In the majority of the sectors studied, L.E.K. Consulting found health and wellness spending comes from individuals who do not identify themselves among the core group of health and wellness consumers.
Core health and wellness consumers comprise 21 percent of the health and wellness population and 44 percent of health and wellness spend, according to the L.E.K Partners study. (Photo by Thinkstock.)
Health and wellness companies, including fitness centers, targeting only the avid health and fitness consumer may be missing an opportunity, according to a recent study from L.E.K Consulting, a global management consulting firm.
The health and wellness movement is fueling demand for innovative products and services in the sector, with growth opportunities dispersed across nearly all consumer product categories and in varied consumer segments, according to the two-part study by L.E.K Managing Directors Alex Evans and Chris Randall.
The study divided consumers into three groups based on consumer behaviors and needs. The core group was deemed as the "serious fitness devotee," "hardcore healthy" and "forever fit." The adjacent group was described as individuals who are focused on becoming healthier through one primary dimension of health and wellness. The peripheral group included people interested in being healthy but only willing to take small steps toward achieving that goal.
The study noted: "Core H&W consumers are important as they comprise 21 percent of the total H&W population and some 44 percent of sector revenues. By contrast, however, adjacent and peripheral groups account for 47 percent and 32 percent of H&W consumers, respectively, and a combined 56 percent of H&W spend. Thus, many H&W or aspiring H&W businesses should give equal if not greater emphasis to capturing the hearts and minds of those beyond the H&W core."
Spending categories covered in the study included gym and fitness centers, active apparel and footwear, select food and beverage categories, sporting goods and nutritional supplements.
“More than 70 percent of respondents, who consist of adults representing a cross section of consumer groups, identified with health and wellness themes and/or purchased health and wellness-oriented products and services,” Evans said. “To capitalize on overlooked or underserved segments of the health and wellness market, a one-size-fits all approach is neither feasible nor appropriate.”
“Understanding each targeted consumer group’s motivation is critical to delivering a winning product or service,” said Randall, managing director in L.E.K.’s Retail and Consumer Products practice. “The most important H&W consumer segments for a business will vary across sectors but will also be dependent on a given brand’s or retailer’s value proposition within their sector.”
Highlights of the study findings include:
Demographics and health and wellness spending
- A combined 81 percent of those in the core group are college graduates.
- 41 percent of the core group earn more than $75,000 annually.
- Core health and wellness consumers comprise 21 percent of the health and wellness population and 44 percent of health and wellness spend.
- Adjacent and peripheral groups (outside the core) account for 47 percent and 32 percent of H&W consumers, respectively; and a combined 56 percent of health and wellness spending.
Six key themes
The study revealed six cross-sector themes that identify which businesses are best aligned for maximum growth, according to L.E.K Consulting:
- Capture more than the core – businesses that only focus on core consumer needs risk leaving substantial money on the table.
- Don’t forget the proof points – most non-core health and wellness consumers are primarily seeking improved personal appearance, products and services tied to clear claims are often positioned to win.
- Clear unmet need for value – providing lower-cost health and wellness products and services is a largely untapped opportunity.
- Don’t wait for the customer to come to you – beyond the core group, consumers farther down the chain indicate a need for convenience and broader distribution
- Win with the core through specialization – core health and wellness consumers represent 44% of H&W spend and are a highly selective group that favor highly specialized and often niche brands and products.
- Let the core consumer define the winners – the buying habits of highly health-conscious consumers can serve as a bellwether for retailers and investors seeking products with the strongest growth potential.