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ON THE FUTURE OF WELLNESS
The trends defining the wellness market
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| Four years ago, investors and consumer brand executives often asked us to define what wellness meant to consumers, describe the size of the health and wellness market, and answer whether wellness was just another marketing buzzword that would fade away as consumers found themselves intrigued by something new. Then, COVID-19 helped accelerate growth in this space, as all things health and wellness were top of mind for global consumers with unresolved questions about how to keep themselves both mentally and physically healthy.
As the pandemic has moved into its endemic stage, the focus on wellness has remained. Our Future of Wellness research shows not only that the sector could offer significant growth potential to investors, businesses, and employers but also that it has demonstrable staying power.
Eighty-two percent of US consumers consider wellness a top or important priority in their everyday lives, which echoes our findings in China, the United Kingdom, and other countries. Wellness interests consumers not only across geographies (often with more similarities in their preferences than differences) but also across demographic and income groups. The market—which we consider to be made up of categories that address health, sleep, fitness, nutrition, appearance, and mindfulness—has grown to around $1.8 trillion globally, up from $1.5 trillion in 2021. We expect the US market to continue to grow between 5 and 10 percent annually.
Just because the opportunities in wellness are plentiful does not mean the space is easily conquered, however. New entrants and incumbents may underestimate the wellness space and consumer sophistication regarding it. Businesses and investors that understand consumer behavior trends on the horizon will be best positioned to find success in the wellness space.
Consumers’ expectations for products and services have grown, and their ability to sniff out false wellness claims has improved, too. Consumer trust is more important than ever in wellness; our Future of Wellness research indicates that doctors’ recommendations for wellness products and word of mouth influence consumer purchases more frequently than other sources, such as posts from social media influencers.
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| | | “In the United States alone, we estimate that the wellness market has reached $480 billion, growing at 5 to 10 percent per year.” | | | | |
| Meanwhile, constant product and tech innovation makes it difficult to sustain a strong value proposition and growth over time. Consumers now demand more than the basic levels of personalization, but so far, personalization offerings have remained somewhat one-dimensional. Leaning into new technology, such as generative AI, could help deliver deeper levels of personalized insights on an array of biometric data. That could give companies a leg up in the market.
None of these consumer insights should be discouraging. Rather, it’s an opportunity to create truly valuable consumer offerings. Consumers know what they want, and companies can meet those needs. Plus, consumers are increasingly proactive in monitoring their health and open to new tech tools that help them do so. Our research indicates that consumers are willing to use telemedicine services, biometric devices, and at-home health-testing kits.
Consider sleep, a longtime focus for wellness brands—and an area where consumers say they have the most unmet needs. Perhaps because of the numerous factors that can affect getting a good night’s sleep (including diet, exercise, and caffeine), no one tech giant or emerging brand has been able to own the market. Through our research, we know that consumers are looking for science- and data-backed solutions to their wellness problems, so the company best able to use data to address as many sleep factors as possible will gain a competitive edge.
Other areas, such as women’s health, are woefully underserved, with consequential research and funding gaps that result in a lack of consumer choices. The products and services that are available in the women’s health space often focus on reproductive health. (Our research indicates that women spend more on menopause- and pregnancy-related products than on other reproductive-health products.) That said, the women’s health space can also look beyond reproductive health to include conditions that affect women disproportionately, such as headache disorders, autoimmune diseases, and depression.
Our findings should not inspire executives to overhaul a business at the expense of its core brand identity. Instead, consumer leaders should be asking questions such as, “What is the innovation that we will bring to market next?” and, “How am I going to communicate that to consumers?”
The wellness market may be evolving, but one thing is certain: it’s here for the long haul.
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| | | | Anna Pione is a partner in McKinsey’s New York office. | | |
| | | | | | | Delphine Zurkiya on generative AI in healthcare | | | Generative AI may change the way we interact with doctors, making our visits smarter and more efficient. For starters, making an appointment could get a lot easier. | | | | |
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