Consumers are getting older and becoming more tech savvy. This is driving a hot growing market for “silver tech” or technology for seniors. The U.S. Census Bureau released data at end of June which showed the 65-and-older population grew by 34.2% since 2010. Seniors are increasingly embracing technology.
AARP 2020 Tech Survey had the surprising finding that adults over 50 are adopting new technologies such as smartphone, wearables, home smart speakers, and smart home technology, at about the same pace as 18-49 year olds. Covid-19 is accelerating the shift towards online and expediting the older generation’s use of new technology, as more seniors find themselves isolated from friends and family. To meet the large and growing demand for silver tech, innovative startups are applying technologies to service seniors, from improving transportation and mobility, increasing virtual connectivity, enabling telemedicine, and providing entertainment and financial virtual services oriented towards older adults.
Telehealth leaped ahead in March when Department of Health and Human Services announced improved regulations to increase access to telehealth. An important step was raising reimbursement rates for telehealth visits. Another major enabler was the relaxation of HIPAA, or Health Insurance Portability and Accountability Act, privacy laws to allow use of smartphones and to permit doctors to provide care across state lines in 48 states. McKinsey sentiment survey revealed that consumers expect to shift significantly to online shopping after Covid-19, increasing their online purchasing of personal care products, OTC medicine, and fitness/wellbeing by over 30%. McKinsey research also indicates interest in telehealth spiked from only 11% of consumers in 2019 to 76% after the global pandemic. This increased interest in telehealth opens up a giant new market with estimated size of $250 billion in U.S. alone.
Many large companies are jumping in. In April, Verizon launched a Personal Emergency Response System (PERS) called the Care Smart Watch for seniors. This is a modernization of PERS which had traditionally been dominated by the pendants worn around the neck. PERS could be a $3.1 billion market today.
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Venture capital firms are also noticing the silver tech trend. Tracy Chadwell, Founding Partner of 1843 Capital, observed that “with 83% of the wealth in the United States held by people over 50 this is a naturally attractive market opportunity. Word is getting out and innovation in the space has accelerated exponentially.” Chadwell is one of the investors who is betting big on silver tech. Hop Skip Drive is a startup that can provide transportation services for kids and elders. May Mobility takes another approach to solving the mobility issue for elders by using autonomous-driving technology. Silvernest is a company with matches those over 50, solving for financial wellness and loneliness.
The innovation in silver tech is varied and numerous and global. Drone deliveries minimize infection risk from human contact for elders with vulnerable immune systems. Japan has a lot of experience with silver tech as they have been struggling with an aging population with over 68,000 people over the age of 100! They deployed drones to deliver medicine to seniors in remote areas who were cut off due to natural disasters.
Nursing homes and senior living centers are a big customer for silver tech to improve services for their residents and reduce their costs. Occupancy levels nationwide for senior living organizations fell below 88% last month; That means more organizations are suffering from lower revenues. At the same time, operating costs have gone up as there is additional requirements for protective gear and hygiene/cleaning and social distancing. Covid-19 is driving up other expenses too; food prices increased 4.8% in May. Incremental revenue from some ancillary services (education, entertainment, discretionary activities) has gone away as those services are curtailed due to shelter-in-place mandates. Other basic services are difficult to provide. Most seniors are under severe quarantine restrictions so can’t meet face-to-face with family members, other residents, doctors, nurses, pharmacists, and other service providers. Being able to meet virtually with their physician or swap jokes with old high school friends or see the growing grand child is strong motivation for seniors to try new connectivity tools.
Facilities for older adults will quicken the pace of investing in technology. A Ziegler survey at end of 2018 found that 74% of senior living organizations had invested in high-speed internet connectivity and wireless technology in the past 12 months. The state of Florida gave tablets to 150 nursing homes. The attorney general of Massachusetts supplied 750 tablets to nursing home residents. And Texas provided $3000 per Texas nursing home for tablets, webcams, and headphones.
Sequoia Living is a senior living organization in Northern California with 1,600 residents is completing construction on a new $128 million facility. Leveraging technology was factored into their 2020 plans but with Covid-19, they are now augmenting those plans. Sara McVey, President and CEO of Sequoia Living noted that they “have ordered four Skytron UV-C disinfection robots, which use high intensity ultraviolet light to destroy viruses such as Covid-19, norovirus, C.Diff, and influenza. They will be powerful tools against infection as we continue to safeguard Residents and Staff and begin to reactivate our communities and services in the Bay area.” The silver tech trend may be young, but it’s timely, big and growing.