The US wellness industry is expanding rapidly.
US wellness industry | According to our study, consumer interest in health and wellness is still growing, and there are still unmet demands in some sectors, which presents businesses with intriguing potential. Our most recent survey, which included more than 2,000 US consumers and built on last year’s Future of Wellness article2, confirms the existence of several trends and demonstrates growing
Health, exercise, nutrition, appearance, sleep, and mindfulness are six areas of consumer interest in wellness.. Six significant new trends were also identified by the survey’s widened scope this year, and combined they indicate significant changes in consumer attitudes about wellness.
In recent years, the wellness business has experienced significant innovation and increased competition, notably in sectors like tailored nutrition, vitamins, and cosmetics.
However, many customers’ demands for wellness are not being fully met by the goods and services that are currently offered. This is particularly true of Black and millennial customers, who now make up the greatest generational pool of prospective spenders. The chance for businesses to better service these and other demographic groups is intriguing.
Customers are ready to identify practical answers. Businesses who are able to recognise unmet needs and address them through intelligent, distinctive, personalised services that increasingly focus on several aspects of wellbeing will prosper.
Consumers and investors are placing more importance on wellness, yet there are still unmet needs.
The wellness industry is rapidly expanding. Overall, the number of US consumers who rank wellness as a top priority in their daily lives has increased from 42 percent in 2020 to around 50 percent now. This growing consumer focus on wellness appears destined to continue against the backdrop of COVID-19’s transformation from a worldwide pandemic into an endemic illness.
It is helpful to review how customers think about wellness and how this has changed in order to better comprehend the complexities of this burgeoning business.US wellness industry The six wellbeing factors identified in our 2020 Future of Wellness research3 are still reliable indicators of how modern consumers perceive wellness (Exhibit 1). These six wellbeing aspects include the following categories of goods and services: Wellness: OTC medications, supplements, and personal hygiene
Fitness: gyms, studios, home exercise gear, and fitness wearables
Nutrition: juice fasts, meal delivery services, nutrition apps, and diet plans
Skincare, dermo-cosmetics, haircare, and salon services are all related to appearance.
Apps for mindfulness, counselling or therapy, and meditation centres
Sleep: sleep aids, sleep monitors with apps, and other sleep-improving goods The distinctions between wellness measures may be blurring, according to our most recent research. More and more consumers appreciate and look for goods and services that may meet their demands across several wellness aspects (such as mindfulness and fitness or nutrition and appearance). For instance, Alo, a company that makes yoga gear, has developed its Alo Moves mobile app to provide yoga, fitness, and meditation lessons. By providing a variety of vitamins and supplements intended to enhance mood, skin, hair, and other physical features, Hum Nutrition similarly blurs the lines between nutrition, health, and beauty.
The industry has gotten more competitive due to rising consumer demand for wellbeing-related goods and services, and during the past several years, early-stage investments in the health and wellness sector have multiplied.For instance, according to some estimates, in 2021 there were about 730 deals totaling about $29 billion invested in digital health startups, up from about 480 deals totaling about $15 billion the year before.
However, customers continue to believe that the goods and services on offer fall short of their expectations. Nearly a third of consumers who were polled said they would want more options for the other four health dimensions and in the sleep and mindfulness markets, where around 37% of respondents showed a desire for more goods and services (Exhibit 2). This is especially true for Gen Z and millennials, who have higher average rates of demand for wellness-related goods and services by six to seven percentage points.
Many current trends are persisting and perhaps gaining momentum.
There are still several important consumer trends that we first identified in our earlier study, and some of them have even become more pronounced during the last two years:
Personalization of goods and services is becoming more and more significant. This phenomena is especially prevalent among Gen Z and millennials, of whom 49 percent and 37 percent, respectively, reported a strong preference for goods, services, or applications that use personal data to tailor the shopping experience for each individual (Exhibit 3). Companies have had success using a variety of strategies across all wellness parameters. As an illustration, Care/of, a customised vitamin company, employs a type of straightforward quiz-based personalization that suggests one of many product possibilities based on how customers reply to questions about themselves.
ZOE, a firm that specialises in customised nutrition, employs more advanced customisation to provide specialised goods and services depending on each customer’s particular health markers (such as microbiomes or blood lipids). Additionally, ZOE provides continuous glucose monitoring to provide quick, individualised feedback on how various diets alter blood glucose levels. Influencers and celebrities are becoming increasingly significant for millennials in particular when it comes to product discovery.
The percentage of consumers who said influencers or celebrities were crucial to brand discovery increased by nearly 20% over the previous two years, reaching about 60%. (Exhibit 4). Over this time, the prominence of celebrities grew far faster than that of influencers. Most likely because of The majority of money is still spent on products, but services and applications are gaining footing and currently account for around 30% of money spent. Around 45 percent of consumers want to spend more on services or app-based services over the next year, compared to around 25 percent who plan to spend more on items.
Services and apps also appear to be poised to take a considerably bigger percentage of future spending.
Since the last two years, nearly all wellness-related goods and services have seen an increase in the reported percentage of spending coming via e-commerce channels.