What does the economy have to do with it?  It turns out that although consumers are making many changes in their consumption behavior, health and wellness products are not getting left on the shelf.  In fact, many health and wellness products are viewed as alternatives when trading-down, for example fresh food as opposed to eating out, body care as an alternative to the spa, and hair care versus the salon visit. 

 Nevertheless, consumers are still exhibiting the trend we’ve seen away from CPG’s.  Private label health and wellness products have seen accelerated growth from 5% in soaps and body care to 17% in vitamins and upwards of 24% in the big winner of the year – OTC medicines.

 This has major implications for consumer-centric retailing and in-store marketing programs.

 By providing the information consumers need to make an informed choice in this sector, retailers can re-position their store to become the consumers’ health and wellness destination. Research reveals that some of the factors which contribute to incremental sales increases include:

• In-store visibility that allows for products to be easily found and compared side-by-side with their alternatives,
• Placement in-store
• Informative messaging at the shelf that speaks to their purchase decision criteria (by category)
• Retail atmosphere/environment.

According to the Hartman report, “the overall retail atmosphere makes a huge difference in consumer openness to trying new health and wellness products – quality perception and health and wellness perceptions are inexorably linked.”

It goes on to say that consumers hesitate less to try new products in a more elegant retail space, assuming “the quality is there” and that the retailer has been diligent in seeking out and presenting appropriate products.

 If retailers stay ahead of this trend and make this a priority in store design programs and in-store communications, then all signs point to healthy growth!

The National Retail Federation, representing the interests of many large retailers, has already issued their official opinion with suggestions to make reform more palatable for retail employers.  John Mackey, CEO and co-founder of Whole Foods recently published an op-ed in the Wall Street Journal echoing the sentiment of NRF.  His opinion rocketed all over the Internet and incited fierce criticism from plan supporters with the most outspoken calling for a boycott of Whole Foods.

The impact of health-care reform on retailers as employers is one angle that many are weighing in on.  Mackey’s op-ed generated over 500 comments alone.

However, from another perspective reform may present an opportunity for retail — the 46 million newly insured consumers of health-care.  Retail clinics have been hit or miss in grocery and drug store channels.  Initial predictions expected the clinics to explode however, insurance barriers and high upfront cost of treatment made them often no easier to access than a regular doctor’s office. Should the necessary reform become a reality, the number of retail clinics and primary care chains is likely to increase rapidly.  Retail channels who invest in expanding their health and wellness category, supplemented by an in-store clinic could see significant gains.  Reports indicate that among the best performing areas in retail are drug and health-care stores. While no one is sure what reform will look like, it appears that some sort of change is on the horizon.  It would be wise for retailers, particularly in drug, grocery and mass channels, to prepare for the inevitable.

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