The modern entrepreneur

Thinking of taking a leap into the wellness industry? Or looking to better connect with your customers? Our Singapore-based collaborator Karmen Tang tackles consumer trends in the wellness industry, making sure brands can better meet the needs of their audience.

Consumer trends in the wellness industry
The global wellness economy is now a $4.5 trillion market, according to figures from the Global Wellness Institute this year. The top sectors with the highest opportunities are beauty, physical activity and nutrition. The pandemic has made people more conscious of their health from a holistic perspective, causing a huge boom and opportunities across the wellness industry.

Wellness consists of better health, fitness, nutrition, appearance, sleep and mindfulness. And what all of these brands have in common is their focus on supporting positive living. Their focus is on making the daily lives of consumers healthier, happier and more meaningful — they’re important brands for the economy, especially during times of crisis.

So, we dive a bit deeper into the consumer trends in this industry to understand how brands can better meet the needs of their target audience.

Trend 1: big is no longer better with influencers

Brands have and should move to explore other options, such as working with micro-influencers (under 200k) and smaller-scale influencers known as “key opinion consumers” (KOCs). These are consumers with smaller followings (usually in the hundreds) who are largely focused on product reviews. KOCs offer relatability, authenticity and tend to have more trustworthiness. They are far less expensive, a lower-risk alternative and may even offer higher conversion rates.

Potential strategy for wellness brands: Review and revise contracts with bigger influencers that have lower return-on-investment and conversion rates. Consider KOCs in launch campaigns and other marketing strategies.

Brand example: Sneaker brand, Lane Eight, gained wide exposure and popularity through strong social media presence and influencer marketing. It has been aggressively seeding influencers, personal trainers and kitting out gyms and sports teams, so its shoes became recognised for their performance and quality itself.

Photographer credit: Studioleisinger.com

Trend 2: social commerce

Shopping has always been a social event and even now with e-commerce, we’re seeing a new wave of it unfold. Advances in the technology that runs social media and behaviour from Gen Z shoppers and millennials are leading the charge. Social commerce means buying from people we follow, rather than going to stores and purchasing directly from brand websites. It is what happens when a brand takes the best of e-commerce (your shopping experience via a website or dedicated branded app) and combines it with social media.

Instagram checkout is part of a larger shift of the US social networks towards e-commerce. Social commerce is an $89.4bn market right now, and it’s projected to grow to $604.5bn in the next seven years. Social commerce is not e-commerce. Instagram has recently been praised as our “own personalised digital mall”, meaning this will introduce new revenue streams, business models and marketing strategies.

Potential strategy for wellness brands: Think about all the possibilities for your customer’s shopping experience. Audit your business model and ask if it is future-proofed for the way the consumers are changing how they shop? Make sure you don’t put all your eggs in one basket by purely focusing on one channel. With Instagram constantly changing its algorithms, this can mean small brands lose visibility — and what if Instagram were to disappear altogether? Never underestimate the power of diversification.

Brand example: Fabletics has an amazing example of social commerce testimonials employed across a variety of social channels — and easily turns testimonials into a direct sales tool. It’s essentially a next-level type of user-generated content. Fabletics has built out a specific page on its website to feature these posts and testimonials from other platforms such as Facebook and Instagram.

Trend 3: Ethical, natural and clean buzz-words are no longer a USP

Consumers want clean products across skincare, cosmetics, vitamins, subscription food services and sleep enhancers — but they’re also getting much savvier about descriptions and USPs.

A growing appetite for ethical, science-backed brands has continued to drive the launch of new brands across the fast-growing beauty and body category. Forward-thinking brands are racing to develop new products that really understand these rising consumer values. Responding quickly with on-trend products that fill a gap in the market and cater to underserved demographics, indie brands have found their white space, priming themselves for success.

Larger players, meanwhile, have begun to make a collective effort to become more sustainable and are even buying out smaller start-ups to remain nimble and maintain that start-up mentality.

Potential strategy for wellness brands: Re-evaluate product development and your supply chain. Consider how you can create more opportunities to bring products to the market that are a part of the circular economy. Map out how you communicate this transparently to your consumers across all channels. Does the brand have a clear tone of voice?

