This is my third report from the ARCO conference – July 2016. (See my earlier blogs “ARCO Conference Demographics” and “ARCO Conference Dementia” in the archive dated July 2016.)
This was an extremely interesting talk by Doctor Margaret Wylde, the Founder and CEO of Promatura Group – a marketing consultancy that specialises in retirement communities. Her presentation focused on the large retirement communities that have developed in the USA over the last 25 years and her insights were drawn from the lessons of a mature market in the USA.
The next two slides say it all about some of the retirement communities in the USA. The first slide is a retirement community developed by the Del Webb Corporation in 1960 in Sun City, Phoenix, Arizona. It shows a host of individual houses built around a central hub of facilities, all designed for older people.
However, that only shows half the story. The slide below gives you the even bigger picture. Sun City is made up of a host of retirement communities, to the point where this particular community now houses 38,000 older people and covers an area of 37 square kilometres.
The photograph looks lovely doesn’t it. It makes a nice pattern from the air! But I’m not sure I’d like to live there. Talk about ghettos for the elderly, this must be the ultimate in ageing communities. What’s more, the Del Webb Corporation has gone on to build many similar, albeit slightly smaller communities, in many other parts of the USA. They have also been emulated by many other retirement community developers.
What it does illustrate is the enormous desire of many older people in America to cash in some of their wealth, downsize and move away from the big cities and into sunnier climes. It’s like the move many older people made in the UK, to relocate to places like Torquay and Brighton or for the more adventurous, to retire to the Costa Del Sol or the Costa Brava in Spain.
Everything in America is bigger and land is a heck of a lot cheaper. I’m not sure we could learn too much from this experience other than what not to do. That’s not to say that we shouldn’t build retirement communities in the UK, but they certainly are unlikely to ever reach the American scale.
Some of the key marketing messages, which are relevant however, are:-
- Firstly, that it is the quality of lifestyle in the retirement community that creates customer satisfaction, not just the properties themselves;
- Secondly, the premium on property purchase prices can be up to 30%;
- Thirdly, don’t push service charges too high or risk losing 20% of the market;
- Finally, there is a great desire for a new life in retirement, providing the options closely reflect the customers needs, which requires sophisticated market analysis.
More to follow in my next blogs.