1 PROJECT SUMMARY AND FINDINGS Electronic assisted living technologies (ealt) are offering new opportunities for digitally enabled products and services to support people with health, well being and social care needs.
2 01 Introduction Electronic assisted living technologies (ealt) are offering new opportunities for digitally enabled products and services to support people with health, well being and social care needs. With public sector service provision diminishing due to reducing budgets and stringent application of the Fair Access to Care Services criteria (FACS), there is no doubt that in the area of assisted living, the consumer market will need to flourish primarily to meet the levels of future demand which will otherwise overwhelm public services. The 3 year COMODAL (Consumer Models for assisted Living) project, funded by the Technology Strategy Board, aims to support the development of a consumer market for electronic assisted living technologies (ealt). It focuses on those people aged who are approaching retirement and older age to gain an in-depth understanding of the barriers to market development and create consumer led business models developed through collaboration with consumers, industry and the third sector. Innovations include a direct and unique focus on the consumer (rather than statutory) retail market, social innovation techniques (co-creation, active consumers, user led design) and a multi sector partnership between the Health Design & Technology Institute, Age UK, Grandparents Plus, Years Ahead and South East Health Technology Alliance (SEHTA). Extensive consumer and industry research identified the factors that encourage an informed ealt consumer market and developed solutions to overcome barriers identified by current and potential consumers. This data informed the development and exploration of a number of promising consumer-led business models. The modelling utilised a Business Model Canvas to describe new approaches in the ealt market, and how it can be organised and developed to align with consumer needs. The COMODAL project opens up greater understanding within industry to maximise the opportunities that are presented by changing age demographics. By understanding the needs of consumers aged between 50 and 70, and subsequently thinking creatively and inclusively, we can break away from a solely needs-based and stigmatising business model to a truly consumerdriven model that excites and delights. What did we do and what did we find? The project was structured into 5 work packages over the 3 year programme of work.
3 Work Package 1 Understanding consumer needs This work package aimed to develop a deep understanding of the needs of younger older people (end users) and purchase gatekeepers with regard to independent living solutions; and the barriers and enablers to ALT adoption for this group. 02 Core activities included; REVIEWING EXISTING LITERATURE 1 CONDUCTING A MARKET ANALYSIS 2 AND PRODUCT REVIEW 3 A STREET SURVEY WITH 500 CONSUMERS 4 INDUSTRY WORKSHOPS 5 CONSUMER FOCUS GROUPS 6 Key findings from work package 1 7 included: The market analysis and the consumer survey highlighted the telehealth and telecare sector of the assisted living consumer market as being in its infancy and only 8% of people had purchased this type of equipment in our survey. The top three barriers that were ranked as having the strongest influence for consumers were: cost knowing how to choose what to buy lack of awareness that a product that might help exists. All the enabling factors had a stronger influence than the barriers; an interesting approach to marketing that may be worth exploring by industry. The top three enablers were: 1. believing that a product would really make a difference, 2. a feeling that costs are affordable and worth it, 3. and a belief that the product would make life safer at home. Recognising that assistive technology can be of help (i.e. that it can bridge the gap between changing ability and the everyday activities that people want to do) is a key stage in the process of obtaining it and making successful use of it. As a general rule, people wanted to manage by themselves at home and were open to ALTs supporting them to do so. Information was found to be a key barrier to uptake. In all stages of the research, including industry workshops, the consumer survey and focus groups, a lack of awareness of ALTs and the need for much more accessible and better information to empower people to make choices and decisions in terms of where to go to buy products and services and what to buy was evident. The market analysis uncovered inconsistencies in pricing and low levels of competition in traditional segments. The review categorised currently available products (mostly ALT as opposed to ealt), identifying the main suppliers and summarising their approach to the market. Some parts of the market were clearly dominated by three suppliers. All the leading manufacturers sold their products to a wide range of outlets with wide price variations as a consequence, indicating that, for the consumer, it was well worth shopping around. comodal.co.uk
4 03 Work Package 1 Continued... Recognising that assistive technology can be of help (i.e. that it can bridge the gap between changing ability and the everyday activities that people want to do) is a key stage in the process of obtaining it and making successful use of it. As a general rule, people wanted to manage by themselves at home and were open to ALTs supporting them to do so. Information was found to be a key barrier to uptake. In all stages of the research, including industry workshops, the consumer survey and focus groups, a lack of awareness of ALTs and the need for much more accessible and better information to empower people to make choices and decisions in terms of where to go to buy products and services and what to buy was evident. The market analysis uncovered inconsistencies in pricing and low levels of competition in traditional segments. The review categorised currently available products (mostly ALT as opposed to ealt), identifying the main suppliers and summarising their approach to the market. Some parts of the market were clearly dominated by three suppliers. All the leading manufacturers sold their products to a wide range of outlets with wide price variations as a consequence, indicating that, for the consumer, it was well worth shopping around. Poor design and associated stigma clearly influenced what people chose to buy. The product review looked at trends in development and how well they meet the needs of consumers in their fifties and sixties. It showed that designers and product developers are only now beginning to recognise the market of younger older people as consumers or potential consumers and customers. The product review found that the market would be best served through better design of mainstream products, rather than specific items targeted at older people. It is clear that younger older people do not want to be stigmatised or singled out as in need of assistive products or equipment. There is need for better design of ALTs to make them more attractive, functional, discreet, simple and easy to use. Industry workshops (i.e. with businesses developing, manufacturing or selling ALTs) highlighted poor definition and understanding of the needs of potential individual consumers and also of the potential and structure of the ALT marketplace.
