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8 Jan

Why Wellness is Expanding its Presence on the Aisles

With recessionary woes looming, retailers need to wellness to offer healthy returns within the 12 months ahead.

Consumer interest within the category exploded throughout the pandemic as many individuals launched into self care routines while stuck at home. In line with The Global Wellness Institute, the worldwide market is predicted to succeed in $7 trillion by 2025. The trend appears here to remain, despite large swathes of the workforce being called back to the office, in addition to an uncertain economic backdrop and soaring inflation.

An Accenture consumer survey released in September 2022, which polled greater than 11,000 people across 16 countries, found that despite respondents feeling increasingly financially squeezed, consumers considered health and fitness to be an “essential,” alongside groceries and household cleansing products.

Around 80 percent intend to keep up and even increase spending on areas related to health and fitness this 12 months, including vitamins and supplements, a serious category in retail. Respondents are also taking a more holistic view of wellness, where it’s being reframed as more of a consumer staple. Around 42 percent said they’re increasing their amount of physical activity, while 33 percent also said they’re putting more focus into self care, “indulging in a shower or beauty treatment,” than they were a 12 months ago.

This chimed with a separate McKinsey & Company survey released in the identical month, which found that fifty percent of U.S. consumers considered wellness a top priority of their day-to-day lives, up from 42 percent in 2020. It estimated the present spend on wellness services and products to be greater than $450 billion within the U.S. and growing at greater than 5 percent annually, with Millennials leading the way in which in wellness purchasing.

“It’s something that continues to grow,” said Olivia Tong, an analyst at Raymond James, of the category. “It really kicked up throughout the pandemic — doing masks at home and other things that perhaps you couldn’t do whenever you needed to go to the office each day. That is an area where, to date, there’s plenty of white space opportunity.”

Those statistics haven’t gone unnoticed by retailers. In May 2021, Ulta Beauty unveiled its in-store wellness shop in 400 stores nationwide, in addition to online — an area where consumers could shop all things wellness, from gummy vitamins to skincare to menopause supplements to sex devices (online only) and rather more.

Ulta’s Wellness Shop

It proved to be so popular that the concept has now been rolled out to 800 stores, with chief executive officer David Kimbell telling analysts on Ulta’s most up-to-date earnings call that “while wellness represents a small a part of our overall business today, we consider it’s a big longer-term growth opportunity, given…the strong emotional connection consumers have with self care.”

Ulta Beauty has been agile in its response to this demand, dividing wellness into six subcategories: On a regular basis Care (think every day habits including teeth cleansing); Supplements & Ingestibles (vitamins and minerals); Loosen up & Renew (incorporating the whole lot from sleep routines to Homebody’s range of superfoods and adaptogens-filled bath soak products); Down There Care (covering the female health category, from menstruation to menopause); Spa at Home (personal pampering favorites, like at-home facials and mani-pedis), and the recently added online-only Intimate Wellness (think liquids and devices).

“We’re really pleased with the assortment,” said Monica Arnaudo, chief merchandising officer at Ulta. “We launched this a 12 months and a half ago so we’ll proceed to lean in and learn and hearken to our guests. Insights really help us drive our assortment so definitely more to return.”

It’s not only Ulta that’s eyeing this growing opportunity to boost profits even further. From malls to drugstores, retailers are betting big on the category.

“We predict it’s a logical adjacency to the strength that we have already got in our pharmacy in our over-the-counter medicine business,” said Luke Rauch, senior vice chairman and chief merchandising officer at Walgreens, adding that wellness products will be found throughout stores. “The chance for us is countless here.

“Should you take into consideration, at a macro level, the role that we play in each treatment and prevention, we’re the market leader of treatment,” he continued. “Once you get sick, and you wish cough medicine, you come to Walgreens. We predict we will play that very same market-leading role on the prevention side through wellness.”

