Last week, GN Hearing announced the acquisition of New York based Lively – a leading online direct-to-consumer hearing care retailer for approximately $95 million dollars.
GN Hearing CEO, Gitte Aabo, returns to This Week in Hearing to discuss the motivation behind the acquisition with Bob Traynor. The pair discuss how the move strengthens GN’s position to better meet the needs of consumers with hearing loss by combining the online offering from Lively along with the company’s network of independent professionals that can provide service in-person.
Bob Traynor 0:10
Welcome to This Week in Hearing where listeners find the latest information in hearing and hearing care. Hello, I’m Bob Traynor, I’m your host for this episode of This Week in Hearing. News really travels fast across the oceans and around the world. As this week, GN Hearing purchased Lively hearing aids. And as many of us understand, Lively is a hearing aid manufacturer that offers their products direct to consumers. Once again, my guest is Gitte Aabo, CEO of GN Hearing to discuss their latest acquisition with us. Thank you again Gitte for being with us once again. I know we worked together last August, and it’s been my pleasure to meet you and hopefully have some discussion once again, especially during this holiday season when King Square’s all lit up and Tivoli and all the beautiful spots around Copenhagen. And I know that some of the visitations are a little bit limited these days because of the, because of the pandemic, but still one of my favorite beautiful spots in the world. So I think our guests would be most interested in listening to maybe the the orientation as to the motivation behind the acquisition of Lively from GN’s point of view, or from GN Hearing’s point of view.
Gitte Aabo 1:58
Yeah, so thank you, again, for having me here today. And look, I’m obviously happy to speak to, Lively and what drove the acquisition. So, Lively is, as you’ve already alluded to, a leader in online audiology, or tele-healthcare if you like, within the the audiology space, and we see this as a as an opportunity to reach more patients than what are helped today. If you look at the general market, we only help one and five, with a hearing loss today, whereas four in five with a hearing disability does not find the help they need. We believe that in order to reach that broader audience, it worthwhile both considering the channels, but certainly also considering the products we offer. And the and I think in this case, by having the acquisition of Lively, it’s an opportunity to find another channel to reach a broader audience than what we do through the traditional channels.
Bob Traynor 3:15
Okay, and now, how does this kind of a direct to consumer channel provide more benefit for patients? I mean, how does this actually reach more people than it would say through clinics and so on from GN Hearing’s point of view?
Gitte Aabo 3:43
Well, I think interestingly, is that what we find among the users that approach Lively is that on average, they are close to 10 years younger than what we see in the clinic. And they are probably also a little bit more tech savvy. However, what we also see is that, you know, around two thirds of the people that approach Lively, they are actually looking for a combination of an online and offline experience. So those are people that are not really helped by Lively today. And that’s also one of the big opportunities we see with the collaboration, or the acquisition of Lively, that we can better help these two thirds of people approaching them because they can then you know, be helped by the independent hearing professionals that we have in our network. So kind of combining the online and offline experience.
Bob Traynor 4:39
So this is almost like the, like looking at the the savvy younger Baby Boomers and maybe the Generation X people and, who are really pretty tech savvy, and so they can often figure some things out on their own and, and interact with us The products and the technology and the interactions of the of the products with the environment and so on better than them say the older Baby Boomers might interact who would come to the clinic?
Gitte Aabo 5:16
Yeah, I think that’s a, that’s true. And that’s also why we really see this as a way to expand the market. I think as you allude to, there will continue to be a big part of people that that needs a hearing aid that wants to go to the clinic and get the help. That the audiologist and service the audiologist provide, I see that continue. Because a lot of people are quite elderly, and really appreciate that kind of help. But here we are reaching a slightly younger audience. And I think that is really important, because we all know that the sooner you start on your hearing journey, the better.
Bob Traynor 6:00
Okay. So, is this something that will also benefit the professionals that serve in the various audiology clinics around the world and dispensing clinics around the world?
Gitte Aabo 6:18
Well, I mean, we see it as a as a way to, we actually see a big opportunity, if you like, in combining what Lively offers, which is an online opportunity, with the experience in clinic, cause as I alluded to, we actually see two thirds of the people approaching Lively wanting to have that combination of experience. So you know, you might look for and acquire a hearing aid online, but then in order to get the fitting, maybe you prefer to do that in the clinic, rather than do that online as well. So I really see the combination as something that benefits both worlds, if you like.
Bob Traynor 7:07
So, so basically, then you can, someone could order their products online and get their Lively devices, but if they’re having issues, they could take it to a to a ReSound facility, and someone would work with them somehow.
