Sometimes it helps to think of seniors as residents: This is where they live, where they have their friends and engage in their pastimes. Sometimes, though, it is helpful to shift the lens a little and think of them as consumers.
Viewed in this way, seniors move into a residence based on many of the criteria that drive other forms of consumption. As with any consumer good, they must appreciate the feel, touch, taste of the thing in order to buy in. In the senior housing business, though, the consumption economics get more specific. There are particular reasons why a consumer will choose a residence today, and those reasons promise to evolve over the next decade.
What motivates consumption today?
Senior consumers searching for housing today may be motivated by three concerns.
- Wellness issues: Seniors will seek out some form of senior housing when wellness becomes an issue, when they can no longer effectively care for themselves. Wellness may take many forms, from basic activities of self-care to more complex medical matters. Either way, the senior housing business needs to recognize this as a powerful driver within the consumption economy.
- Social issues: Older Americans may become interested in housing options outside the home when it becomes clear that social isolation has begun to creep in. A common malady of living alone, social isolation can leave a senior cut off friend neighbors, friends, family. The senior housing business on the other hand offers the chance to be surrounded by a caring community, a promise that many consumers will find enticing.
- Convenience: At some stage in life, seniors may wish to shed the burden of household chores. Shopping, cleaning, all the more tedious aspects of daily living become not just dull but difficult for those who find themselves increasingly frail. In this case the economics of consumption favor senior housing, where the old tasks may be left safely in the hands of a dedicated staff.
What will drive consumption tomorrow?
As Baby Boomers rise to dominate the senior demographic in the coming decade, consumption economics will see a subtle shift, with new factors coming into play and existing issues taking on a new profile.
- Services and amenities: Boomers have become accustomed to a certain amount of comfort in their lives. While they may not all live in luxury, certainly the Boomers as consumers have demonstrated high standards. Here consumption economics puts new pressure on the senior housing business: Pressure to deliver services and amenities at a higher level than ever before.
- Wellness over and above: Today’s healthcare landscape is complex, with changing rules and evolving care models. This will only become truer in the coming years. As increasing acuity drives seniors to consume greater levels of healthcare resources, housing providers will be tasked with helping consumers navigate this increasingly complex landscape of care delivery and reimbursement, with the business advantage going to those who can deliver such support most effectively.
- Social issues in a digital society: Among today’s seniors, social concerns mostly boil down to having neighbors with whom they can converse. Housing operators can supply this, along with basic telecommunications tools to connect residents to distant loved ones. Boomers, on the other hand, will lean much more heavily toward digital communications such as real-time video and social media. As a generation raised on the promise of technology to open doors between individuals, these consumers will drive housing providers to integrate new levels of technology into their communities in order to better facilitate residents’ social ties.
The drivers of consumption economics may look the same: Wellness, social connectedness, a certain level of service. But the stakes will change dramatically in the coming years. Whatever providers do well today, they will have to do that much better tomorrow. As in all other aspects of this consumer-driven society, the economics of consumption ultimately will call the shots.