When Leisure Care prepares to launch a new branded product line, it conducts market research. Literally.
“We get into the market and talk to people who live there (and) we look in the grocery stores and see what’s being promoted,” says Leisure Care Executive Vice President Greg Clark. “That tells a lot.”
Seattle-based Leisure Care is among the senior living operators taking a multi-brand strategy in senior living. That is an approach to development akin to what major hotel companies do, such as Marriott International offering 31 hotel brands, from Ritz-Carlton on the luxury end to affordable lines like Fairfield Inn, and a host of hotels in between.
Those hotels are divided by price point, one of the four major characteristics that senior living operators are using to brand their products, along with resident acuity, lifestyle and geography or environment. Leisure Care, for instance, has 52 communities across 18 states, and divides its communities based primarily on acuity level, while branding them around the concept of “fun.”
The examination of local grocery stores and supermarkets is part of Leisure Care’s branding process, because the organization goes beyond demographics when it develops a new line of senior living, focusing instead on psychographics.
“Everybody looks at demographics — demographics are age, income, physically where (residents) are, if they have money,” Clark says. “Psychographics goes deeper into who they are.”
A vision of the consumer
The study of psychographics is a differentiator in market research, and a crucial tool for knowing where to build and how to create successful senior living brands.
Leisure Care is not the only senior living organization focused on psychographics. For its use of data analytics, Toledo, Ohio-based real estate investment trust Welltower, Inc. (NYSE: WELL) has a 17-person team studying consumers and markets to guide new development based on an understanding of the customer that the REIT and its operating partners are aiming to serve.
Chief Investment Officer Shankh Mitra notes that while the use of data analytics to determine a new product might be new to senior housing, it is commonplace in corporate America.
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“American Express somehow knows who to send a platinum card versus who to send a blue card,” Mitra says. “How do they know that? It is very much a psychographic analysis.”
In short, demographics is the study of people based on raw traits: age, race, income, education, and so on. Psychographics looks at demographics within the context of a person’s psychology: how people behave, not just what they are.
Welltower’s team studies both demographics and psychographics in order to capture a vision of the consumer. The risk of only studying demographics is, as Mitra notes, focusing only on a senior’s age and not on his health, or focusing on income and not on spending habits.
“If you’re just looking at age and income, you might get the wrong person, (or) a lot of the wrong people,” Leisure Care’s Clark says. “You might get people with money who don’t like to spend it. They’re strong savers who want to leave it to their children. If you go into that market with a very high-end offering, it probably won’t do great.”
Leisure Care employs a host of techniques to study psychographics of a potential market, but none more important than on-the-ground research. The company aims to get a feel for a community by digging into resident characteristics at the level of ZIP codes and even households, all to capture lifestyle and purchasing patterns.
That is where the supermarket comes in.
While Leisure Care’s system has grown more sophisticated over the two decades that it has studied brands, the old school approach that still pays dividends is studying a community’s grocery stores. Clark pays particular attention to produce, dairy and alcohol. He looks for fresh gourmet cheese versus packaged products. He looks at the butcher’s counter and checks for fresh fish versus fish that is brought in out of the market. He looks at the wine selection.
“Grocery stores don’t have high margins — they have to move that product,” Clark says. “And the mindset of a person looking for those (high-end) things … will be different than the mindset of a person buying a lot of packaged goods, lower cuts of meat, and that type of thing.”
Along with the products, Clark looks at the advertising within a grocery store. A supermarket that messages to its customers by promoting sales, i.e. cost savings, views its customers differently than one that messages by promoting health and wellness. All of this information helps Leisure Care determine its customer as it explores new brands.
“We’ve been able to hone in on (psychographic data) to find out what our residents and their families really want and to develop our brands and operations around that,” Clark says. “Where we find concentrations of (a specific) psychographic … that guides us in the operation that we design in that community.”
This article draws from the new report, “Multi-brand Strategies in Senior Housing.” Click here to access the complete report, which digs deep into the burgeoning multi-brand approach to senior housing, showing how operators are following the lead of the hospitality industry to address penetration rates and build new product lines that attract more seniors.