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McKinsey and Company Fitness Report: Global Fitness Market Reaches $1.5 Trillion and Consumers Have New Priorities

McKinsey and Company Fitness Report: Global Fitness Market Reaches $1.5 Trillion and Consumers Have New Priorities

McKinsey and Company Fitness Report
Consumers are adding sleep and mindfulness to their wellness concerns and increasingly expecting personalized, digitalized experiences according to McKinsey and Company.

The global wellness market has ballooned to $1.5 trillion, with an annual growth of 5-to-10 percent and amble opportunity, but competition will be fierce for those dollars and companies should be responsive to certain trends — like an increased role for health services and digital products — while taking on a more expansive idea of wellness that includes mindfulness and sleep.

These are some of the central conclusions to Feeling Good: The Future of the $1.5 Trillion Wellness Market, a new study from the corporate consulting firm McKinsey and Company.

In a survey of 7,500 consumers in six countries — the U.S., the U.K., Germany, China, Brazil and Japan — 79 percent of respondents said they believe wellness is important and 42 percent consider it a top priority. 

“A rise in both consumer interest and purchasing power presents tremendous opportunities for companies, particularly as spending on personal wellness rebounds after stagnating or even declining during the COVID-19 crisis,” the report states. “At the same time, the wellness market is getting increasingly crowded, creating the need to be strategic about where and how companies compete.”

The researchers say they found six categories that fall under the umbrella of wellness that most interest consumers.

The first, health, “extends beyond medicine and supplements to include consumer medical devices as well as personal health trackers.” Apps are an increasingly important part of this area, helping people do everything from monitor symptoms to book appointments with care providers.

The second, fitness, includes services like gym memberships, as well as equipment and digital products, like apps and video content. This sector has been upset by COVID-19, with consumers spending less time in gyms and relying more on home devices like the trendy offerings of Peloton and Tonal.

The third, nutrition, includes diet programs, juice cleanses and subscription food services like Blue Apron and HelloFresh.

The fourth, appearance, encompasses traditional beauty products, as well as “athleisure”-style clothing and nonsurgical aesthetic procedures.

The fifth and sixth, sleep and mindfulness, are newcomers with slivers of the market, but consumers increasingly consider them part of wellness. Both are led by apps.

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The importance of these six categories, relative to one another, differs around the world, though there are some global truths: In all six countries, consumers spend more on health than any other category, ranging from 43.1 percent of wellness dollars in Germany to 64.6 percent in Brazil. The second-most important category is appearance in every country, except Germany, where wellness narrowly wins out.

Combined, the final three categories, nutrition, mindfulness and sleep, take up less than 20 percent of wellness spending in any country, but there is significant national variation in how much spending as a percentage goes into each. The U.S., U.K. and China spend the most on nutrition, about 10 percent of health dollars in all three. Brazil, Germany and Japan spend about 5 percent on nutrition. Mindfulness is most popular in the U.S. and Brazil, with 6.3 and 5.3 percent of wellness dollars going to calm and clarity; it does not move past three percent in other countries. People in China spend the most on sleep products; 1.5 percent of China’s wellness dollars go to sleep concerns. That category does not break past one percent in any other country.

As for actionable information for companies in the wellness market, the McKinsey research team had a few suggestions:

  • Go digital in everything. In addition to utilizing apps for health purposes, people increasingly shop online for products and workout with online instructions. “Create seamless omni-channel and digital offerings to ensure that you meet your consumers where they are,” the authors suggest. For product manufacturers, that might mean supply chains, package sizes and marketing geared for e-commerce. For service providers, like gyms, that might mean incorporating apps and online experiences into “a holistic online strategy.”
  • Personalization and customization are increasingly important in consumer decisions. “Consider introducing personalized or semipersonalized offerings to your product road map,” the report suggests. Perhaps use online questionnaires to gear customers to products that will be a good fit for them. Although privacy is still a concern, using in-phone trackers to fine-tune app experiences might also be worthwhile. 
  • While less than 15 percent of consumers in four of the countries studied said they made purchases based on the word of social media wellness “influencers,” in China and Brazil, that number jumped to 45 and 55, respectively. YouTube makeup tutorial-posters and TikTok fitness gurus can have real power. The report recommends “partnering with agencies to identify people who will be a natural fit with your brand and resonate authentically with your target consumer base.”
  • Health product consumers are increasingly seeking products that are natural or “clean.” The report recommends manufacturers seek ways to create products that warrant these labels and label and market them as such.
  • Category lines are blurring. Is Peloton a stationary bike or a digital subscription service? Look for opportunities to extend brands beyond traditional offerings. One example the report cites is Lululemon’s purchase of Mirror, putting the company in the clothing, instruction and equipment spheres.
  • Services, be them personal or digital, have increased as a portion of wellness spending and can be incorporated into offerings where they had not been. Consumer healthcare companies could consider “diagnostics or coaching offerings” and fitness companies should consider a Peloton model where a digital service is a part of the experience.

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