A Marketer’s Guide To The Wellness Economy
How wellness and self-care have emerged as a powerful new value driver for brands across categories
We live in a stressful time. Smartphones won’t stop pinging, news cycles won’t stop accelerating, and the line between work and personal life is quickly blurring for many. We are sleeping less, working longer, retiring later, and generally less happy. Various socio-political and economic factors — such as the polarizing political climate, rising healthcare and housing cost, and image-obsessed culture — are contributing to our deteriorating state of wellbeing, and technology often plays an inadvertent accomplice, providing us with a constant connectivity that only seems to our compound our stress and FOMO.
Arguably, it all started with the 2008 financial crisis. Now, a decade later, the economy has bounced back, but our wellbeing somehow hasn’t. Such discrepancy, predictably, has created a huge consumer demand to feel better — physically, mentally, and spiritually — and given rise to a global wellness industry that is worth $4.2 trillion as of 2017, a healthy 13% increase from its 2015 market cap of $3.7 trillion.
Additionally, the fast spread of wellness economy is boosted by the millennial penchant for unique experiences. This is something that fitness and wellness-centric services can add to many product-oriented brands, and it also serves as an inspiration for brands looking to innovate their in-store experience and establish customer relationship beyond sales. The growing adoption of wearables has also contributed to the rise of wellness economy, as they present users with biometric data that could motivate them to take their health and wellness seriously. Plus, any photogenic new fad in wellness tends to spread like wildfire on Instagram, partly because they are designed to, further fueling the growth of the wellness economy.
The fast spread of wellness economy is boosted by the millennial penchant for unique experiences and further aided by Instagram.
Starting as an affiliate to the fitness industry with yoga classes and meditation apps, the wellness economy soon spread like wildfire to categories like healthcare, fashion, beauty, food, and travel and hospitality. Let’s take a look at these industries that are already actively integrating ideas and services from the wellness economy to answer this consumer demand, before we turn to the ones that are well-poised to start exploring wellness as a new value driver.
Healthcare Meets Wellness
The healthcare industry has an obvious and intrinsic bond with wellness. After all, there is no wellness without healthcare — everybody gets sick at least once in a while. However, unlike healthcare, which is a volume-based business that charges patients (and the insurance companies) on a “fix-by-fix” basis, wellness is a value-based business that requires constant maintenance and preventative measures. Increasingly, the line between healthcare and wellness is becoming blurry, with products like DNA-based custom vitamins, on-demand massage services, and direct-to-consumer medication brands like Hims or Keeps.
The line between healthcare and wellness is becoming increasingly blurry
Then there is Goop, the controversial brand that arguably ushered wellness sector into the mainstream. Founded by actress Gwyneth Paltrow, It was launched as a “lifestyle brand” by in September 2008, beginning as a weekly newsletter providing new-age advice and, later, wellness product recommendations. Goop has faced criticism for promoting and selling products and treatments that have no scientific basis, that are ineffective, or even harmful, and it is frequently ridiculed for hawking outrageously overpriced products. Yet, all that negative press has yet to stop this premium wellness-as-a-lifestyle brand from getting big funding and expanding into new territories, serving as a striking example of the strong momentum the wellness economy has accumulated.
It is also important to note that the rise of the wellness economy has also, to a certain extend, democratized the usual higher-end luxury wellness services, further expanding the reach of such services to a wider audience. This is largely thanks to the aforementioned digital-native D2C brands and new boutique spaces, such as WTHN acupuncture studio and the infrared sauna spas popping up all over the cities. The way they leverage digital channels and social media to target audiences and spread their brand messages are making once-costy wellness services more accessible and, in turn, fueling its cultural momentum.
The wellness economy also made strong headway in the fashion industry, especially in the athleisure sector. Some could argue that the rise of athleisure in fashion predates the wellness economy and has more to do with sports apparel brands entering fashion markets and the casualization of professional dress code. But looking at how athleisure brands have permeated every tier of the fashion vertical, from luxury fashion brands like Michael Kors and Balenciaga embracing athleisure to cult favorites like Alala and Lululemon, it is clear that fashion brands have jumped on the wellness train as a new value driver.
Furthermore, the wellness factor is also changing the way some fashion brands design their in-store experience. For example, Bandier opened a new flagship store in NYC with a dedicated workout studio featuring classes with top fitness brands and instructors to teach yoga and meditation, making its store both a retail channel and a wellness destination. Customers can also earn store discounts by attending classes there, creating a feedback loop that further drives sales.
The wellness economy is changing the way some fashion brands design their in-store experience.
Looking ahead, the rise of smart clothing could point to how wellness economy will integrate deeper into fashion with the aid of technology. Fashion brands like Levi’s and startups like Hexoskin are already exploring the potential of adding fitness-related utility to everyday wear, with great potential of merging biometric sensors into clothing to capture more data and promote healthy lifestyles.
