Gen Z? Nah. Best Buy makes an $800M investment in an aging America

Best Buy Co. is preparing to ride the age wave.

The Richfield-based company said Wednesday that it will spend $800 million to purchase GreatCall, one of the nation's largest providers of communications technology aimed at helping older adults live independently and more safely in their homes.

Based in San Diego, GreatCall now has 900,000 subscribers for its service, which uses mobile technology and easy-to-handle devices to connect older adults with family members or with trained call center operators who can answer questions or call emergency personnel if necessary.

It is the first acquisition for Best Buy since Hubert Joly became CEO in 2012 and moves the company squarely into the aging and health services space.

"At a time when there's still so much energy around wooing new generations of shoppers — millennials and Generation Zs — Best Buy is focusing on the other side of the spectrum," said Carol Spieckerman, a national retail consultant and strategist. "They are single-handedly expanding the definition of consumer electronics."

Technology holds promise to help rising numbers of aging Americans remain in their homes and stay in touch with health care providers as well as friends or family members who don't always live nearby.

The market for aging services is massive and growing and will continue to expand in the decades ahead. By 2030, about 20 percent of the nation's adults will be 65.

A Best Buy spokesman said Joly and other officials would not be available to comment. In a statement, Joly acknowledged the role technology can play in supporting an aging population and family caregivers.

"Now, we have a great opportunity to serve the needs of these customers by combining GreatCall's expertise with Best Buy's unique merchandising, marketing, sales and services capabilities," he said.

Founded in 2006, GreatCall has annual revenue of more than $300 million, according to a company news release, and is profitable. It was purchased in June 2017 by the private equity firm GTCR.

GreatCall's CEO, David Inns, will remain in that position, and the company headquarters will stay in California.

The cash deal is expected to close by Nov. 3, the end of Best Buy's fiscal 2019 third quarter. Best Buy said it expects the acquisition to start contributing to its overall earnings by fiscal 2021.

The purchase complements a similar Best Buy service called Assured Living, now available in 21 cities, that incorporates motion sensors and other monitoring technologies to try to prevent health crises and help older adults live independently.

It also dovetails with the company's strategy to use its expertise and Geek Squad employees to do in-home evaluations that help consumers simplify their technology in a "connected home."

At a time when retailers are fighting for talent, Spieckerman said Best Buy gains a partner with staff and expertise to manage the technology. But the retailer also gains access to a valuable database of nearly 1 million subscribers.

"This is not just a health care play," she said. "It's a gateway to Best Buy's ecosystem with a group of consumers that could arguably be called overlooked and underestimated when it comes to technology. It checks many boxes. It's not just a siloed, lateral play."

Jackie Crosby • 612-673-7335