WWD | By Ellen Thomas on August 31, 2020
Wellness represents a significant opportunity for mass-market retailers, but they’ve only just begun to democratize a concept long associated with luxury.
Five years ago, when Thrive Market, a membership-based e-commerce retailer that sells natural and organic food and wellness products, launched its web site, people who joined were considered “wellness champions”—the health junkie looking to buy the latest superfood smoothie booster or Himalayan pink sea salt in bulk.
But in March, as consumers began to grasp the severity of the novel coronavirus, something shifted.
“If you’d asked me six months ago who our core customer is, it’d be a different answer—it’d be that wellness champion who evangelizes wellness, really spreads the gospel,” said Jeremiah McElwee, chief merchandising officer at Thrive Market. “With the pandemic, we’ve seen this broadening of our customer base—our CEO likes to say everyone is a wellness champion now, everyone is focused on staying healthy and being well.”
A similar thing happened at Grove Collaborative, an online retailer specializing in natural and organic home and cleaning products. Grove also owns five wellness brands, including online clean beauty platform Roven and Sustain Natural, which makes organic feminine care and sexual health products.
“The whole business has been up a lot [during the pandemic],” said Stuart Landesberg, Grove’s founder and CEO. “People have more time to focus on their home routine, and when people are focused they make better choices.”
While retailers like Grove and Thrive account only for a small part of market share compared to big-box chains—Thrive has a subscriber base of about 900,000 while Walmart saw some 265 million customers in-store per week in pre-pandemic 2020—they no longer serve only a niche demographic. They’ve managed to make wellness accessible to a broad swath of U.S. consumers, a concept that mass market retailers are still grappling with.
For mass-market retailers, wellness represents “the biggest consumer spending opportunity since the iPhone,” said Wendy Liebmann, Chief shopper at WSL Strategic Retail.
“One of the things COVID-19 has done is it has enabled a lot of the retailers to see the breadth of the wellness opportunity, she noted. “This is an opportunity they’ve sort of known about and talked about but haven’t been aggressive about. There’s an urgency around understanding the business opportunity now—most were picking a bit here and there, but nobody was stepping back and establishing an overarching strategy and message.”
The consumer appetite for a healthier lifestyle has never been bigger. Better-for-you products are what the average consumer wants.
“ The American shopper is saying, I have to think about wellness more holistically, taking care of me and my whole family’s health and well-being,” said Liebmann. “ They’re talking about immunity and health-care protection as a whole vision around ‘How can I make sure I stay healthy but also look healthy and well?’”
In the mass market, health-oriented products across every consumer goods category are seeing exponential growth. The vitamin and supplement market, which grew 4 percent in 2019, has already grown 14 percent this year, according to IRI, which tracks the mass, drug and grocery channel.
What was in March thought to be a momentary sales spike fueled by coronavirus anxiety and panic shopping is now sustaining momentum month after month, with product categories relating to stress and immunity seeing consistent triple-digit growth. ”It’s unprecedented. What started as a small category just exploded,” said Joan Driggs, an analyst at IRI.
“People continue to be very personally vested in doing what they can to support their own health and wellness,” said Driggs. “Aside from supplements you can look to sales of fresh foods—meat alternatives, sales of seafood are through the roof. Sales of bicycles, home gym equipment. Everyone is working through stressors they never imagined they’d have.”
Beauty certainly fits into that wellness halo, though you won’t see that reflected in IRI data. Sales of key categories like makeup and hair—with the exception of home color, which is experiencing a real moment of relevance—have been in consistent decline since the onset of the pandemic.
Makeup doesn’t feel relevant as many consumers work from home and don face masks when out in public, said Stephanie Wissink, managing director at Jeffries. Instead, consumers are focusing on “skin health,” like skin-care-makeup hybrid products, skin-care tools and devices and topical products with clean ingredients. “There’s a real movement towards treating skin as an organ, like the heart is an organ—you have tone and condition it,” said Wissink. “Makeup is starting to feel like a signature of the old world.”
While chains like Target, Walmart and Costco in recent years have recognized the consumer move toward wellness by bringing on scores of new wellness-oriented food, personal-care and beauty brands, merchandising is really only the first step, Liebmann added.
Retailers need to act more like Thrive and Grove, weaving wellness into every aspect of the shopping experience, or “a well store,” as Liebmann called it.