5 Work Package 2 Developing solutions and consumer led business models for ealt. 04 The aim of the second work package was to develop a series of consumer-led business models to best support the growth of the ealt market. Core activities included; SYNTHESIS OF CONSUMER AND INDUSTRY MARKET BARRIERS AND ENABLERS CO-CREATION WITH CONSUMERS AND INDUSTRY TO DEVELOP SOLUTIONS 8 12 QUALITATIVE INTERVIEWS EXPLORING EXISTING BUSINESS MODELS 9 DEVELOPMENT OF CONSUMER LED BUSINESS MODELS AND VALIDATION WORKSHOPS 10 Co- created solutions Overall the research from the COMODAL project into the development of a consumer led e ALT market indicates that information is key to the success of this market. Firstly people need to recognise a need People need to know a product/service exists that might help Need to know where to go to buy it How to make decisions about what to buy Solutions created by consumers to achieve what they want from this market included opportunities for more hands-on experience through demonstrations and try before you buy, money back guarantees, purchase and rental options. User confidence is also essential with reliability and good maintenance and servicing being key factors. It was suggested that consumers would be helped by hearing other customers reviews, along with better information and advice about what to buy. A positive purchase experience that offers outstanding customer service was also seen as desirable. To provide the foundation for the exploration of the business models and how they can be rearranged and developed align with consumer needs in an ealt market, 12 semi-structured interviews were conducted with representatives from medium and large sized organizations in the sector whose primary purpose included design, manufacture, distribution and retail, as well as a national charity focused on supporting independent living. Validation workshops explored the models identified with both consumers and industry. comodal.co.uk
6 05 Four of the most promising business models identified from this process are; COMPLEMENTOR Complementor Model A complementor to a product or service is any other product or service that makes it more attractive. Firms co-operate with each other, to varying degrees depending on the strength of relationship they wish to develop. This model can develop from two products or services, through to a service integrator role where multiple services e.g. telecare and telehealth are offered through a single source. Examples of co-operation include automatic free or discounted access to another product or service that adds value in the eyes of the customer, thus enhancing the attraction of the original product, while introducing potential new sales to the secondary product. An example would be a company that sells stair lifts partnering with a company that sells falls monitoring telecare devices. The customer value proposition of this model is: A number of my needs can be met from one place DIVERSIFIER Diversifier Model Companies have always had the opportunity to diversify, but this model suggests that customer feedback regarding a desire for solutions, rather than independent products or services supports a greater degree of bundling of products or services to provide a more holistic solution to their independent living needs. The suggestion is that firms can offer additional products, benefits or services, outside of their normal area of expertise, but these could be developed themselves, outsourced, or branded through some form of own labelling agreement. Co-operation could be through a variety of arrangements, e.g. a strategic alliance, an outsourcing agreement, or a joint venture. Diversification can be either related to the original firm s core competences, or unrelated. Although it must be borne in mind that the more unrelated the product or service is to the company s perceived competence, the more difficult it is for the customer to trust the new offering. Examples of Diversifier firms include the Safe and Secure service from British Gas which in addition to their normal energy supply role, provides a security and remote environmental monitoring service that allows you to check security, appliances and e.g. loved ones safety from afar. The customer value proposition of this model is: I know I can rely on that brand
7 INDEPENDENT ADVISOR & BROKER Independent Advisor (Broker) Model 06 There are two variations on this model. In the first, the Agent actually bundles the solution elements recommended by the independent advisor, and chosen by the client and sells the package, taking a commission or margin to pay for costs incurred, and expertise provided. The second model is more akin to a personal shopper example, where they signpost the client to the recommended or required products and services, which are paid for individually. The independent advisor can be paid by the outlet, or charge the customer a separate amount for their service. There are limited examples of this model existing in this form at present; however examples of this approach include financial advisory services, bespoke travel agencies and personal shopper services. However this model had the most positive response from both the consumer and the industry experts validation workshops. The customer value proposition is: I can rely on an expert INSURANCE Insurance Model This model suggests the development of variations of the insurance based principle, where in effect for insurance against the risk of financial loss, or need, the many premium payers pay for the few