How Consumer Power is Driving These 3 Transformative Industries in 2018
Health tech, wellness, and retail. These were the top 3 industries that most frequently populated my inbox and newsfeeds in 2018. They also happen to represent the three most important aspects of our lives: the way we manage our health, better our lifestyle, and spend our money. Ultimately, consumer power drives these shifts, as the ones who win are ones who can provide consumers social utility, integrate in their lives across channels, and represent their better self.
Health technology
This year presented a flurry of consumer device companies growing their health portfolio. This makes perfect sense. Attaching features that promote health and wellbeing on an existing essential product is a brilliant way to achieve mass distribution.
Add health feature on consumer devices
People are willing to share their wallet for things that represent their aspirational self.
This is why an Apple Watch with fall detection would have much greater commercial success than PERS pendants (personal emergency response button). People would wear a watch (practical & essential) that tracks their activities and represents their motivation for a healthier lifestyle (which happens to also detect falls), rather than a pendant with a sole purpose of calling for help, which waves a white flag to the world about their frailty.
The Apple watch also just released its software update for its ECG reading feature (detecting heart rhythm), which instantly put a medical device onto millions of people’s wrists. Again, you didn’t set out to purchase a device to measure your heart rate, the watch delivers value in many ways to your life and just happens to also have a ECG measuring feature. Already doctors are experiencing a wave of self-diagnosed heart conditions. Employers and insurance companies also have growing interest in using these consumer devices to improve their members’ population health.
Creating Health “Hub” via hardware & software
Amazon is working with Arcadia Group to offer line of home health products on Amazon under the brand “Choice”, which so far include blood pressure and blood glucose monitors. These devices are compatible with Apple Health, where readings can be stored in the iOS personal health records. Consumers can finally access their health info at the palms of their hands. Apple also later opened its Health Records API for developers to create an ecosystem of health apps. Creating a health data hub represents Apple’s key strategy and differentiation in entering healthcare (something Google has unsuccessfully attempted in the past). Everyone wants to be the hub. It shouldn’t be a surprise that these devices work with Alexa to remind users to take their blood pressure. Omron, maker of blood pressure monitors, also announced its Alexa skill that can remind people to take their blood pressure. Clearly, Amazon uses its smart speakers to serve as the physical hub for health monitoring in people’s homes. At the same time, Amazon can also leverage its mass distribution and private labels to become the e-commerce hub for health devices.
This year proves that the line between health and wellness begins to blur as consumers gain more control of their health through great consumer products and as the focus moves from reactive sick-care to preventative health-care/wellness.
Wellness
The wellness economy is a $4 trillion industry globally. The global annual healthcare spend is over $7 trillion. The two clearly can’t be separated as the upstream effects of the growing wellness industry could potentially mean downstream improvement in population health and eventually lowering of the healthcare spend.
Here’s how a day of a wellness consumer could look like:
- Wake up and make a Welleco super elixir drink
- Take a spin class on Peloton bike at home
- Change into workleisure outfit by Ministry of supply
- Go to work, use self-care app Shine, covered by work benefits
- Wind down at night with a 15 min meditation on Headspace
The wellness industry is flourishing because these products appeal to people’s desire for an aspirational lifestyle. Living “well” and healthy is an enjoyable process, rather than a chore.
Products designed to reward TODAY
Great wellness products enjoy wide consumer adoption when they directly deal with the present bias of wanting to reap reward now rather than in the distant future. For example, it’s harder to convince someone to exercise 60 minutes today to lower their risk of cardiovascular disease in 10 years. The starting point of wellness tech is that the product easily integrates into daily life and provides instant rewards that continuously motivate healthy habits. For example, a sleek Peloton bike allows you to walk into any cycling class in your living room (convenient), and its companion app presents your performance metrics and progress over time (immediate sense of accomplishment).
Workplace wellness
We spend more time at our workplaces than in our homes. Employers and insurers realize that they have a major role to play in improving population health when they improve employees’ overall health and wellness. And that has a positive impact on their bottom line in terms of productivity and turnover.
Wework created Rise by We, a wellness facility within their shared work spaces. New York Times perfectly summarizes this holistic approach with its editorial “We work, we live, we work out”. The space is complete with boxing studio, yoga studio, hot tub, and more. It’s also decked with snacks and beauty products, many of which are from its tenants’ brands.
Retailers also see the wellness trend
This is probably most represented by the success of Goop, Gwyneth Paltrow’s lifestyle brand that’s now worth $250 million. This summer, Anthropologie launched the Wellness section on its e-commerce store and a number of its stores, focused on products for mind, body, and home. IKEA released the Hjärtelig collection of furnitures to turn living rooms into wellness sanctuaries.
Retail
The narrative has transitioned from “grow e-commerce and defend Amazon” to “retail apocalypse” to “retail reformation”. Recognizing today’s consumers want not only the convenience, but also participation in a seamless shopping journey from product co-creation to discovery to purchase to socializing within their community.
Blending digital & physical shopping experience
This year sees more online-only businesses creating brick and mortar presence. Amazon launches a 4 star store in New York. Away has grown its retail footprint to 7 stores across US. and London, UK. Glossier, a poster child for successful, rapidly-growing direct to consumer brands born and grown online, just opened its flagship store in New York. While Glossier enjoys the success of its digital commerce, it also understands the importance of amplifying the emotional journey of shopping from online to offline. Its first flagship store in New York City is a beautifully designed space that allows people to interact with the brand physically and create social content in the space. It’s making a dent in the beauty industry and the e-commerce concept (emotional commerce as Emily Weiss calls it) by being obsessed about connecting with the consumers.
Broadening scope of function of physical stores
With US mall vacancies at 7-year highs, smart retailers recognize that the economics are no longer sustainable for brick & mortar store to serve as just a point of sale. Rather, they can be used to provide additive experience of brands and also serve as social spaces. Today at Apple uses Apple’s retail space to educate and create a strong community of creatives. It has held over 18,000 sessions a week, educating communities new skills with its sleek products.
Restoration Hardware invested $50 million in a gorgeous showroom in the Meatpacking District in Manhattan. This space is far more than just a place of transaction. It’s a design firm and even a place of social gathering. There are private workspaces for the company’s designers, and the rooftop floor is a full restaurant, as “hospitality is intended to amplify the brand” in the words of CEO Gary Friedman.
What are the top 3 industries that really captured your screen time in 2018? Share in the comments below, and hit the 👏 if you enjoyed this piece.
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