“It has to be internal and external, starting with a strategy that begins with how the customer sees wellness. It’s in everything from products and services to sustainability to caring for [employees] to the spaces we design,” said Liebmann. “Look at every aspect—the way stores are developed going forward, what services to add or get rid of, what stories to tell with ingredients—what sort do we sell and not sell? What’s the messaging on caring for our own people and environment? There needs to be a cohesive team of people, from merchants to HR to technology, envisioning what that ‘well store’ could look like.’”
Beauty is an important piece of the ‘well store’, said Liebmann. You won’t see this reflected in any IRI data—in the mass market, beauty sales are in a consistent state of decline. But at Grove, beauty is the fastest-growing category, outpacing growth of the total business. The e-tailer stocks only clean beauty products, mainly skin care with a sustainable bent and a small assortment of clean makeup brands.
Linking beauty with wellness is seen by experts as the best way to revive what has been in mass a lackluster category.
What hasn’t worked for mass retailers, she added, is premiumization—a wellness strategy she’s seen mass retailers take specifically in the beauty department, placing the same products sold in specialty retail down the aisle from the standard drugstore staples.
“The danger is that if we think of wellness as only about taking the price up and having very specialized products, it’s not going to work—beauty has a lot of opportunity in wellness but the most recent approaches have felt very specialty and very esoteric—the retailers really haven’t validated why you should be buying something at this price point.”
Wellness has long been associated with wealthy white women. There is certainly no shortage of brands that sell high-end products to a green juice-sipping luxury consumer, but some of the newest on the market are taking a much more inclusive approach.
“At some point wellness became the new luxury must-have and health became associated with wealth,” said Kristi Bergeron, vice president of brand and marketing at HatchBeauty. “There is definitely [broader] consumer demand and what’s interesting about wellness is not that mass has been left out, it’s just that they’ve been given a lot fewer options.”
One of HatchBeauty’s key projects in 2020 is NatureWell, an accessible wellness lifestyle brand it has teamed up on with singer-songwriter Jewel. The concept is to offer a holistic approach to beauty at a friendly price point, from teas to supplements to topical skin care.
The brand will offer product “regimens” for consumers looking to build a comprehensive routine out of NatureWell products.
“There’s not a lot of brands [in mass] doing curation and giving that right to lifestyle play,” said Bergeron. “With [something like] Goop, you get a lot of education and information. They give you a roadmap, like ‘here’s what you take in the morning and here’s what you take at night’ and it becomes more ritualistic.”
“Mass wellness right now is still curated in a product discovery way,” she said. “We’re excited to create that regimen on a brand level, that gives you two or three options for a solve that will fit into your day. It’s straightforward and simple versus just taking the route where you put out a product and have an influencer tell [the customer] how to use it.”
Mass consumers are much more likely to discover new wellness products online than in a store environment right now, added Preston Bottomy, president of HatchBeauty, making content and education especially important. “The brand is often the first point of discovery to really educate the consumer, to provide rich content and really engage and discover before authenticating with their retail partners.”
Another thing that HatchBeauty is thinking about as it brings new brands to market is the increasingly blurred lines between wellness and beauty.
“We really see beauty increasingly as a holistic solution,” said Bottomy. “For us, it’s less about ‘Oh, this brand lives in wellness,’ but ‘how do we bring wellness into the way we see beauty hitting the market?’”
WELLNESS FOR THE PEOPLE
As consumers increasingly turn to wellness in the age of coronavirus anxiety, a new wave of brands is making the market more accessible to the average person than ever before. From mass distribution in drugstores to lower price points to free online content and podcasts, here are five wellness brands that go beyond Goop.
Healist Advanced Naturals Sleep Drops, $69.99
Part of a new brand incubator spearheaded by former Coty ceo Camillo Pane, Healist is a direct-to-consumer brand aiming to provide clear education around the benefits of CBD. According to brand execs, it sells the most sleep drops between the hours of of 1 a.m. and 6 a.m.
Goli Apple Cider Vinegar Gummies, $19
This product, launched barely two years ago and now sold in 100,000 mass retail doors, takes a popular yet unpalatable wellness trend—a shot of apple cider vinegar in the morning—and turned it into a more appealing proposition.
Highline Wellness CBD Anytime Gummies, $35
Launched last year, this brand aims to cut out the middleman, making high-quality CBD more affordable.
Sakara Life Metabolism Powder, $90
Sakara Life launched as a vegan meal delivery service used by celebrities, but this year it has significantly expanded its content, including a podcast, extending its reach beyond the New York-Los Angeles bubble.
Public Goods B-12 Vitamin, $7
The brand’s membership model allows for its healthy and sustainable food, beauty and personal-care products to be sold at just above factory cost.