claimants. Alternatively, the life assurance model, where premiums are paid over a period of time in preparation for anticipated expenses. End of life policies currently exist for example, to pay for funeral expenses. The cash plan is another variation whereby one pays a set monthly fee, and when expenses such as dental, optical and prescription costs are incurred, you can claim back benefits in the form of cash payments. This model was less well supported by the industry experts, and the consumers. The customer value proposition is: The worry and uncertainty of the future is managed. From our work in the development of consumer led business models for ealt, to change the market it is clear that; New partnerships/collaboration are required Services rather than new products are needed Identifying gaps/failings/spaces in the market is key Emerging spaces for innovation need to be identified i.e. between informal support and formal (statutory) care in the consumer market And a shift is needed from public sector provision to commercial consumer experience comodal.co.uk
8 07 Work Package 3 Development of industry support system for practical implementation of consumer led business models. Drawing on the consumer and industry insights from work package 1 and the new approaches to business modelling gained from work package 2, the third work package aimed to produce a support system for businesses developing, marketing and selling ealt. The support system will help businesses consider the 4 different models and how they might be applied in the context of that specific business. Structured around the Business Model Canvas used as the foundation for the consumer led business modelling, a web based tool was developed to guide a business through a series of questions to encourage new thinking and approaches to market development. This system was tested and refined with industry representatives and can be found at comodal.co.uk Work Package 4 Development of consumer insights guide for industry To convince industry that consumers are looking for something different than the current ealt market offerings, in the fourth work package we conducted a telephone survey 11 with industry representatives to understand what they believe consumer understanding and preferences are in relation to purchasing ealt, and then compared this with the consumers views 12. We found a disconnect between consumer and industry views and suggest that this creates further barriers to the uptake of technology, that can be mediated by positive action by industry itself. The COMODAL project identified significant differences between what consumers and industry saw as the main barriers to the uptake of ALT and ealt. The following factors were rated as less important by industry but were more important for consumers: The complexity of the equipment how easy it would be to use The lack of national standards or regulation It might be risky to use or result in an accident A product could be unreliable The cost of running a piece of equipment over a period of time Less contact with others or hands on help This indicates the need for industry to pay greater attention to ease of use, reliability, reassurance to the customer regarding standards and safety along with a greater emphasis on the potential value and benefits of using ealt within product and service development and in their marketing to consumers. Throughout the project considerable insight has been obtained directly from consumers
9 08 Work Package 4 continued and end users. We undertook a review of the early COMODAL research outputs to understand what the key insights of interest to industry might be that should be included in a guide on understanding consumer needs in a changing technology market. Work Package 5 Impact, dissemination and exploitation. Workshops were held with industry representatives to understand what they would find useful in terms of the content and format of the guide; this was drafted, reviewed by industry and then published 13. At the beginning of the project one of the clear messages from consumers was that there was a general lack of public awareness about ealt and how it might help a person to live at home, which was acting as a key barrier to uptake. To address this and provide information to the general public, the COMODAL project supported the revision of Age UK s guide Adapting Your Home - Services and equipment to help you stay living at home. The guide was updated to include examples of ealt and telecare to raise awareness along with information about self purchase. A total of copies of the guide will be distributed around the UK. Further information on self purchase and how to choose what to buy is now also available via the Age UK website. Dissemination is key to the impact of any project. In COMODAL we wanted the research findings to be used and applied in a real world setting so, in addition to a series of dissemination webinars a 36 hour Hackathon event (an intensive event where programmers, designers, manufacturers and retailers along with citizens aged collaborated intensively) was held. The aim of the event was to draw together the various strands of COMODAL creating awareness of the marketplace, the needs of the consumers, and breaking down the purchase barriers that currently exist. Applying the COMODAL findings and generating new ealt ideas through the Business Modelling, the best ideas were taken forward to two further co-creation events to extend and develop the ideas. The premise behind the event was to be innovative and brave; to change perceptions through interactive workshops that engender a deeper understanding of the marketplace and the needs of the consumer groups that drive the ealt marketplace. The event, and its outputs, will help to kick-start an Innovation Club, providing ideas and insights informed by the outputs from the COMODAL project. The Innovation Club aims to drive forward ealt market development through interested businesses working together. This may involve answering specific market intelligence or other research questions, seeking partnership opportunities, providing an interface with new players and exploring opportunities such as Horizon comodal.co.uk
