In Phase III work on studying the Consumer Shop ping Habits for Wellness and Environmentally Conscious Life styles, the Global Market Develop- ment Center (GMDC), in part- nership with The Hartman Group, identify trends and opportunities facing retailers within the general merchandise and health, beauty and wellness (HBW) space.
By Keith Wypyszynski
As we near the end of our third year taking the pulse of health and wellness shoppers, there are clear signs that consumers are continuing in their quest to achieve greater health and wellness, making this market a fast growing and exciting place in which to operate.
While the number of opportunities abound, one that rises to the top is new product innovation. This has been, and will continue to be, a key driver fueling growth in health and wellness, giving consumers unprecedented access to new and compelling products and services to meet their goals.
Our research over the past 10 years clearly supports that H+W is neither a fad nor a niche market that will fade away with changing consumer tastes. Rather, we believe it should be viewed as a foundational change in how consumers want to live.
The recession appears to have had lesser visible effects this year on consumer spending and shoppers seem to be gaining additional confidence as the economy improves. For instance, they appear to be more willing to pay a price premium for beauty care products with attributes they seek such as quality, lack of irritants and safety. They are somewhat less willing to pay a premium for products espousing environmental or social claims, such as recyclable packaging or animal testing. Looking forward we anticipate increasing consumer involvement and scrutiny of product-level attributes such as natural ingredients, non-toxicity and others.
Functional food & beverage
New opportunities are emerging this year to grow health and wellness, such as better targeting the Inner Mid-level and Outer Mid-level consumer (the majority of mainstream shoppers) and examining how to better reach nutrition bar and functional food consumers. We describe functional foods to consumers as foods such as cereal with added fiber, eggs with omega-3 fatty acids, etc. For consumers of both functional foods and nutrition bars, we find these shoppers are most likely to collect and use coupons (18%). Functional food consumers are also likely to wait for sales and deals.
Approximately six out of ten consumers (57%) purchased nutrition bars, and 26% of consumers made natural, organic or specialty version choices in this category. Not surprisingly, only one in 10 consumers were concerned about price. In the functional food category 77% of consumers made purchases while 32% purchased natural, organic or specialty versions. For those feeling the economic pinch, 21% noted concerns about price.
Purity/healthiness is the most important product attribute in both categories while the top barrier cited was lack of selection or a lack of knowledge about the product. In 2011, 40% of consumers polled did not made any changes to the way they shop in either category.
There is no shortage of dietary supplements across the H+W continuum, but navigating the myriad of choices can be daunting for many. In particular, supplements are often a confusing category to negotiate for entry-level H+W consumers. In many cases, a basic understanding of what certain types of supplements are used for is not present. Furthermore, there is often little information provided on which to base quality distinctions, as consumers tend to have a hard time discerning between the multitude of brands and product levels at shelf. Another inhibitor frequently noted by consumers is the somewhat counter-intuitive brand-blocked shelf arrangements, which consumers find hard to navigate.
Hair and skin care
When comparing all three years of the study there is a distinct trend in every personal care product category we ask consumers about—that being the most important purchase factor cited is always effectiveness. In other words, consumers want their products to do their job. After that, lack of irritants, purity, ease of use and availability are the next most important purchase factors noted each year.
Among natural or organic body care product shoppers; about eight out of 10 (79%) have been using these products for more than one year. This is a gradual increase from 75% in 2009 and a possible indication that there are fewer new consumers entering the category each year. The top reason cited for starting to purchase these natural or organic products continues to be a belief that it would be a healthier choice (41%). Avoiding chemicals and getting a safer product is also cited by about a third of consumers. Other top reasons include trying a sample (27%), belief that it would be better for the environment (24%) and a lack of animal testing (23%).
Children’s hygiene and toiletries
This category is directly related to H+W, as having a child often serves as a strong trigger and motivator toward H+W evolution. There are deep moral undertones in this category as well, as parents seek to provide the best for their children. In many cases, we see purchasing in this category as disproportionately skewed toward the Core of the H+W world, as parents seek to provide goods for their children that are healthier than the goods they use themselves.
Consumers look for non-irritating and/or hypoallergenic products when it comes to baby personal care products and diapers, where non-binding/chafing is also a priority. Other key purchasing criteria consists of effectiveness perception (especially for diapers) and price for Periphery consumers, lack of negative ingredients for the Mid-level, and absence of negative ingredients, animal testing, and perception of environmental impact for Core health and wellness consumers.
Consumers are clearly being proactive about their H+W in order to achieve better quality of life. Research indicates that there has been a foundational change in how consumers want to live, and today’s health and wellness consumer is now considered more mainstream. Levels of intensity and passion about H+W may differ for the health and wellness consumer, but the common elements of their lifestyles are identifiable. Understanding the trajectory of where these lifestyles will take them is imperative for recognizing future business opportunities.
Keith Wypyszynski is vice president of business development and chief member officer for the Global Market Development Center, based in Colorado Springs, Colo.