The global health and wellness market has reached a market evaluation of $1.5 trillion and growing at a rate of 5-10% per year, according to a recent McKinsey survey. Consumers are increasingly concerned with their physical and mental health in the wake of the pandemic and the current market suggests they’re willing to pay for the products and services they believe in.
The health and wellness market has also changed by definition over the years. These days, health and wellness blankets roughly six categories including health (vitamins, over-the-counter products, etc), fitness, wellness-oriented nutrition, wellness-oriented appearance, sleep, and mindfulness.
The specifics of these categories differ from country to country, but the trajectories of each remain positive on both regional and global scales. Further, we can expect a greater shift towards services including personal training, nutritionists, and counseling that addresses physical and mental health in 2022.
But that’s not all, as consumers expect more personalized, digital services that span across numerous categories. The future of this $1.5 trillion market is still to be determined, but identifying consumer trends and behaviors should give retailers the confidence to adopt new practices in 2022.
Personalized treatments and services
Of the health and wellness trends, personalization has caught the attention of the global consumer market. What’s surprising, however, is that consumers are increasingly willing to give away their personal information to receive personalized treatments and services.
Consumers are also prioritizing personalization now more than they did just a few years ago. Consumers in China and Brazil are most willing to trade privacy for personalization, but the percentage of consumers in the US, UK, and Germany who’ve reported that they prioritize personalization stands at 88%.
“Based on our research, consumers aren’t necessarily demanding individualized wellness products. It’s more about mass customization. Consumers want a product that is tailored to them and that works for them, but that doesn’t mean companies can’t do that in a smart and cost-effective way,” said Anna Pione, a Mckinsey partner in NY.
For retailers, learning how to scale personalized content will make the difference between growing quickly and stalling out. Striking that balance is difficult, but a clear road map that includes both hyper and semi-personalized offerings, target demographics, and product variation is a good place to start.
“It’s not doing it one-to-one but rather creating a categorization or clustering of subsegments of consumers—for example, women between ages 35 and 40—and then developing specific vitamin products or skincare products for them,” said Sandra Welchering, a Mckinsey associate partner in Berlin.
Natural products and wearable tech
Consumers are overwhelmingly looking for personalized products and services, but there remains a distinction between natural and digitally-native health and wellness offerings. The former includes areas such as cosmetics, skincare multivitamins, and sleep enhancers—all of which are increasingly advertised as ‘authentically natural.’
The latter exists primarily via our personal devices and digital channels in the form of health and wellness apps, fitness wearables, and even personalized exercise equipment like Peloton. Consumers in China and Japan report the highest share of digital wellness spending, but unlike many of the natural remedies above, these digital products are overwhelmingly packaged for e-commerce.
“Some of the most interesting innovations I’ve seen are wellness products that span across a number of those categories,” said Pione. “The product group that comes to mind, first and foremost, are wearables and fitness trackers, which combine tech with support on sleep tracking, exercise tracking, and in some cases nutrition and mindfulness as well.”
Paired with “natural” supplements, which consumers are now prioritizing over more “effective” options, wellness offerings look a lot different than they may have in the past. For this segment of the retail market, companies will need to design organic, natural products with consumer health, authenticity, and sustainability in mind.
Whether or not these wellness offerings are packaged for e-commerce, brands have an opportunity now to create omnichannel marketplaces that maintain customer engagement via company apps, social media, and other digital channels.
Whether it’s personal trainers, counseling services, or nutritionists, wellness services are growing in popularity across consumer demographics. As the needs of consumers’ mental and physical health adapt to the current climate, we can expect these services to provide a well-needed enhancement to the overall wellness space.
One of the most well known subscription services in the wellness space is Peloton, which expanded its service offerings to include virtual classes, in-person studios, and a fitness app. Peloton’s sales soared in light of the pandemic, but the trend towards at-home workouts has continued well into the later stages of COVID-19 as well.
“The fitness industry has been innovative—and I’m thinking specifically of Mirror, Tonal, and Peloton—in their ability to replicate the environment of the gym in your own home. It’s just a much higher-quality experience than it used to be years ago,” said Pione.
Crucially, competing fitness brands will need to follow in Pelaton’s footsteps by engaging with customers using digitally-native services. Beyond gyms and exercise equipment, fitness brands can reach larger audiences by banding customers with virtual communities and connected devices.
When it comes to the products and services that resonate most with consumers, Pione argues that offerings that span across different wellness dimensions are the most effective.
“If you’re a fitness company, can you also play in apparel or in mindfulness? So really thinking about, “What is our offering today, and what could our offering be in the future? How should we shape our overall portfolio to better serve our consumers and serve them more holistically and expansively?” She said.
Consumers want to engage with brands that offer products and services across categories, so learning how to blur the rudimentary lines between digital, personalized, natural, and health offerings is key for retailers now and in the future.
Lululemon, for example, recently acquired Mirror in an effort to offer digital solutions to supplement its fitness-apparel business model. This move, and the retailer’s recent experimentation with mindfulness, nutrition, and community-based classes, put the brand into a category of its own.
With the help of influencer culture, the health and wellness market has a lot of leverage over consumers.
According to Mckinsey, 10-15% of consumers in the US, Europe, and Japan say they follow social media influencers and have made a purchase based on their recommendations—and that percentage is even higher in countries like China and Brazil.
There is, however, reason to believe consumers are getting better at sniffing out influencers who are solely recommending a product or service because they’re being paid to do so. When this is the case, brands will need to endorse offerings using credible influencers who have a background in a specific health and wellness category.
Furthermore, brands should seek influencers who are a “natural fit with their products or services, and therefore, even if there is an economic transaction going on for that recommendation or promotion, it is still done in a way that comes across as much more genuine and authentic to consumers,” explained Pione.
A competitive market
Chopped up into six categories including health, fitness, wellness-oriented nutrition, wellness-oriented appearance, sleep, and mindfulness, the health and wellness industry is exceedingly prominent in our day-to-day life.
From what we’ve seen, the global market looks more diverse, agile, and personalized every day. At the same time, there’s more competition and brands will need to be purposeful about their offerings in 2022 and beyond.
Consumer trends and behaviors are shifting, but the pandemic left a significant imprint on today’s most prevailing trends. Instead of falling back on old practices, brands should act with confidence knowing that consumers want more from their personalized products and services.