Living with Our Own Kind

Discussion
Jan 31, 2007

By Bernice Hurst, Managing Director, Fine Food Network

We’ve talked here before about multi-generation and single person households but there is another kind of household whose numbers, especially in the U.S., are increasing steadily year on year. According to a recent Bloomberg article, 2.8 million households nationwide were part of age-restricted communities in 2005, up 29 percent from 2001. An estimate from the National Association of Home Builders projects that as many as 95,000 units limited to senior citizens will be built in the U.S. in 2007.

A correlation can be drawn, of course, to the aging boomer population and extended lifespan many people are enjoying. Enjoying is the operative word here. More and more adults of a certain age, too young and healthy to need assisted living, have decided they prefer neighbors of a similar age.

England may not yet have as many purpose-built gated communities specifically targeting a 50+ audience but there are towns such as Christchurch where the more mature are gravitating. As Fay Weldon of The Guardian discovered when she went to visit, there are mixed views about the long-term viability of such a demographic mix. There may be more people with common interests and more volunteers to run community centers and libraries, but caregivers are generally older and therefore more likely to become infirm themselves. There are different needs and demands when it comes to shopping; the mix of retailers, and their selection, may also need to change. (More pharmacies, fewer toy and DIY shops.)

Discussion Questions: Will living in age-restricted communities change the way people shop? What will this mean for retailers? Will retailers begin to work with developers to include retail space within adult-only communities?

It may be comfortable to live amongst people of a similar age but, by deliberately limiting contact with other groups, choices may also be restricted. Many retailers are targeting local rather than general audiences more and more but outlets in age-restricted communities may change the available labor pool, as well. With fewer young people living nearby, it may be difficult to recruit and train appropriate staff.

Affluence
and the type of retailers that may succeed amongst such groups is another intriguing
issue. Some people want to keep their own furniture and belongings but others
take the opportunity to start from scratch and carve out a new lifestyle. Elinor
Ginzler, the AARP’s director for livable communities, points out that the square
footage of homes in adult communities has grown steadily and the demands are
increasing. David Simpson of UK-based developer, Millgate Homes, also maintains
that purchasers want spacious accommodation and high levels of décor. It isn’t
all a matter of downsizing; there is a demand for luxury amongst those who
can afford to buy property in these newly desirable communities. How important
(and easy or difficult) do you think it is to maintain a balanced assortment
of retailers?

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14 Comments on "Living with Our Own Kind"


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Charlie Moro
Guest
Charlie Moro
15 years 3 months ago

Age-focused communities will present the same types of challenges and opportunities as other focused retail segments. Hispanic, Asian, rural, inner city…all present opportunities for focus on assortments, services and channel of distribution. I believe retailers will see these consumers as all others; a potential profit and growth center if they can efficiently serve them.

Ryan Mathews
Guest
15 years 3 months ago

Living in any kind of formal community changes the way people shop. We’ve got a similar example today in retailers who set up small stores in gated communities. Presumably, the inventory in the kind of seniors-only community would be more targeted to older shoppers (an in-store pharmacy would be a slam dunk).

Mark Lilien
Guest
15 years 3 months ago

Age-restricted housing doesn’t necessarily reduce the labor pool. One client of mine has a distribution center down the road from an over-55 community and gets many workers from that group. Home Depot, Borders, Staples, Walgreens, CVS, and Toys R Us all list employment info on the AARP web site. And retailers don’t assume that the elderly only buy for themselves. For example, grandparents are heavy children’s book buyers. Additionally, there are big differences between the various decades, age wise. That’s why the AARP has separate magazines for people age 55 to 64, 65 to 74, and those over 74.

J. Peter Deeb
Guest
15 years 3 months ago

Having the first hand experience of living in a community that, while not age restricted, has over 80% of the population over 50, the issue of how you are able to shop must vary by community. Our development is situated in an area that has balanced age groups, so all the typical mainstream amenities are available. The shopping habits and patterns of older people are different and in many cases they have to drive to several locations relatively far from their homes to reach the stores or shops that they want. This will be an issue as they age to the point of being drive-restricted. The flip side of the drive and distance dilemma is that most of us “older Americans” are computer savvy and shop the Internet.

Bernie Slome
Guest
Bernie Slome
15 years 3 months ago

I love when they talk about us…the baby boomers. We are perhaps the most influential and talked about generation in history. Yes, we are here thanks to, as Tom Brokaw so brilliantly named them, the greatest generation; but we are the generation that has changed the world in so many ways. We have changed the way retailing has been done several times over. We insisted first on speed vs. service. We insisted on cheaper is better. We began spending when we didn’t need to buy. We have the most discretionary dollars, so far, of any generation. And we might be the largest generation as well. Now we want service and quality. And we are willing to spend.

