A unique opportunity for the health and wellness industry
US consumers are leading the way as the global health and wellness industry has an opportunity to continue its significant growth streak.
Forecasts show healthy industry growth
The “wellness economy” was valued at more than USD4 trillion in 2018 – roughly the combined GDP of Canada and the UK. It’s massive! This follows an annual growth of 6.4% over the three years leading up to it, and is a trend that’s expected to continue, despite the current global business slowdown.
When we talk about the health and wellness industry, we’re not merely referring to the latest diets, health supplements or exercise programs that people sign up to in January, stop following by April and replace with an upgraded version after Christmas. Wellness is described by the Global Wellness Institute (GWI) as “the active pursuit of activities, choices and lifestyle that lead to a state of holistic health.”
This industry accounts for more than 5% of global economic output largely because of consumer health awareness and the “active pursuit” of self-care. Reasons include ageing populations requiring treatment of chronic conditions, higher levels of anxiety due to modern lifestyles, and the availability of health information online enabling people to practice self-care where professional medical help is not required.
All this while healthcare becomes increasingly expensive, people favor natural remedies more often, and the availability of health care workers are in decline. It appears people find that spending money in this way saves them on medical costs in the long run. Prevention is perhaps not only better, but also cheaper, than cure.
Apart from personal care and beauty treatments (nutrition, weight management, fitness, etc.) the health and wellness industry includes operations related to services based on wellness real estate, wellness tourism, health spas.
US health and wellness industry leading globally
Two GWI senior researchers, Katherine Johnston and Ophelia Yeung, commenting on the 2016 global wellness economy monitor, argued that, “The growth trajectory of the (US) wellness industry appears unstoppable.” The statistics released since confirm their prediction. The US health and wellness market generates roughly 36% of the global industry’s economic output, leaving Germany (11%) behind at a distant second.
The main reasons for the US industry’s dominance include the size of the market, its consumer-driven culture, its technological strength and consequent ability to innovate, and its massive spending on workplace wellness by employers.
Policy Advice recently compiled some of the following 2020 industry statistics related to US consumer behavior in the health and wellness industry, including some predictions leading up to 2020:
- 56% of consumers believe their health is excellent or very good
- 49% own a wearable fitness device
- 12% own some sort of smart clothing (including items that improve airflow, improve sleep, and aid healing from injuries)
- wellness tourism represents 17% of worldwide tourism expenditure
- wellness tourism is typically undertaken to the Caribbean, Asia-Pacific, Middle East, and North Africa regions
- 28% of US-based gym members use spa facilities on a regular basis
- 79% of employers offer a workplace wellness program to employees
- 77% would work out more regularly if their employer offered gym facilities
- 78% of Americans have changed their diet after consulting a healthcare professional
- 37% of American citizens have a BMI score that is normal or low
- 80% believe available nutritional information is conflicting and therefore unhelpful
Pandemic offers a unique opportunity for health and wellness industry
As is the case with every other industry, spending tied to human-to-human interactions or larger gatherings have decreased during the Covid-19 pandemic. Gyms have been closed, health spas have had to rethink their service protocols, and people have become more reluctant to visit doctors or other medical practitioners for non-essential health issues.
This has meant a rise in online selling, and the introduction of innovative virtual consultations like Doctor on Demand (medical) or Peloton (fitness). While some sectors or channels have been struggling because of regulations, the industry as a whole has been doing well.
There’s also a consumer-driven element involved in the industry’s ongoing success. Apart from innovative ways businesses found to sell products and deliver services, the pandemic highlighted the importance of “taking care and control of your own health,” says WSL Strategic Retail’s Wendy Liebmann, explaining shifts in buying behavior.
Supply chain analytics experts, Quantzig, report that this change in consumer behavior is significant enough to see several leading healthcare brands and pharma manufacturers investing in the health and wellness products segment. This is in response to the growing needs of urban populations who have turned their focus to health and well-being during this pandemic.
While challenges related to realigning the supply chains and optimizing manufacturing processes are central to industry restructuring, the pressure to meet the demand surge with limited resources remains a welcome challenge faced by the health and wellness sector. “Though health and wellness brands are witnessing huge demand surges due to the crisis, they must latch on to the power of human connection and support the global population at challenging times like these,” reports Quantzig.
The opportunity, therefore, lies in finding ways to optimize supply channels – which may involve unlocking new channels or becoming more effective in existing channels – and to integrate person to person connection into the sales process where possible.
Topics: Build a better business
About the Author, Servaas Hofmeyr
Inbound Marketer and Analyst at Skynamo