How The $4.2T Wellness Economy Is Bringing Luxury To The Mass Market

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The $4.2T wellness economy has traditionally targeted luxury markets, with brands such as Goop and Poosh building lifestyles around high end skincare goods, supplements, diets, and exercise products. This aspirational market has grown so large, however, that mass market brands including United Airlines, Walmart, and Wegmans are beginning to bet on beauty, health, and wellness products — while on the flip side, luxury brands including Lululemon and Away are expanding their brands to tap into larger shares of the overall wellness market. The combination of these two forces has resulted in a fresh explosion of the wellness economy, this time at the mass market level.

NewtonX recently concluded a wellness market survey deployed to executives at 500 retail companies that are incorporating BHW (Beauty Health and Wellness) products into their brands. The survey was deployed with the intent of understanding the wellness economy, its potential, its growth, and how brands are leveraging the market’s growth for their own gain. The data and insights in this article are informed by this survey.

Beauty and Wellness Isn’t Just Good for Bodies; It’s Also Good For Bottom Lines

The wellness economy is unique in that there are almost unlimited distribution channels: from gyms, to airlines, to hotels, to e-commerce, to grocery stores. The health and wellness market is so wide and encompasses so many facets of wellbeing that it has ample room for expansion and partnerships— especially considering seemingly insatiable interest from consumers. For instance, United Airlines recently announced a multi-year partnership with cult luxury beauty brand, Sunday Riley — a pairing that may have seemed unlikely just five years ago.

Indeed, the travel industry has embraced the wellness economy with gusto over the past few years. Away Travel, for instance, the luxury suitcase retailer, recently launched a campaign in partnership with Moon Juice and Outdoor Voices for customers to receive custom suitcases filled with travel wellness products.

Travel and wellness have also collided in another major vertical of the wellness market: wellness tourism, a $640B market with an average annual growth rate of over 6%. In fact, world travelers made over 850M wellness-related trips in 2018 (these include trips to spa destinations as well as trips for major medical procedures that are safer, cheaper or offer some other benefit in foreign locations). Globally, wellness tourism accounts for 17% of all tourism expenditures, and is even higher in developing markets such as Latin America-Caribbean and Asia-Pacific.

The largest vertical of the wellness economy remains personal care and beauty, though, which accounts for over $1T. This aspect of the wellness economy has huge margins and is growing rapidly as populations become more interested in health, beauty, and anti-aging. Because of the vertical’s potential, major retailers are investing in bringing luxury wellness products to the mainstream. For instance, Walmart recently announced that it will be launching Bobbi Brown’s wellness line with products retailing for between $10 and $20.

The Lifestyle Market: How Social Media Promises to Fuel the High Margin Wellness Industry

Anti aging products, aspirational travel, and wellness supplements were once exclusively under the purvey of the elite. With social media, the proliferation of digital wellness outlets, and influencer marketing, though, wellness trends have become more and more mainstream. Millennials also tend to have less brand loyalty than their predecessors, which has contributed to an extremely large and fragmented market with steep competition.

These factors have all contributed to the explosion of wellness economy partnerships we’re seeing now. Brands and retailers are increasingly pursuing alternative distribution channels such as airlines, juice/wellness shops, and gyms as a way of reaching lifestyle- conscious consumers. Meanwhile, mass market wellness brands have seen massive upticks in consumer interest over the past few years (La Croix, for instance, which was once just a cheap flavored water brand is now a lifestyle statement).

Over the next five years, the market will crystalize into clear industry leaders, but there will still be room for boutique, ‘up and coming’ brands that leverage savvy influencer marketing and smart brand partnerships. Consumer interest in the wellness economy shows no signs of slowing, particularly in developing markets — which will contribute to even more growth in mass market wellness products.

 

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Germain Chastel is the CEO and Founder of NewtonX.

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