10 09 Conclusion As a result of the COMODAL project we now have an improved understanding of the issues around the consumer potential and ealt market growth; Consumers are not aware that products/ services exist and do not know where to get information Consumers in their 50-70s don t think they need these products believing the products are for disabled people and not for them Design is a key issue The top 3 barriers affecting consumer purchase are: cost, knowing how to choose what to buy, lack of awareness that a product that might help exists The top 3 factors that encourage consumers to buy are: believing that a product would really make a difference, a feeling that costs are affordable and worth it, and a belief that the product would make life safer at home All the factors that encourage consumers to buy were rated as having more influence on consumers than the barriers Recognising a need is a key stage of the consumer purchase decision Once a need is recognised, people need to know where to go to buy and be supported in making a purchase decision Consumers are willing to buy products if they are thought to be good value and will make a difference to their lives. Consumers are looking for solutions and good customer service There is a disconnect between industry s perceptions of what consumers are looking for in the ealt market. Existing businesses in this sector are on the whole set up to serve statuatory services rather than consumers Consumers may research online but not transact as they still like to touch and try Marketing messages need to be aimed at benefits, lifestyle and independence New business model approaches will encourage consumer ealt market development New business partnerships and service solutions rather than single product development will be game changer in the consumer ealt market The Broker or Independent Advisor business model showed most potential for further development.
11 10 These findings have been presented to the ealt industry and others interested in breaking in to the market. Interest in our findings and consumers insights has ignited debate around adapting their business model approaches to this market. As a result of the findings from the COMODAL project the four consumer-led business models developed (Complementor, Diversifier, Broker/ Independent Advisor and Insurance) will enable companies to see how they could work differently in this new market. The value proposition, new partnerships and new service proposals are key to these business models and they encourage companies to think differently and approach the ealt market using consumer insights. Impact will be further achieved through the Hackathon to apply the business models to the product and service development process and creation of the Innovation Club. This document has been produced as part of the COMODAL (Consumer Models for Assisted Living) project which is funded by the Technology Strategy Board as part of the Assisted Living Innovation Platform. The project is being led by the Health Design & Technology Institute (HDTI) at Coventry University in partnership with Age UK and Grandparents Plus, and supported by Years Ahead and the South East Health Technologies Alliance (SEHTA). comodal.co.uk
12 References 1. Ward, G., Holliday, N., Prothero, L., Woodcock, Ray, S. (2011) COMODAL Literature Review. Coventry: Health Design & Technology Institute 2. Years Ahead (2011) COMODAL Market Analysis. Coventry: Health Design & Technology Institute 3. Woodcock, A. and Osmond, J. (2012) COMODAL Product Review. Coventry: Health Design & Technology Institute 4. Years Ahead (2012) COMODAL Consumer Street Survey. Coventry: Health Design & Technology Institute 5. Lethbridge, K., & Holliday, N. (2012) COMODAL Industry Perceptions of Barriers Report. Coventry: Health Design & Technology Institute 6. Holliday, N. and Ward, G. (2012) COMODAL Consumer Insight Focus Group Report. Coventry: Health Design & Technology Institute 7. Ward G, Ray S (2011) COMODAL Unlocking the potential of the younger older consumer. Coventry: Health Design & Technology Institute 8. Holliday, Gautier & Ward (2012) COMODAL Co-creation of solutions to overcome barriers to ALT uptake. Coventry: Health Design & Technology Institute 9. Urwin, G. (2013) COMODAL Industry Views Report. Coventry: Health Design & Technology Institute 10. Urwin, G. (2013) COMODAL Business Model Report. Coventry: Health Design & Technology Institute 11. Years Ahead (2013) COMODAL Industry Telephone Survey. Coventry: Health Design & Technology Institute 12. Years Ahead (2014) COMODAL Comparison between Consumer and Industry Views. Coventry: Health Design & Technology Institute 13. Rutter I, Gautier A, Ward G, Mann S, Silver D (2014) COMODAL Understanding the consumer in a changing assited living market: Insights for Industry. Coventry: Health Design & Technology Institute All references can be accessed at