Gitte Aabo 7:26
I think either way, I mean, obviously, the hearing aids needs to be fitted in order to give people the maximum experience and that can then either happen online or virtually, by the service provided by Lively, or it can happen in the clinic, or it can be a mix. And that I think is what makes it really unique, combining lively with our network of independent audiologists
Bob Traynor 7:56
How does GN anticipate the direct to consumer market evolving? And my guess is that, that because of the some of the ways in which you and your colleagues see the market evolving, this was one of the rationales behind the purchase of the direct to consumer product.
Gitte Aabo 8:21
Yeah, so I think we have all been sort of watching when, when the OTC legislation would come out, and we saw first draft of that a couple of months back and obviously is still in process by the FDA. And I guess we’ll see final legislation coming out during 2022. And clearly this is a space we’re watching. I think for me, it speaks to this about expanding the markets and maybe also recognizing that in order to reach perhaps a younger audience. It takes both, different channels, and also potentially different products, in order to make something that is appealing for a younger audience. And I think the OTC legislation might pave the way for that. Now, obviously, we need to see how it finally pans out. But I would say also that regard the DTC opportunity is obviously interesting.
Bob Traynor 9:30
Yeah. All the changes that are going on within the industry these days, we’ll make some some major kinds of differences. You know, I was I was amazed at the exception of some of the direct to consumer products as well. You know, as someone who’s been around the industry for a long time, I do remember when people would be like, 95 years old and half dead before they would think about even considering going to an audiology clinic and being fit hearing aids. And, and nowadays, it the stigma is still there, but it’s not quite as big of an issue. But I think almost as big of an issue is the idea that, ‘okay, I’m busy and I got all this stuff going on, I just don’t have a lot of time to go down and sit there, listen to some people, some people talk to me and get five hearing tests and do these different kinds of things’. When I can call up and somebody else send me products in the mail – I’m used to getting those in the mail, particularly after the pandemic. And so now, now we have the capability to do that. My guess is that that that ReSound will plan, still plans to have the support for those D2C, direct to consumer products available with a phone bank or some sort of support from audiologists and dispensers.
Gitte Aabo 11:06
No, absolutely. I think one of the cornerstones in our sort of hearing philosophy is about providing an individualized experience. And that’s where I think, you know, the whole combination of, obviously, having a great hearing aid, but also getting great service and getting it fitted exactly to your hearing loss is really important. So, yeah, I mean, we definitely see the audiologist continue to play a major role in that. And, again, we see Lively as an opportunity to expand the market and reach a younger audience, so they don’t wait until they’re 95. Hopefully, embark on the hearing journey already when they are in their 60s, or maybe even younger,
Bob Traynor 11:58
maybe even younger. Yeah. Well, again, our goal today Gitte was to primarily just kind of see where GN Hearing may be relative to the idea of their newest product, the direct to consumer instrumentation from Lively, Now, will the will the product makeup change very much? Well my guess is they’ll they’ll probably be, there’s always a group of engineers kind of sitting in the back room saying, ‘you know, I think we can fix this up to make it even better than it is’ and on and on and on. So will the products pretty much stay the same for a time? Or will there be some increase in with the usual ReSound tenacity to facilitate and make their products even better.
Gitte Aabo 12:51
But I think as you point to, I think it’s in the DNA of GN that we constantly want to improve. Both our hearing is, personally also the whole experience around that. And I think already we are offering a lot in that regard. But I also see opportunities to do even more. And again, here, I really believe in, in also being able to do that together with the with the independent hearing professionals. Because, you know, a lot of our users are still elderly people. And I think a lot of them really care about this service, and if you like, personal care that they achieve in the audiologist office. So it’s the whole combination that I’m quite excited about and I think will over time provide an even better customer experience.
Bob Traynor 13:53
Fabulous. I know that that you have quite a tight schedule this evening, this afternoon here in Copenhagen. And again, it’s been my pleasure to have you take the time, energy and effort to spend a few minutes with us here at This Week in Hearing and good luck to you and ReSound and all your colleagues, as well as have a very happy holiday in the beautiful city of Copenhagen.
Gitte Aabo 14:27
Thank you very much, Robert, thank you for having me and also great holidays to you.
Bob Traynor 14:33
Thank you very much
About the Panel
Gitte P. Aabo is the President & CEO of GN Hearing and a member of the executive management since 2019. She is a member of the Committee of Directors of Danmarks Nationalbank (the Danish National Bank), member of the board of HIMPP A/S, ALK-Abelló A/S, and Union Therapeutics. Ms. Aabo holds an MBA from Copenhagen Business School.
Robert M. Traynor, is a hearing industry consultant, trainer, professor, conference speaker, practice manager and author. He has decades of experience teaching courses and training clinicians within the field of audiology with specific emphasis in hearing and tinnitus rehabilitation. He serves as Adjunct Faculty in Audiology at the University of Florida, University of Northern Colorado, University of Colorado and The University of Arkansas for Medical Sciences.