lean towards these stereotypes having no experience of it themselves.

There has been a change in attitude in the advertising sector, mainly as executive staff begin to hit that “over 50s” milestone and realise that they don’t see themselves represented in their own work. But advertising agencies are still at the behest of their clients. Clients who typically want to build their profile among younger consumers. As with insurance, advertising can’t seize the longevity opportunity without bringing others along for the ride.

Disruption does seem just around the corner, however. In 2019 the BBC reported on the rise of Instagram “granfluencers” living and posting with attitude. Also, in 2019 Getty Images published the Disrupt Ageing Collection, a series of stock photos presenting the diversity and holistic nature of growing older. Helen Mirren, Emma Thompson and Jane Fonda were among the actors portraying imperfect, complex and interesting older characters on the big screen. The prevalence and representation of ageing in the media is changing, and with it will come major disruption to the worlds of branding and advertising.

6. Beauty

The longevity market is already driving disruption in the beauty sector. Beauty is an industry highly connected to its customers and foresaw the shift away from “ageing” and towards “longevity” a few years back. Now instead of anti-ageing products, consumers can obtain products that “restore glow” or “improve firmness and elasticity.” Beauty brands are confidently displaying older models (although still predominantly female) and have tapped into the positivity of ageing. This is one sector that has embraced the value that an older consumer base can bring.

Perhaps the next wave of disruption for the beauty sector in the context of longevity will be more closely aligned to the field of ageing science. Traditionally beauty companies have shied away from claims that may see their products regulated as therapeutic or pharmaceuticals. However most big brands run extensive Research & Development laboratories for whom emerging insights into ageing pathways is interesting. The development of therapeutic products based on biological ageing pathways could be a game-changer for beauty.

7. Wellness

Wellness is another sector that is starting to change with the emergence of a longevity economy. Evidence from the ageing science community continues to stress the importance of things like exercise, diet and nutrition, mental health, sleep and even certain supplements like metformin on longevity and healthspan. The more evidence published the better educated consumers become on the role that they have to play in their own longevity. This is driving a booming wellness market, as people embrace lifelong healthy practices to help them “age better.”

That said wellness is still seen as the domain of the young and the sexy. When applied to an ageing population the language tends to change, prioritising disease prevention and healthy life extension, not bad concepts but not exactly inspirational. For older people, wellness is still seen as a government rather than commercial remit. A major opportunity lies at the intersection of wellness and longevity that will only be fully realised when an ageing consumer is embraced. Wellness could learn a lot from the beauty sector in this regard.

8. Medicine and healthcare

Yes, medicine and healthcare. The most obvious. And the most challenging. Without good health and access to good healthcare, none of the above happens. This is the sector that, regardless of geographical region, will be under the most pressure to adapt to an ageing population.

There are some promising signs. Governments around the world have recognised the importance of basic health education to retain health in later life. Businesses are starting to recognise their obligation to keep employees happy and healthy and are offering services accordingly. Digital health platforms and telemedicine are providing access to cost-effective healthcare to those who might previously have missed out. Tracking and testing tools are helping to drive proactive health management at an individual level. Preventative health is an important component of the ageing story, and one that seems to be moving.

But prevention doesn’t address the major problems in areas like long term care or chronic disease management. These desperately need to be tackled to support an ageing population for whom preventative measures have failed, or never reached. The ageing science community will say that this is what they are working towards, that they envision a world where we have therapeutic interventions available to stop chronic disease or the need for long term care. A cynic might question the availability of these therapies to the general population, or at least their expected timeline for delivery (at best five to ten years).

For me, this is the sector that is most likely to be disrupted because it is in the most critical need for disruption. The field of ageing science and upstream intervention offers the most legitimate path forward. But it will require a huge shift in mindset from healthcare providers, from drug companies, from policy makers and from the general public, as well as responsible and “non- hyped” development and communication from the scientists themselves, to be fully realised and accepted.


This article is an extract from the Longevity Trends 2020 report.

The report captures Longevity Leaders' extensive research into this space, including the most important longevity trends of 2020 that businesses, policy makers, scientists and the general population need to be aware of.

You can download a free copy here

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