Businesses getting ready for aging baby boomers
By Tim Christie
Published: Sunday, September 2, 2007
A virtual tsunami of baby boomers - about 76 million in the United States, including close to 1 million in Oregon and nearly 100,000 in Lane County - are approaching the Golden Years and all that implies.
The aging of baby boomers brings with it both costs and opportunities, risks and benefits for business owners and service providers. And it promises to profoundly affect the economy for decades to come.
Health care, housing, recreation, tourism and retail are among the sectors that will feel the graying of the post-World War II generation - those born between 1946 and 1964.
Consumers 50 and older have accumulated more spending power than any other age group in history, according to the U.S. Consumer Expenditure Survey, spending more than $1.7 trillion on goods and services each year. Savvy businesses see the green in that sea of gray.
Those mature consumers are a "sophisticated bunch," said Kelly Kroll, president and founder of After50 Marketing, a marketing and PR firm in Michigan.
"They've got all the money and they're willing to spend it, but they are exacting consumers and exacting shoppers," he said. "They've been around the block. They're doing a lot of research and investigating and comparative shopping before they make purchases.
" Savvy retailers recognize that boomers can't be lumped into a single group, said Mike Gatti, executive director of the Retail Advertising and Marketing Association, part of the National Retail Federation. They've embraced "mosaic marketing," based on lifestyle demographics.
"It's really building a relationship where you understand the consumer," he said. "It's not based on age or income but on lifestyle."
The popularity of what are known as life-style centers has taken off over the past 10 years, fueled in part by affluent boomers looking for a different shopping experience than that provided by regional shopping malls. Lifestyle centers are outdoors, offer a mix of upscale retailers, restaurants and entertainment, and amenities such as fountains, courtyards and street furniture that encourage casual browsing.
Oakway Center in Eugene began its transformation from a neighborhood shopping center to an upscale lifestyle center in the late 1990s, and its mix of stores includes several retailers - Chicos and Coldwater Creek, for example - that target older shoppers, said Steve Korth, director of real estate development for McKay Investment Co., which owns the complex.
"Lifestyle centers as a whole are attractive to that group," he said. "They're a little classier, with a higher end appeal, that's more appropriate to that age bracket."
Oregon has one of the nation's fastest growing boomer populations, according to AARP. The number of both Oregonians and Lane County residents age 65 and older will increase about 85 percent between 2005 and 2025, according to estimates by state economists.
Their sheer numbers will impact almost every industry, but especially health care. PeaceHealth is preparing for the wave by looking for new ways to treat the aged at the recently established Gerontology Institute at Sacred Heart Medical Center.
"It's the largest health care challenge the country faces," said Dan Reece, the institute's executive director.
The institute - the only center of its kind in Oregon - is an outgrowth of work PeaceHealth has been doing for the last decade, at its Center for Community Geriatrics in Eugene and the Senior Health and Wellness Center off Barger Drive.
The program takes an interdisciplinary approach to senior health, where patients are seen not just by doctors and nurses but also by dieticians, pharmacists, audiologists, peer counselors, physical therapists and social workers. That approach is particularly effective for the 20 to 30 percent of seniors who are frail and require coordination of complex health needs. One emphasis is taking a closer look at seniors' medications. Inappropriate or excessive medications is the leading cause of falls among seniors, said Dr. Ron Stock, the institute's medical director. That's because different drugs can interact and affect a senior's vision, balance, reaction time and thinking.
The first baby boomers, born in 1946, will be eligible for Social Security next year, and reach retirement age in four years, but many have already stepped away from the work-a-day world. And they're already redefining what it means to retire.
Some are choosing to retire early, but then dive back into work as a volunteer or consultant. Others ignore the traditional stop sign of 65 and keep working into their 70s.
"Who says at age 65 someone automatically should retire?" said Margaret Neal, director of the Institute on Aging at Portland State University. "As we live longer, as we live healthier, we should be able to be contributing members of society for many years."
Aging experts expect boomers to live independently as long as they can, and one way to do that is to downsize into homes that are easier to maintain and to navigate.
"They want to stay independent," said Linda O'Bryant, a RE/MAX real estate agent in Eugene who specializes in working with senior buyer and sellers. "They don't want to depend on families or friends or necessarily be in that assisted-living situation. If they make the right choices, that extends the period of time they can stay independent."
That means getting out of a big house with the master bedroom on the second floor in favor of a smaller home that has the master bedroom and bathroom on the first floor, she said.
Some aging boomers are moving from conventional houses to condominiums or manufactured homes in a gated park so they can take off for a few months in the winter without worry, O'Bryant said.
Savvy seniors aren't waiting until they're infirm to make such a move, she added.
"I see people in their very early 60s that make plans for their late 70s and 80s," she said. "They don't want to get in a position where a health situation occurs where they're forced to do something. People don't like to be in that position."
Another option are retirement complexes, such as Willamette Oaks Retirement Apartments in Eugene, owned by Bill Reeve and his wife, Mary.
While boomers may put off moving into retirement living as long as possible, Reeves foresees a growing demand for senior housing.
"Over the next 10 years we probably won't be able to keep up with the demand for all kinds of senior housing," he said. "There is just pent-up demand," he said. "In Lane County we'll see quite an expansion over the next 10 years."
Willamette Oaks is a 164-unit "independent living" facility for seniors who don't need help with the tasks of daily living. But as residents age and need more help, they're forced to move to other facilities that offer assisted living services, Reeve said.
That's why the Reeves are embarking on a major expansion at Willamette Oaks, adding 56 assisted-living units and 24 units for people with Alzheimer's disease. Construction, estimated at $13 million, is set to begin in mid-2008.
"We wanted to offer what our folks have been looking for," he said.
Bernice Homan, a 16-year-resident of Willamette Oaks, is still spry at 90 and doesn't yet need assisted living, but she expects to some day.
"I will go to the assisting living when it is built," she said. When Reeve told her about his expansion plans, "I told him to hurry and get it ready for me when I need it."