McKinsey & Co.’s “Future of Wellness” survey found that 79 percent of worldwide consumers said they believe wellness is important, and 42 percent consider it a top priority. In fact, consumers in every market showed a substantial increase in the prioritization of wellness over the past two to three years.
Overall, McKinsey estimates the global wellness market at more than $1.5 trillion, with annual growth of 5 percent to 10 percent.
“A rise in both consumer interest and purchasing power presents tremendous opportunities for companies, particularly as spending on personal wellness rebounds after stagnating or even declining during the COVID-19 crisis,” McKinsey wrote in the study. “At the same time, the wellness market is getting increasingly crowded, creating the need to be strategic about where and how companies compete.”
The survey, based on one with roughly 7,500 consumers in six countries taken last fall, found consumers increasingly view wellness as extending beyond the traditional categories of fitness and nutrition. It broke down wellness opportunities into six categories:
- Better health, probably the most traditional wellness category, extends beyond medicine and supplements to include consumer medical devices and personal-health trackers. Growth is driven by consumers “increasingly taking their health into their own hands,” including through data-driven care and devices that help monitor personal health and symptoms, and digital devices that connect consumers to medical professionals.
- Better fitness has faced a challenging year, with gyms and sports participation restricted. A UK study found that most consumers worked out less after the pandemic lockdowns began, and many did not return to their previous exercise levels even as lockdowns were eased or lifted. McKinsey wrote, “However, fitness goals persist. Creative offerings (such as Peloton, Mirror and Tonal) that meet the needs of consumers in their homes have seen unprecedented growth in the past year.”
- Better nutrition has always been a part of wellness, but there’s greater interest in consumers looking to it to reach their wellness goals. More than one-third of consumers worldwide reported they “probably” or “definitely” plan to increase spending on nutrition apps, diet programs, juice cleanses, and subscription food services over the next year.
- Better appearance primarily involves wellness-oriented apparel (athleisure) and beauty products (i.e., skincare and collagen supplements). Service-oriented options include nonsurgical aesthetic procedures, such as microneedling, lasers and oxygen jets.
- Better sleep is a relatively new category popular with consumers. Traditional sleep medications such as melatonin are combined with app-enabled sleep trackers and other sleep-enhancing products (i.e., blackout curtains and gravity blankets). McKinsey said half of the worldwide consumers reported a desire for more products and services to meet the need for higher-quality sleep.
- Better mindfulness has gained mainstream consumer acceptance relatively recently in meditation-focused apps, such as Headspace and Calm, and relaxation- and meditation-oriented offerings, such as Travaasa and Soothe. McKinsey said, “During the COVID-19 crisis, reports of mental distress had increased globally with more than one-half of consumers in each of our surveyed countries saying they want to prioritize mindfulness more. Half of the consumers said they wished that more mindfulness products and services were available, indicating an opportunity for companies.”
McKinsey said better health consistently appears as the most important wellness dimension, and the one with the highest spending levels across every market researched. At the same time, relative responses vary in other categories. For example, consumers in Japan prioritize appearance while those in Germany emphasize fitness; respondents in Brazil and the U.S. are most interested in mindfulness, those in China and the UK in nutrition.
Its survey also revealed six consumer wellness-related trends that have gained momentum over time.
- Trend 1 | Natural/Clean Products — Asked about dietary supplements, globally consumers said, by 41 percent to 21 percent, that if they had to choose between more natural supplements and more effective ones, they would choose the more natural option. In skincare, 36 percent choose the more natural option, while 21 percent chose the more effective one. McKinsey advises companies to reevaluate their development road map to consider whether more opportunities are available to introduce natural or wellness-oriented products or acquire natural/clean product lines. This strategy could look different by segment: in apparel, products designed with organic/natural materials with sustainability in mind; in consumer health, natural/clean beauty products; in retail, merchandising with an eye to products that resonate as authentically natural
- Trend 2 | More Personalization — While many respondents indicated privacy is still a concern, more than 88 percent of consumers in the U.S., UK and Germany reported prioritizing personalization as much as or more than they did two or three years ago. Consumers in Brazil and China were found to be more comfortable trading privacy for personalization. Examples of personalization techniques included a wellness start-up providing personalized vitamin and supplement subscriptions based on information that consumers submit through a quiz. A fitness-tech company created a fitness tracker that collects physiological data to provide personalized sleep and fitness information to users. Membership includes the tracker, access to daily analytics and coaching and the ability to join online communities.
- Trend 3 | The Future Is Digital — A majority of consumer categories expect to continue to project more growth in e-commerce than in other channels over the next several years. Beyond building channel partner relationships, companies are encouraged to consider developing a supply chain, package sizes, marketing, or the like, specifically for e-commerce. For service offerings such as gyms, building app-enabled features can keep consumers engaged throughout the ecosystem. McKinsey wrote, “For example, one vitamin brand sold only online and known for being sustainable originally offered vitamins for women but has expanded to include products for men and children. Its ecosystem includes the company’s app, which is integrated into Apple Health and an active social media presence.”
- Trend 4 | Under The Influencers — McKinsey’s wellness survey showed more than 60 percent of consumers reported that they woiuld “definitely” or “probably” consider a brand or product posted by a favorite influencer. The study noted that one European fitness/apparel company heavily uses influencer marketing on Instagram and YouTube to reach its target audience of young fitness enthusiasts. McKinsey wrote, “Use influencers to win with your consumers across social channels, partnering with agencies to identify people who will be a natural fit with your brand and resonate authentically with your target consumer base.”
- Trend 5 | The Rise And Rise Of Services — Across countries, consumers are shifting toward services that address physical and mental health needs (i.e., personal trainers, nutritionists and counseling services) – services seen as enhancements, not a replacement, for the overall wellness space. Consumer healthcare companies were encouraged to consider diagnostics or coaching offerings that directly connect to the consumer. Fitness companies could consider offerings such as connected devices and virtual communities. McKinsey wrote, “Peloton expanded its service offering to include subscriptions for its fitness app, in-person studios and live virtual classes, allowing it to reach consumers who may not own Peloton workout equipment. The company’s sales soared in 2020 as the popularity of home workouts increased during the COVID-19 pandemic.”
- Trend 6 | Category Lines Continue To Blur — A majority of consumers report that they do not want a single solution or brand to help them with all facets of wellness, suggesting that targeted extensions are a more effective approach for companies. Companies are encouraged to assess M&A opportunities to gain entry into more categories within the wellness ecosystem. For example, McKinsey noted that Lululemon’s acquisition of Mirror gave it a digital offering to supplement its core fitness-apparel business. Lululemon has also experimented with nutrition, mindfulness and fitness offerings in stores through studios and community-based classes. McKinsey said, “These moves seem to align with the company’s brand messaging. Meanwhile, other mindfulness and fitness apps have expanded into “sleepcasts” or moved into personalized health coaching and disease management to promote better health outcomes.”
To read the full survey, go here.
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