By way of categories, Walgreens is specializing in clean ingredients, from ingestibles to skincare products. For the latter, Heather Hughes, general manager of beauty and private care on the retailer, believes that while skincare was viewed as being a part of wellness by some prior to the pandemic, the rise of self care routines during lockdowns really cemented its place on the cross section of wellness.

“It was happening prior to COVID-19, but as folks had more time on their hands to research and really took on the onus of their very own health, they built self care routines and in order that’s where skincare lies,” she said. “Inside that, we discover clean beauty to be an enormous trend — knowing the ingredients that you simply’re putting in your body is just as necessary as knowing the ingredients that you simply placed on your body.”

Wellness also continues to be a “big priority” at Sephora, in keeping with Cindy Deily, senior vice chairman of merchandising and skincare. Its primary focus is on supplements, wellness tech, feminine care and sexual wellness, but a few of its core beauty categories, equivalent to skincare, bath & body and even fragrance, play a big role within the wellness space, too.

Topicals, for instance, the skincare brand founded by Olamide Olowe in 2020 that sought to reinvent the ointment category, is among the many retailer’s fastest-growing beauty brands.

At the identical time, Sephora is approaching the category with a broader lens and can proceed to explore wellness offerings that will fall outside of those categories, like pregnancy, pre- and post-partum and menopause support, Deily said.

“There are such a lot of unmet needs with regards to wellness, and we sit up for continued growth and expansion as we try to fulfill the evolving needs of our clients,” she said.

Deily can also be services as a primary avenue of growth within the wellness arena. Sephora offers HydraFacial treatments in stores, for instance, and plans to include other wellness offerings into its services in the long run. 

As an alternative of a dedicated area, wellness offerings are integrated into Sephora’s overall beauty assortment in merchandising areas equivalent to Beauty on the Fly and The Next Big Thing wall, although several wellness brands, equivalent to Moon Juice and Hum Nutrition, even have their very own branded spaces.

“As the general category continues to grow and evolve, we’ll proceed to take a look at other ways that we would optimize the client experience in stores on a longer-term basis,” Deily said. “We’re all the time in search of brands that can help us deliver on our clients’ evolving beauty needs, as we aim to bring them products and types they might not otherwise have discovered on their very own.

“In the case of wellness,” she continued, “it’s extra necessary that brands are poised to assist educate clients on their products (i.e., what’s in them, how one can best use them, etc.), which is particularly critical as shoppers navigate this newer space inside beauty.”

Other prestige malls have followed suit. For instance, Bloomingdale’s has a web-based wellness shop where consumers can shop an array of things, equivalent to a Therabody massager, a Smile Makers sex device and Hum Nutrition supplements, and Nordstrom has leaned heavily into the category as well. 

As for products for retailers to select from, there’s definitely no shortage. But with regards to bringing wellness into retail, education and merchandising is vital. 

“We’re going to have plenty of consumers who’re beginning to say, ‘Wait a minute, what am I buying here? Why am I buying it? What’s different?’ The chance is there, nevertheless it’s going to require, as we get into 2023 and 2024, a rethinking of what’s it that retailers, specifically, are going to must do to assist curate, educate, inform and help shoppers buy the best product,said Wendy Liebmann, CEO of WSL Strategic Retail.

She likened the wellness boom to the rise of clinical skincare a decade or so ago. “It almost goes back to the times when, within the U.S., people didn’t really use much in the way in which of skincare. So that they used Olay or Ponds or something, and once the brand new options began to roll in it really required a special level of education.”

Tong agreed: “What’s essential for each the retailer and the large manufacturers is to proceed to ensure that that they educate consumers in order that they’re just not buying regardless of the last influencer said.”

Each in-store and online, supplements have been a key driver for the general wellness category, with vitamins and minerals amassing greater than $12 billion within the U.S. over a one-year period.

The category’s recent boom is being driven by unique formats like gummies, chocolates and powders from brands like Olly, Liquid IV, Hum Nutrition, Source, Smartypants and Moon Juice. 