So will retailers put their stores closer to the 50+ communities? They will unless there is push back from the baby boomers. How can they ignore such a huge market that will still be here, spending money, for 20 more years!

David Livingston
Guest
15 years 3 months ago

Most age restricted housing is built into small developments which are part of a larger community. There are a few exceptions but most are not large enough to develop retail around. Perhaps in the future we might see single developments of 5,000 or 10,000 units. Once we get to that magnitude we will see some changes.

Mel Kleiman
Guest
15 years 3 months ago
As age restricted communities grow up all over the country–but more prevalently in the warmer climates–they of course are going to be a group that has its own shopping patterns and preferences. In most cases, they are going to be more affluent, otherwise they could not afford this type of living style. That means they will be a target that retailers of all types will want to cater to. Finding people to provide the services this group wants and will require will be a challenge to anyone who decides to establish a presence in this market for two demographic reasons. One: the limited number of younger people and minorities who live in close proximity to the job. Two: even though the members of this community most likely will be interested in being active, they don’t want or need to be active at $8.00 an hour. A side note: friends of my parents moved into a restricted living community with a golf course 20 years ago. (the community owned the golf course) As they got older… Read more »
Jerry Tutunjian
Guest
Jerry Tutunjian
15 years 3 months ago

Limited retail space within high-rises, condominiums and elder homes are already here. They make great sense. With the aging demographics, the number of these outlets should increase as more high-rises are packed with the elderly. A further wrinkle–pardon the double entendre–is that the ratio of older people as a percentage of the population is increasing.

I can see such retail outlets expanding beyond pure grocery to other services. These retail outlets are extremely convenient, especially in colder climates such as Canada and the northern U.S.

One temptation the retailers should resist is to boost prices sky-high because of the convenience they provide. Customers are prepared to pay more for the convenience, but price gouging would make them hostile and drive them away.

Art Williams
Guest
Art Williams
15 years 3 months ago

The aging of America is a force that can’t be ignored and will present many opportunities for savvy retailers. Placing retail stores inside gated or senior communities makes so much sense that it has to be a “no-brainer.” As has been pointed out, a pharmacy would be a must but grocery stores and restaurants would also be high on the list. A general store of some kind that would enable people to pick up everything from hardware items to dry goods would also fill a need. It will be interesting to see what the better retailers are able to come up with.

Gene Hoffman
Guest
Gene Hoffman
15 years 3 months ago

I’m inclined to believe that smart retailers go fishing where the fish gather, no matter what their age, race, gender or texture of their gills and fins.

Vahe Katros
Guest
Vahe Katros
15 years 3 months ago

Your question: Will living in age-restricted communities change the way people shop?

Comment: not unless new options develop that conform to the audience.

Your Question: What will this mean for retailers?

Comment: study the people, learn how to conform and add value to their lives before someone else does.

Your question: Will retailers begin to work with developers to include retail space within adult-only communities?

Comment: get the answers to number 1 and 2 above, to determine what is needed. How about the Whole Foods delivery cart that brings food ordered that morning catered to people with specific disease states that delivers food to the rest area at the end of the ninth hole?

Brian Numainville
Guest
15 years 3 months ago

Like anything else, this is a focused niche that can be served by offering the right products and services. Health & wellness programs, smaller package sizes, pharmacy, and so on would be key offerings in a format focused on these types of communities. Of course, you would need sufficient density of this population to support putting in appropriate retail.

Camille P. Schuster, Ph.D.
Guest
15 years 3 months ago

I don’t believe that living in an age restricted community changes the way the people who live there shop. However, it does change the mix of consumers shopping at local stores. While these people would be looking for the same kind of products regardless of where they live, having a concentration of people looking for similar products does have an impact on the inventory and sales at local retailers.

Bill Robinson
Guest
Bill Robinson
15 years 3 months ago
Retailers have always been particularly adept at marketing to baby boomers. When the first female boomers were little girls, Ruth Handler at Mattel brought Barbie to market. When baby boomers were in their teens, hundreds of chains sprouted up to sell them records and clothing. When the reached their early working years, the industry responded with hundreds of suburban shopping malls. When they were young and active, retailers responded with Sports Authority, Dicks, and Nike. When they started their families, Frank Lazarus rolled out Toys R Us for their kids. As they reached their high earning years, Chico’s and Men’s Wearhouse matured with them. When they wanted to be stylish, it was Armani and Polo. When they wanted to remodel their empty nest houses, Blank and Marcus were there with Home Depot. When they wanted a night out, they found Ruth Chris. When they wanted to give a thoughtful gift to their grandchildren, they found Build A Bear. Now as baby boomers contemplate retirement, the retail industry will certainly respond to the baby boomers’ new… Read more »
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