Jane Helgesen had a rough night recently, as nausea kept the 71-year-old retired nurse scurrying to the bathroom. A sensor under the bed recorded her comings and goings, sending alerts to her daughter, Britt, who lives nearby. Feeling better the next day, Helgesen used a doorbell camera to welcome guests, whose images are displayed on her rose-gold iPhone, which she also uses to unlock the front door and tweak the thermostat.
The smart gadgets in Helgesen’s three-bedroom townhouse in the Twin Cities suburb of Woodbury, Minn., aren’t new. What’s different is that Best Buy Co., better known for hawking TVs and computers than for selling geriatric-care products, is wiring it all together. The electronics retailer, which sells an entry-level package of gear for $389.96 (installation costs an extra $199), also provides a monitoring service for $29 a month.
Helgesen’s home is a proving ground for this fledgling unit, called Assured Living, now open for business in Denver as well as the Twin Cities area. If the two test markets work out, Best Buy Chief Executive Officer Hubert Joly envisions rolling out a broader business of sensor-based senior services, sold through health-and-wellness departments in Best Buy’s more than 1,000 stores. He concedes it’s a bit of a stretch for the electronics retailer: “We’re not top of mind” in the geriatric-care market.
For now, Best Buy is one of a number of consumer and tech companies jockeying for position in a race for a likely $50 billion market to remotely look after grandma. Joly calls it “white space waiting to be captured.” Google, Microsoft, and Samsung are all going after the smart-home market with remote monitoring networked gear such as stove safety devices, stove safety guards, auto stove shut off devices, security cameras and thermostats that can be managed by voice controllers or smartphones. Amazon.com Inc. has already introduced a smart-home installation program in several West Coast cities. All of these systems could easily be tailored to keep an eye on the elderly.
“We don’t have enough long-term-care facilities to take care of people, and 90 percent of seniors want to stay at home”
Fueling the interest in monitoring aging relatives remotely are some compelling demographics. By 2020 about 45 million Americans will be caring for 117 million seniors, spending on everything from food delivery to safety and health monitors. Research by the AARP and consultants Parks Associates found that caregivers will spend an average of $509 annually for each person they tend to by 2021, a 69 percent increase from 2016. That number is only likely to rise. Caregivers are typically busy with their own kids and jobs, so beyond the direct spending lies an additional $522 billion annually in income lost because of time spent on elder care, the Rand Corp. estimates. Three out of four caregivers want to use technology to make their duties easier, but only 7 percent have actually done so, according to a 2016 study sponsored by AARP and others.
Can Best Buy compete in this unfamiliar world? “When you think of home health care, you don’t think of Best Buy,” says John Hopper, chief investment officer of Ziegler Link-Age Longevity Fund LP, which invests in companies targeting seniors. “They do have to create some bona fides.”
The prospect of a booming geriatric market has given rise to a slew of venture-backed startups, most offering some type of tech-enabled service. Nobody has yet cornered the market and many have faltered. One example is Lively, a senior home-monitoring service backed by Maveron, the consumer-focused venture capital firm co-founded by Starbucks Corp. Executive Chairman Howard Schultz. The Bay Area startup, run by veterans of Apple Inc. and EBay Inc., erred by ramping up too quickly and selling directly to consumers, rather than through established industry partners, according to Laurie Orlov, founder of industry researcher Aging in Place Technology Watch. The company fizzled and was quietly acquired last year by GreatCall, a San Diego-based maker of senior-friendly devices.
Joly says he’s learned from others’ mistakes. In Denver, Best Buy has teamed up with insurer UnitedHealth Group Inc., which layers the personal touch of wellness coaching from trained dietitians and exercise physiologists on top of the smart-home network for $59 a month. That price includes installation, plus a data-collecting base station, but the rest of the hardware is sold separately and typically costs a few hundred dollars per home. It’s not cheap, but it’s much less than the $3,500 a month that space in an assisted-living development can run.
“We don’t have enough long-term-care facilities to take care of people, and 90 percent of seniors want to stay at home,” says Dr. Rhonda Randall, chief medical officer of United Healthcare Retiree Solutions. “But they may be nervous about that.”
To put older consumers at ease, Best Buy is using a specially trained sales team to advise them and their caregivers on what to purchase, while installation is handled by its Geek Squad tech-support crew. One early lesson, says AJ McDougall, the general manager in charge of the program: “We have lots of dementia cases, so they got specific training for that.”
“Best Buy’s staff needs to have some inkling about who these people are,” says Jody Holtzman, senior vice president for market innovation at the AARP. “You have to have something that resonates with the senior as well as the caregiver who is writing the check.”
Helgesen, for instance, thought at first that she was “a little young” to need a houseful of gadgets tracking her daily routine. She even got rid of the sensor in her favorite living-room chair soon after it was installed because she didn’t think it was needed. But she likes the bed sensor’s ability to log her time asleep each night—six hours and 12 minutes, on average. Daughter Britt’s concerned reaction to receiving that data: “You should get more sleep, Mom.”
Meeting the often-conflicting needs of seniors and their children is the biggest challenge, experts say. “It can’t just be about calming the nerves of the adult caregiver,” says Laura Carstensen, director of the Stanford Center on Longevity.
As Best Buy proceeds, it could find itself competing against companies that already sell geriatric products in—you guessed it—Best Buy stores. One of those is GreatCall, which has offered its senior-friendly phones and medical-alert devices at Best Buy for about a decade. GreatCall CEO David Inns says he welcomes the competition as a sign that senior care is “finally becoming sexy.” He thinks the entry of companies with established marketing savvy will help all players. “This market has been held back because there is a lack of consumer brands in this space,” Inns says.
That could change as more companies begin targeting customers like Helgesen, who broke her toe just weeks before she got the smart-home setup. “I wish I had that smart doorbell working then,” she sighs. “It’s really made a difference.”
BOTTOM LINE – By 2020, 45 million Americans will be caring for 117 million seniors. That’s encouraged Best Buy to offer a $59 monthly monitoring service using internet-connected gear.
Taken from Bloomberg Business Week 2017