“Categories, like vitamins and mineral supplements, are really expanding into numerous other forms, whether it’s Liquid IV sort of things, drips, infused waters, bars or powders,” Liebmann said.

Gummies, specifically, have been an increasingly popular option, experiencing a 74.9 percent growth in keeping with Nutrition Business Journal’s 2022 Delivery Format Report. With the complement market becoming seemingly oversaturated, brands innovating in the way in which of formats have a bonus and Liebmann predicts will lead the category in 2023.

Olly products.

Complement brand Olly, heavily focused on gummy formats, is on the market at major retailers like Goal, CVS, Walgreens, Safeway, The Vitamin Shoppe and Whole Foods, and has been a pioneer in providing condition-based products, moderately than those based on ingredients.

“Ensuring that we’re present and growing and bringing the best products and the best experience to retail stores has been an enormous cornerstone of how Olly has grown,” said vice chairman of sales strategy Katie Schultz. The brand has created a successful on-shelf experience with its vibrant packaging and clear, benefit-focused product names, like Sleep and Heavenly Hair, making it easy for consumers to grasp, grab and go. 

Hum Nutrition at Sephora.

Hum Nutrition, founded in 2012, has taken a more prestige approach with its ongoing Sephora partnership, where it has been the number-one wellness brand because it launched in retail in 2015, in keeping with CEO and cofounder Walter Faulstroh. The brand is on the market in about 500 doors.

“For us, it was an issue of working with someone who prioritizes education, and Sephora has really baked into their DNA this educational piece. It’s all the time about empowering the buyer with necessary nuggets on how one can achieve success with products,” Faulstroh said. “Working with partners like Sephora, you possibly can construct out programs around sustainability or clean ingredients that give the buyer further validation about what the brand is all about.…It’s validated by a third-party retailer, who has been within the business of prestige beauty for a really very long time.” 

On what level of education or expertise is required in categories like supplements, Walgreens’ Rauch noted that while pharmacists have historically played a very important role in education, the retailer can also be implementing QR codes for some items that take shoppers to a web-based quiz to search out one of the best product.

“There’s an enormous opportunity for us to proceed to leverage each a physical footprint to beauty advisers and pharmacists, particularly because it pertains to categories like supplements and ingestibles. But additionally to create recent digital tools that we will leverage to make it even easier for consumers,” he said.

For Sephora, Deily said much like skincare, it’s necessary to know what the energetic ingredients are and in addition how the body will react. Apart from Hum Nutrition, Sephora also sells supplements from Moon Juice, Ouai, Vegamour, 8Greens and The Nue Co.

“We’re working closely with our supplements/ingestibles brands to optimize storytelling in order that the client can shop for his or her supplements the identical way they’re looking for their skincare, with a give attention to encouraging transparency around hero ingredients and/or key advantages,” she said. “We even have specific Clean at Sephora criteria in place for supplements/ingestibles that we developed in partnership with numerous trusted experts within the space.”

Retailers like GNC and The Vitamin Shoppe provide worker training and online content for consumers to further educate themselves. Ulta’s in-store event program acts as one other technique of education for consumers to learn.

Alongside ingestibles, sexual health has change into a fast-growing category within the wellness space for a lot of retailers, though mostly online. Over a one-year period within the U.S., the sexual health category grossed nearly $2 billion in keeping with Nielsen, and globally, it is predicted to be a $112 billion market by 2030, in keeping with Market Research Future.

Brands like Goop, Maude, Foria, Dame and Smile Makers have been supported by retail partners. While Goop ranges outside of the sexual health category, the wellness-oriented brand is sold at Sephora, Credo, Thirteen Lune, Mecca and more, with business growth over 70 percent.

This January, Sephora launched Dame and Maude on its e-commerce platform, inaugurating the sexual wellness category for the retailer, which for now is barely available online.

