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Kantar sheds light on potential of health, wellness

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JERSEY CITY, N.J. — Retailers in the U.S. are sitting on a gold mine of health and wellness opportunities, but they need to know where and how to dig. This was the essential theme of the Kantar Retail Health and Wellness Conference held here last month.

By 2025, according to Kantar, health and wellness has the potential to contribute $1.2 trillion to the U.S. retail market, and all brands — be they pharma, food, over-the-counter health, beauty, personal care, confections, natural, general merchandise, or connected technology — stand to benefit, Kantar noted. Health and wellness shoppers, according to Kantar, are also looking to retailers for support in this space. And they’re looking online.

“We know that one in 20 Google searches are for health-based information,” said Kantar director of retail insights Brian Owens. “That should tell you something. Folks are looking for solutions.”

With 60 million Americans lacking adequate access to primary health care — despite the increased number of insured Americans through Obamacare, retailers can help fill a blank in the health and wellness landscape, according to Owens. Putting that number into perspective, 60 million is more than the combined populations of New York, Ohio, North Carolina and Florida.

“Consumers are increasingly demanding health care services,” Owens said, adding that this is why companies such as Publix Super Markets Inc. are focusing on vaccinations and advertising such services.

Brian Owens_Kantar Retail

Brian Owens at the Kantar Retail Health & Wellness Conference

Another example Owens cited is CVS Health, which offers Bayer-sponsored free baby screenings at its MinuteClinics. “So if you think you can’t advertise or market some of these services, here is an example of yes, you can,” Owens said. “We have to be more creative with the dialogue and the conversation, with ways to market in a more tactful, targeted way.”

Essential to marketing in the health and wellness space, however, is understanding that health and wellness are two separate shopping experiences and that the health and wellness shopper are not necessarily the same. “People think about health and wellness differently, two separate trip missions,” Owens said.

So it’s important for retailers in this space to know which shopping trip they are focused on. “Because if you’re focusing on wellness, if laughing say is No. 1, are you helping people laugh with your product? Are you helping them have fun? Are you using gamification at all? If you’re truly trying to penetrate that wellness mindset, there are different attributes that fall under that,” Owens said.

But along with creating opportunities in retail, the lack of access to adequate care is adding stress to an already stressed system, especially emergency rooms, according to Michelle Potorski, senior director of health services marketing for CVS Health.

“We all know many people will go into the ER when they don’t need to, and they could seek other options,” Potorski said. “And it’s coming at a price tag of about $4.5 billion.”

Adding to the high costs of insurance, Potorski noted, are the high-deductible health plans or the consumer-directed health plans, which have been on the rise for years at a very steep compound annual growth rate. It is estimated that over 40% of the population have a high-deductible health plan today.

“So employers are looking to share risk and share cost. And people are choosing exchange plans, and for a lot of reasons people are squarely in the driver’s seat,” she said. “And it’s really up to you as an individual to take responsibility of the most efficient health care choices.”

For consumers, especially those coming to the pharmacy, rising costs result in lower adherence, according to Potorski, with many consumers taking shortcuts in therapy and choosing which medications to take and which ones to skip — for example, taking either blood pressure or cholesterol meds because they can’t afford both. This reality, along with the growing demand for convenience, presents a substantial opportunity for retailers to step in and help solve these ­problems.

Potorski cited CVS MinuteClinics as an example. With more than 1,100 locations nationwide, these retail clinics have become the largest health clinic provider in the country, according to Potorski.

“Our specialty division helps patients who suffer from really complex diseases like Parkinson’s or cancer or MS,” Potorski said, adding that the treatments for these conditions can reach into the tens of thousands of dollars per month. But the services available at MinuteClinics can save not only money but lives.

“We actually have specialized nurses that go into people’s homes and administer these treatments intravenously, and it has really changed the quality of life for many people who suffer from these diseases,” Potorski said. “And then there is [pharmacy benefits manager] CVS Caremark, which really helps thousands of employers and insurers across the country manage prescription costs and really helps save money for about 75 million members and employees.”

And with life expectancies on the rise, the role of retailers within the health and wellness segment will only continue to increase as well.

“Some statistics say that 30% of babies born today will easily live beyond 100 years of age,” said Lynette Cooke, global chief executive officer of Kantar Health. “So that means that the aging population that we have today will continue, and this aging population wants more from their health care companies and their doctors.”

The increase in patients is not just coming from a growing elderly population, as Cooke pointed out, but also from more advancements in treating disease. There are new drugs being developed, with 30% of those drugs for rare diseases, so technology and research is now bringing these diseases to the forefront. And more money being spent on these diseases means more new patients coming into the system — patients that weren’t being treated before — thus more opportunities for retailers to address their needs.

New patients are also coming from emerging markets, such as areas where urbanization is increasing, according to Cooke. “So the system is bloated all around the globe. That means that there will be more patients in the system, more consumers,” she said. This also means increased pressure on treating these new patients and meeting their needs, which also highlights the growing shift from health care to health and wellness.

Another example of this shift that Potorski pointed to was the decision by CVS Health to stop selling cigarettes and tobacco-related products. “We decided that we were willing to give up $2 billion in revenue to protect the health of our consumers, and to encourage them to make healthier choices,” she said. “So on September 3, 2014, we quit for good. And that morning started with our senior leadership ringing the bell on Wall Street, and America woke up to CVS with a new name and a new purpose.”

But the company didn’t just quit selling cigarettes, it began offering smoking cessation programs, which, according to Potorski, have been a great success for many customers as well as the company.

“We encouraged smokers to come and really quit with us, help kick that habit. We were wondering how much response we would get. And actually the response was really amazing. Over half a million people visited our smoking cessation hub and 260,000 smokers came and talked to the pharmacists,” she said. “What we found is that when you stand strongly for something important, others stand with you.”

One shopper, however, that is being overlooked in the health and wellness space, in Owens’ view, is the low-income shopper, who Owens said is under more stress than any other shopper.

“They’re the forgotten demographic. They’re focusing on trading up all the time. But if you think about true incrementality in the space, that $1.2 trillion disproportionately is coming from folks who are making less than $60,000 a year.”

Retailers, according to Owens, have to figure out ways to alleviate the stress of this shopper, such as through sizing and pricing of products. This lower-income demographic, Owens pointed out, is at risk because their costs are disproportionately high because they’ve pulled out of the category.

“They’ve given up on whether or not they have a right to play in the self-care environment,” Owens said. “They’re just letting themselves be sick because they can’t afford to take more charge of their lives. We have to figure out how to penetrate the Dollar Generals of the world, the Dollar Trees of the world. These are the retailers that are discounters, that provide those solutions. We have to figure out ways to come up with solutions. We have to work harder at that.”


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