From indigestion remedies and hay fever tablets to FemTech and collagen supplements to wearable technology and mobile apps to chatbots that can give an almost instant diagnosis to health kits delivered to the doorstep -- the fast-evolving health and wellness market now encompasses products ranging from the very traditional to those at the very frontline of innovation.
It is a sector that is both mature and commoditised featuring well-known brands from huge pharmaceutical companies, yet simultaneously new entrants are agile start-ups and forward-thinking tech companies. This dichotomy is clearly highlighted by the second Brands In Motion report, published by WE Communications, as it shows a contrasting picture of consumer sentiment across the eight markets surveyed.
Across a half of the markets, in Australia, China, Singapore and India, the sector is on the defensive. Consumers are driven by their rational need for health and wellness products, such as those traditional remedies and cures. They need these products but there is little love for them or the brands, across these markets.
The Brits ‘love’ for the health sector
In the UK, one of the report’s sceptical markets, it is unexpectedly a completely different story. Here love for the sector reaches 49% compared to 51% for market across the whole report. It is a moving category where the emotional and the rational driver are balanced out. Consider this - the same people when asked, What is your overall impression of Health & Wellness companies? 56% of Brits said “It’s Amazing”.
Health and wellness in the UK is as commoditised as any of the other markets, perhaps more so, but it is the younger generations making their impact felt here. Generations Y and Z are more health conscious than the older generations, they drink less, and make wiser lifestyle choices.
They are also far more comfortable with the tech innovations, such as wearable devices, smart watches and tracking apps, than the generations before them, and they are willing to pay a premium to access these services and devices.
Signs that the innovative tech-driven side of the market might be impacting on health and wellness can also be seen in the US and South Africa, where the sector is on the defensive but with growing levels of love. South Africa, generally a more optimistic market, saw 61% respondents feeling love for health and wellness companies
Product excellence driven by innovation and purpose
Developing high-functioning products and fresh innovation that meet consumer needs is the foundation on which all brands should be built. At present, the respondents across a majority of the markets felt health and fitness brands are stuck in the Stone Age. Notable exceptions are the UK and South Africa, where 53% and 59% respectively say they were cutting edge.
“Long gone are the days when businesses could win by having a stronghold on distribution, spending big marketing budgets and throwing the weight of a brand around,” says Jennifer Villalobos, vice-president and head of digital business at financial services brand NTUC Income.
“Product excellence driven by innovation eats brand building for breakfast, lunch and dinner.”
Purpose and behaving ethically is also becoming a crucial factor in brand choice and, while it is particularly important to younger generation, it is increasingly important to all consumers. Function, of course, remains the most important factor, brands that balance a good product and a good purpose are also in demand.
China and India still marginally value functionality over purpose, over half the respondents across the remaining markets want a balance between the two. Notably around half of all respondents in each market also said the behaviour of the company’s executives has strong influence on their decision to support a health and wellness brand.
“Consumers are really looking for purpose and are driven by that more and more, particularly where we have seen commodisation in many categories,” says Paul Davies, director of consumer marketing at Microsoft. “It can’t be dreamt up by the marketing team, though, it has to be core and central to a company.”
When tech ‘marries’ purpose
This notion of ethics and purpose actually also places the pharmaceutical companies that have traditionally dominated the health and wellness sector in a positive position. Having spent years working on transparency and compliance in regulated markets, they have proven ethics and that means purpose has become part of the DNA of many of the established brands.
The opportunity that these brands face now is how to play to that strength, while developing products and services that better address the needs of today’s consumers and, in particular, the younger generations. Technology needs to be at the heart of their business, so they not only become more cutting-edge, but also behave more cutting edge.
The health and wellness brands that are building equity based on innovation and tech will increasingly be faced with the burden of proving the worth of their exciting innovations. Research into the true benefits of their products and services will become increasingly important as the novelty begins to wear off their exciting tech.
While the female consumer in her 30s and 40s, as the gatekeeper of the family, has long been the target of consumer health brands, companies in this market ignore the younger generations at their peril.
Not only are younger consumers more willing to spend on premium produces, devices and services now, but winning their loyalty today will pay dividends when they become the gatekeepers of their own families.