Amazon’s next target market – the aging American population
In his 2018 shareholder letter, Amazon’s Chairman and CEO Jeff Bezos cited the company’s “unrelenting customer obsession” and its aspiration to be “to be Earth’s most customer-centric company” but also thanked the “hundreds of millions of divinely discontent customers around the world who push to make us better each and every day.” With Baby Boomers turning 70 en masse over the coming years, this aging population is confronting new challenges to their day to day life as well as their health.
One of Amazon’s greatest strengths is its ability to remove friction for its consumers be it in shopping for a wide and growing variety of products and increasingly services. To us, at Tematica it is no surprise that Amazon is examining ways it can help improve the lives of its greying customers, leveraging the offerings it has today to meet their existing needs and developing news to meet those coming unmet ones. Amazon already has meaningful exposure to a number of our investing themes and their tailwinds. As the company addresses the needs and wants of the Baby Boomers, and those that care for them, it looks to ride the slipstream of our Aging of the Population investing theme as well. This likely means Amazon will once again alter the playing field for companies serving that growing demographic, and odds are it will impact more than CVS Health and Walgreens Boots in the process.
More than one million Americans reside in assisted-living facilities today, a number that is expected to double by 2030. And many Amazon users are getting older, sicker and wealthier, making health and senior care an ideal target for the company.
The trend towards so-called “aging in place,” which gives older Americans an opportunity to remain at home, also provides opportunities to develop monitoring gadgets and sensors, which could tie in with Amazon’s Echo line of products and Alexa personal assistant.
According to AARP, a group that represents the interests of older Americans, more than 90 percent of seniors would prefer to remain in their home rather than relocate to a nursing home or assisted living facility. (Amazon also met with AARP, sources say.)
At least three people in the aging space who have met with Amazon on the bus tour, or at one of several meetings convened by the company after the tour was done, say that they talked about the current crop of technologies for aging populations, the competitive landscape, the financial opportunities and the special needs of seniors that are distinct from the general population.
Prime Paves the Way
The people said they also threw out ideas for how the current crop of Amazon products could be adapted to people over 65, such as delivering groceries, medical supplies and other goods in a clearly labeled way (Amazon today doesn’t deliver prescription medicines). They also discussed putting together special packages for people after a medical procedure, delivered via Prime, like a hip or knee replacement.
Voice technologies are good but need to be better
Alexa could be another area of focus. Amazon this week released a version of its Alexa device designed for kids, but it’s long been expected to unveil a similar set of features for older Americans. Some older Americans who have played with it have expressed frustrations about the voice assistant, including that Alexa speaks too quickly. According to Stat News, one group of nursing home residents that reported to Amazon that its deep voice wasn’t ideal for people with hearing aids.
But it wasn’t just a discussion of new products and business models. On the tour, attendees also talked to Amazon about the loneliness and isolation felt by older Americans.
That seemed to have struck a nerve with Amazon’s executives.
more from Amazon coming
“Something…we’ve been building for some period of time and we deeply care about… relates to what happens to older people,” said Parviz, the company’s vice president of special projects, at an event a few months ago, three years after the tour wrapped up.
“We have looked at the older population in the context of health… and we know this group has a lot of issues and unmet needs,” he said.
Source: Amazon employees went on a secret bus tour to learn about aging