The emerging trend of slow fashion also incorporates part of the wellness movement to advocate for sustainable, ethically sourced fashion that focuses on comfort above all. Ruh, for example, is a slow fashion brand that positions itself as the antidote to Instagram brands that we consume via endless scrolling. It’s meant to turn down the volume on social media noise and make a case for both taking care of ourselves and the environment.
Beauty from the Inside Out
The beauty industry is another market that has an intrinsic bond with the wellness economy. The hip beauty brands today are just as likely to position nutrition and skincare products as part of their lineup as makeup products. The message of inside-out beauty is spreading to more beauty brands, especially among startups like Glossier and Beautycounter, as well as skin and hair supplements. HUM Nutrition, for example, is a startup that asks customers to take a quiz about their beauty routines and discover vitamins & supplements for flawless skin, fuller hair and a healthy beautiful body.
Healthier ingredients are quickly becoming table stakes for many beauty brands as consumers move away from artificial additives. Personal care incumbents like P&G and Unilever have backed natural and organic beauty brands and exploring new ingredients that are meant to be calming and anti-stress, while beauty startups typically emphasize the healthy, ethically sourced ingredients they use. Moreover, at-home beauty devices, such as dry brush or jade roller, are also gaining popularity, further extending the wellness products into beauty markets and adjacent categories. Overall, by incorporating elements of the wellness economy, it positions beauty as an active and positive contributor to the health and well-being of consumers.
Healthier ingredients are quickly becoming table stakes for many beauty brands
You Are What You Eat
Achieving wellness through healthy diets and supplements is a major trend gaining traction across food-related CPG, QSR, and grocery markets. The rise of premium, gourmet grocery stores like Whole Foods and Sprouts Farmers Market are gaining market share, and small-format convenience stores like The Goods Mart and Choice Market are differentiating themselves from the incumbent national chains with curated collections of healthier products.
Meanwhile, direct-to-consumer food delivery upstarts like Sakara and Daily Harvest are chasing after a similar set of health-conscious consumers with plant-based, “better-for-you” meals that promise to enhance wellness and boost energy. While the trend of “superfoods” has gone through several cycles of fads (think the likes of acai bowls and activated-charcoal food — all picture-perfect and Instagram-ready), the wellness positioning is showing no sign of waning.
As with healthcare products, food could also become more customized. Nestle, for example, has kicked off a pilot program in Japan to create and sell personalized nutrition plans based on DNA. There is also LifeSpan Medicine, which is a high-touch concierge nutrition solution provider. They will come to your home after your signup, take your blood/saliva/urine for analysis, and then set you a hyper-customized diet and exercise plans.
As with healthcare products, food could also become more customized and wellness-oriented.
In addition, some food brands are also partnering with other wellness-oriented businesses to explore new distribution channels. Startups like Kettlebell Kitchen and Territory Foods to bring healthy, pre-portioned meals for fitness-focused consumers in gyms, and fast-casual chain Zoë’s Kitchen is working with American Airlines to offer healthy options on domestic flights. As wellness invades non-traditional outlets, food brands should have more venues to explore.
Sleep Your Way To Wellness
Sleep and sleep tech are recognized as an important part in achieving holistic wellness, and nowhere is this more evident than the mattress business. A slew of D2C mattress brands, led by Casper, are successfully disrupting the mattress market and pushing category incumbent Mattress Firm to bankruptcy. Their convenience-driven packaging and online distribution rightfully deserve a lot of credit, but their wellness-oriented positioning and in-store experience are also part of their success. Instead of treating sleep as an isolated daily activity, these new mattress brands weave wellness into their brand narratives, positioning quality bed times as a crucial part in the pursuit of wellness.
Sleep and sleep tech are recognized as an important part in achieving holistic wellness.
It is not hard to see why such positioning works. According to recent studies, more than one-third of American adults don’t get enough sleep, with over 50 million of them suffering a sleep disorder. To address this widespread issue, a number of sleep brands are cropping up products or services design to facilitate deeper rest. For example, Casper and audio fitness app Aaptiv partnered to offer workouts designed to help users achieve better sleep. The new mattress leader also opened “The Dreamery” — a nap lounge with complimentary beverages and other post-nap amenities for on-demand rest — as a way to promote its products and help city dwellers relax and recharge. As Casper plans to expand its retail footprint to 200 stores across the nation, we expect to see it further plays up the wellness factor to craft a unique in-store experience.
More companies are developing platforms and products that monitor sleep patterns and variations to provide users with personalized insights for better rest. Kickstarter project ZEEQ, for example, is a connected pillow that analyzes collected data to intelligently wake a user with a smart alarm at an optimal phase in their sleep cycle. Popular wearable maker Fitbit now also enables sophisticated sleep tracking via newer products and provide users with tailored guidance for restorative sleep.