Ulta also has launched intimate products online only. When asked about the opportunity of rolling this out in stores, Arnaudo said: “We’re talking about it. It’s definitely something that we predict is a chance and I believe it’s really going to be about educating our store associates and our teams properly. It’s a consideration.”

At Walgreens, Rauch noted that it has an prolonged assortment online across its entire portfolio. Brands like Trojan, PlusOne, Skyn, Durex, Lola and Hims & Hers will be found on the positioning. 

“Oftentimes we use online as a laboratory to check whether or not it belongs within the 9,000 locations that we’ve got to serve customers,” he said. 

Dame Products
Dame products.

Dame launched in 2015 and is sold at Sephora, Bloomingdale’s and Nordstrom. The willingness of mainstream retailers to enter terrain once considered taboo has accelerated acceptance, in keeping with Alexandra Effective, CEO and cofounder of Dame. “What they’re telling their customers is, ‘Hey this is very important. This can be a valid thing so that you can buy,’” she said. “It gives people access and validates their needs,” she continued, noting that Sephora has supported and educated on the brand through email and influencer marketing. 

The sexual wellness category has recently expanded with the emergence of recent menopause brands. The past several years, a litany of brands entered the category, including Cosmoss by Kate Moss, Stripes by Naomi Watts, Womaness, Wile, Kindra, Bonafide, Pause Well-Aging, Higher Not Younger and Thermaband to call just a few.

With 1 billion people expected to be in menopause by 2025, retailers are starting to construct out sections and end caps for these solution-based brands to coach the buyer and make the products more accessible.

Wile, which launched in 2022 and is backed by actress Judy Greer, made a singular proposition to retailers with its line of products, primarily geared toward women in perimenopause, the stage by which the body transitions into menopause. The market had been primarily focused on only the menopause stage. 

“From the start, we kept hearing this term future core, like this demographic of ladies is a future core customer since it’s true. All of the retailers we talked to understood there’s an enormous whitespace and gap,” said Gwen Floyd, cofounder and CEO of Wile. The brand launched in Walgreens and Whole Foods and was expected to succeed in $3 million in sales in 2022. 

Womaness, a wide-ranging product line to support those experiencing menopause, is one other fast-growing brand within the sector, sold at Ulta, GNC, Goal and Walmart. Cofounder and CEO Sally Mueller said launching Womaness in stores was a challenge as retailers hadn’t checked out menopause from a holistic approach.

“We have now supplements, skin and body products and sexual wellness. We’re the full solution from head to toe, so it’s a recent way of merchandising,” she said, noting plenty of customers have done research at home and are entering the shop to search out something specific.

“The role retailers really must do is make it easy for those customers then to search out the product,” Mueller said. “That’s why I like that we’re merchandised all together in a single location at Ulta in order that it’s just easy. It’s sort of a trigger for the opposite needs that she has.”

Ulta and Womaness host The Menopositivity Tour.

Apart from merchandising, Ulta has supported the brand through further education. Through its in-store events program, the retailer has raised heightened awareness for Womaness and the menopause category overall. In October, for instance, Ulta and Womaness hosted The Menoposotivity Tour, a mobile live masterclass held at three select stores. The event celebrated Menopause Awareness Month and highlighted menopause as a key wellness category. 

Experts expect the menopause category to proceed to grow, and see white space in other areas. McKinsey cites sleep and mindfulness as key categories that customers are looking for more of, noting that 47 to 55 percent of Black consumers say they need more in the way in which of wellness solutions. Nearly a 3rd of respondents are looking for more across all the category.

And as more brands and subcategories come to market, consumers are in search of modern products that address several wellness needs, in keeping with experts.

“We’re continuing to see people really attempting to be rather more proactive in lots of the categories and areas…the whole lot from immunity to sexual health and wellness to recent technologies,” Liebmann said. “This whole give attention to proactive wellness, nonetheless we define wellness, might be a extremely big area of focus for consumers.”

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