Consumer electronics retailer Best Buy Inc. isn’t a name usually associated with healthcare. But it’s looking to change that with the launch of a new digital health and wellness program aimed at senior citizens in the United States, 90% of whom want to stay in their home and live on their own as long as possible.
At its recent investor’s day presentation Best Buy executives discussed a new corporate strategy called Best Buy 2020 that includes Assured Living, a program aimed at using the mobile web, sensors and other digital or smart home healthcare technology to help adult children or care givers remotely check in on the health and safety of aging residents at home.
Under the program Best Buy wants to sell seniors online and in its network of more than 1,000 stores an array of smart home devices that can range from in-home web cameras to sensors that can be installed throughout an elderly person’s home. Best Buy also will offer an installation program and monthly monitoring service that can be used by seniors’ adult children or other caregivers. Best Buy will sell an entry-level package of digital home health gear for $389.96, install it for $199 and provide a monthly monitoring service for $29.
The program is being piloted in Denver and Minneapolis, but Best Buy has yet to announce details for a full-scale rollout. “The idea for Assured Living was born in response to customers who came into our stores looking for smart home technology to help keep tabs on their aging parents,” says Best Buy vice president of strategic growth office AJ McDougall. “We looked at several options, and we felt strongly that we didn’t want to use wearable devices or cameras—we want our elders to feel very independent.”
With the Assured Living program, caregivers can track the data sensors collect on aging seniors using an online dashboard or mobile app. Those monitoring seniors can also sign up to receive customized notifications via an app, a text or by email. The sensors can show whether an aging person opened the medicine cabinet or refrigerator that day, and her quality of sleep and activity levels, says Best Buy. Over time, the Assured Living system also can learn the individual’s daily routines, so it can notify caregivers of abnormal activity, says Best Buy.
Best Buy conducts a personalized consultation with an interested Assured Living customer, assigns the customer a service rep that can also order the digital home health gear, schedule an installation and monthly service and be available online or at the home at the time of the installation.
Best Buy has yet to say how many Assured Living customers it has signed up during the initial pilot programs. But Best Buy does see digital healthcare and the senior citizen market as a key part of its new Best Buy 2020 strategy, CEO Hubert Joly told analysts and other attendees at Best Buy’s Sept.19 investor’s day presentation.
By 2020 about 45 million Americans will be caring for 117 million seniors, taking responsibility for a variety of tasks, from food delivery to safety and health monitoring.
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% 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% have actually done so, according to a 2016 study sponsored by AARP and others.
“This is white space waiting to be captured,” Joly told attendees.
Best Buy 2020 is meant to help transform Best Buy from a traditional consumer electronics retail chain into a retailer that also sells services and technology programs to consumers, and sees opportunity in the $48 billion connected healthcare market, Joly told attendees. “Buying and using electronics is still too often not an ideal experience,” Joly told attendees. “Many customers are looking for more than a transaction—they are looking to a solution to their human needs.”
With Best Buy 2020 as a core strategy, Best Buy aims to achieve e-commerce revenue of at least $5 billion for fiscal 2018, up 4% from $4.8 billion in fiscal 2017 and comparable stores sales of 2.5% to 3% for fiscal 2018 from 0.2% in the prior fiscal year. Best But also aims to grow total revenue in fiscal 2018 $43.0 billion by 10.3% from $39.4 billion for the 2017 fiscal year ended Jan. 28.
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