Travel and hospitality is also a major sector that is quickly catching on to the wellness economy. Though this may not be a brand new concept for this sector, more and more wellness-centric initiatives are being extended to new spaces. Airlines, for example, could benefit from partnering with fitness and wellness service providers at airports to improve the waiting room experience and make air travel a little less stressful. Some airports in Asia are already experimenting with on-site movie theaters and high-end spas to help travellers de-stress. The San Francisco International Airport now has a yoga room for anyone who wants to get some quiet workout in before boarding. Time will tell if such trends spread to other transportation hubs or more western markets.
Some hospitality brands like Hyatt and Moxy hotels are now providing guests with mental health and mediation services throughout the travel journey. Hyatt has also acquired boutique wellness resort and spa companies Miraval Group and Exhale to build out its wellness services. Convenience is also a focal point for hotels to provide guests with a stress-free stay. Westin Hotel has an activewear rental program that allows guests to travel light and rent running shoes and workout cloth from New Balance when they want to work out.
Moreover, wellness tourism is also on the rise, as more and more travelers look to get away from the stressful daily grind to partake in physical or spiritual wellness activities at exotic locales. This is the industry’s fastest growing sector with a 10% growth this year, making it a $500 billion market, according to Lonely Planet. Some fitness service brands, such as ClassPass and Equinox, have also entered the travel sector with wellness-oriented day trips and retreats, further pushing the wellness economy forward. Ultimately, consumers are seeking healthier and less stressful travel and hospitality options, which brands can leverage to differentiate their guest experiences.
Wellness tourism is also on the rise as the travel industry’s fastest growing sector with a 10% growth this year.
Next Frontiers For Wellness
The booming wellness economy serves as a strong value driver for all the aforementioned industry verticals because today’s wellness-conscious customers are constantly looking for services and products tailored to their lifestyle that help them de-stress and take care of themselves. As consumer expectations for wellness continue to rise, more industries should consider incorporating wellness into their product offering to cater to customers looking for cross-category experiences to mimic their desire for wellness in their daily lives.
Consumers are looking for cross-category experiences to mimic their desire for wellness in their daily lives.
The driving experience is very much focused on safety and comfort today, but tomorrow’s auto brands may need to consider making wellness a prominent element of their in-car experience, especially as autonomous vehicles start to roll out. IKEA recently released some intriguing driverless car concepts they designed, envisioning some as either sleep pod on wheels or meditation room on wheels.
Similarly, brands in financial services, gaming, home goods, and physical retail should also take the wellness economy into account when looking for differentiators and new value drivers. For instance, financial service brands can prioritize rewards that promote wellness and link the positioning back to financial wellbeing to create a cohesive brand message. Home goods brand should also seize the growth opportunities that wellness economy provides to come out with specialty products. If Peloton can sell home gym equipment at a premium and IKEA can come out with an entire furniture collection that promotes the idea of zen, there is certainly a market for at-home wellness.
The future of wellness is shifting towards selling consumers on a holistically healthy lifestyle, and it will archive that by integrating with products and services across categories. Just like the way technology has disrupted and become a new value driver in many industries, so would wellness impact industries and reshapes consumer expectations. Therefore, brand marketers should consider the needs of an increasingly health-conscious consumer base and find ways to make wellness part of brand messaging. Making healthy lifestyle experiences a core part of a brand’s offerings is an optimal way for brands to capitalize on this booming economy.
Making healthy lifestyle experiences a core part of your brand’s offerings
Exploring potential cross-industry collaborations is a good place to start. Earlier this summer, Delta teamed up with Equinox to introduce a workout designed to fight jet lag. Travellers can bring their Delta ticket to an Equinox location in select cities and get a free workout session. The campaign was also launched in conjunction with the debut of Delta’s new Airbus A350, with features designed with jet lag prevention in mind. Sometimes, brands within the wellness economy also join forces to cross promote their wellness-centric aspirational lifestyle to customers. For example, Equinox partnered with Glossier in early 2018 to allow Equinox members to try on Glossier products after a group fitness class.
Authenticity and accessibility are also key factors that brands will need to heed when exploring wellness as a value driver. Too often in campaign implementation, elements of wellness economy end up being mere window dressing designed to grab attention, or worse, as a luxury add-on touted as a new status symbol to be amplified via social channels. Neither of those approaches truly add value to a brand experience nor point to a sustainable customer relationship. Granted, some segments of the wellness economy are intentionally positioned as an aspirational luxury (see Goop), but as this trend continues to grow, the wellness economy will need to become more inclusive and accessible, especially for consumer brands, so as to avoid risks of customer alienation.
Authenticity and accessibility are also key factors that brands will need to heed when exploring wellness as a value driver.
At the end of the day, personal wellbeing is a very delicate and intimate matter, and brands that can successfully leverage the wellness economy to take care of their customers will gain a cornerstone to build a lasting customer relationship and foster trust. With brand trust becoming increasingly important, wellness may just be the key for many brands to unlock consumer access across categories and find new growth areas.