Brand example: Dr Enzyme is a living plant enzyme family soapery rooted in traditional Chinese medicine. The cleansers are ‘soap-free’, with fermented soap-nuts, tea seeds and honey locust forming the basis of all the cleansers.

The brand taps into the consumer rooted in values around holistic wellness by bringing back the ancient, natural way of cleansing. It’s inspired by its ancestors and adapted to modern living.

@drenzyme.studio

Trend 4: more personalisation, please

The majority of millennials are more comfortable trading privacy for personalisation, versus baby boomers who are far more private. Smart speakers were some of the first products to set the trend for personalised products. Personalised DNA tests have also been trending. They allow consumers to better understand their unique genetics and biology to help optimise and adjust the right habits catered for their health and body type.

Living in this information age, we have more knowledge about our preferences, likes and dislikes. And this drives greater demand for diversification in products that are better suited to each individual.

Potential strategy for wellness brands: Develop personalised products for each consumer persona. Think about the personalised marketing capabilities to target the precise consumer segments that may be most interested in your products, with messaging and storytelling tailored to those consumers. Introduce personalised messaging to your customer journey map and tailored offerings to your product road map. If you’re a company that holds large amounts of consumer data, publish clear and transparent ‘privacy policies’ across all your marketing materials.

Brand example: Care/Of is a health and wellness direct-to-consumer brand that produces trendy vitamin packs. It recommends tailored vitamins and supplements for you, based on an online assessment.

@Careof

Trend 5: the future is digital

It’s pretty clear that the shift to digital channels is here to stay. A majority of consumer categories will continue to project more growth in e-commerce than in other channels over the next several years.

Potential strategy for wellness brands: Create seamless omnichannel and digital offerings to ensure that you meet your consumers where they are. (Omnichannel is, in fact, a multi-channel approach. It gives your customers a seamless shopping experience, regardless of whether they’re shopping from a laptop, mobile device, by phone, or in a store.) Consider developing a supply chain for e-commerce.

Brand example: Four Sigmatic is a wellness company that’s well known for its delicious mushroom coffee. To get the word out, the brand has been sponsoring podcast shows including Joe Rogan’s Podcast, which was downloaded nearly 200 million times per month and made $30m in 2019.

Trend 6: the rise of services

Services have been a growing part of the wellness market: experiences are increasingly available as offerings. Consumers are shifting towards services that address physical and mental health needs (personal trainers, nutritionists, and counselling services). Yet products still remain a consistent and critical part of the segment at roughly 70% of self-reported consumer wellness spending globally.

Potential strategy for wellness brands: Consumer health care companies could consider diagnostic or coaching offerings that support a direct connection to the consumer. Fitness companies should consider offerings such as connected communities and services beyond the gym equipment.

Brand example: 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.

Trend 7: brick and mortar stores

As online shopping evolved with the pandemic, so did physical stores. They are now inseparable. As we emerge from the coronavirus pandemic, bricks-and-mortar retail will remain open for business. But the central role of e-commerce means that brands have to rethink the very concept of the physical store. For many, this has meant developing hybrid experiences that merge the best of online and offline elements. Think concept stores.

Given the experience deprivation of lockdown, physical retail won’t be killed off by the massive growth of e-commerce, but it’s going through an important transition.

Potential strategy for wellness brands: Look into how you can replicate features prevalent in e-commerce for in-person shopping. Gamification, higher levels of personalisation and other perks all have the ability to keep consumers entertained.

Brand example: In Tokyo’s Harajuku district, Shiseido’s new concept store, which opened in June 2021, features a public studio in its entrance area to record live streaming and other video content, all projected onto a large screen. Shoppers can also project their personal 3D avatars in a virtual space in the store, in their favourite makeup and fashion, and snap pictures of their avatars with friends and brand ambassadors (Wunderman Thompson, 2021).

Karmen is a strategy executive, focused on the management and growth of modern brands and the founder of another startup story. With her creative flair and business acumen, Karmen creates meaningful digital solutions for brands with purpose and authenticity. Follow @anotherstartupstory