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Self-care is playing a major role in the future of retail

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mark mechelse

Mark Mechelse

It’s no secret that the retail industry is experiencing unprecedented disruption and a decline in foot traffic as a result of the proliferation of e-commerce and the subsequent migration of products from physical stores to online marketplaces. Consumers continue to gravitate toward online shopping for the sake of convenience. In fact, Global Market Development Center (GMDC)|Retail Tomorrow predicts that some merchandise categories will be reduced by as much as 90% within physical retail by 2025.

But within our 2018 Health and Wellness Retail Drivers Research Report, GMDC|Retail Tomorrow has identified health, beauty and wellness as categories in which consumers are bucking the convenience of online shopping in favor of traditional brick-and-mortar visits. More than ever before, consumers want local, natural and personalized products and solutions that help them to look good and feel better, prevent disease, treat chronic conditions, and improve their quality of life.

The quickly growing self-care movement — which inspires consumers to embrace proactive life choices through investment in accessible wellness and better-for-you methods — is playing a major role in the future of retail. If self-care occasions and trips are recognized and properly merchandised against, traditional brick-and-mortar will be positioned to solve future space issues and win back profits previously lost to the online marketplace.

The consumerization of health care, or self-care, as GMDC|Retail Tomorrow defines it, combined with rising health care costs and a growing distrust of the U.S. health care system, is driving new consumer habits and buying patterns — and store traffic. GMDC|Retail Tomorrow research finds that only 53% of U.S. citizens report trusting in the health care system and, as a result, consumers are seeking a broader selection of self-care services and solutions within retail as they take active roles in controlling their personal health outcomes. Likewise, nine in 10 consumers report a desire for retailers to be more involved in their personal wellness.

The $64 billion nonprescription health segment is growing faster than year-over-year total store sales across food, drug and mass retailers. Analysis reveals that the price of a self-care basket is over twice that of a non-self-care basket.

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Information is a core element within self-care, and consumers are receiving their information from sources other than the retail community. As a result, consumers are building trust with other educational resources, leaving the retail community vulnerable to alternative channels, particularly e-commerce.

GMDC|Retail Tomorrow suggests that brick-and-mortar food and drug stores align their health, beauty, wellness and personal care services with this opportunity to play a key role as healthy living experts. This transformation can help retailers grow in the face of online retail competition by engaging with customers and providing personalized recommendations.

Many health care categories already have high household penetration and are used as part of a daily regimen. As a result, distribution of these products is widespread, with little differentiation in offerings from one outlet to another. Differentiating oneself from other retail competitors is critical, but this opportunity begins with immersing ourselves with the shopper rather than an expensive battle among retailers. For example, research indicates that 46% of consumers have visited a retail clinic in the past year and 63% indicate that their impression of a store would improve if it offered healthy checkout lanes.

Food and drug retailers are beginning to recognize and respond to this shift, transforming into health and wellness-focused destinations that inspire and complement healthy lifestyles in an effort to enhance the shopping experience and capitalize on future health-related brick-and-mortar visits.

Grocery is especially well positioned to speak to customers about self-care and has seen this trend grow over the past decade — the number of in-store clinics has increased from 300 to 3,100. Additionally, consumers are becoming more proactive about self-care and moving away from the legacy health care model.

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Walgreens in April announced a partnership to bring primary care doctors to some of its Houston stores. CVS Health is currently implementing a retail concept called HealthHUB, in which the pharmacy will incorporate a range of health care services and products — including nutrition counseling, health and wellness classes, and medical equipment — at selected pharmacies nationwide. The company plans to have 1,500 HealthHUB locations operating by the end of 2021.

The self-care space presents brick-and-mortar retail an opportunity not only to survive but also to thrive, remain relevant and grow in a time of online disruption by supporting and responding to consumers’ health and wellness needs.

This October, GMDC|Retail Tomorrow is launching the Selfcare Summit, the only industry gathering focused exclusively on the consumerization of health care and how the self-care movement is impacting retail and reshaping health care.

The Selfcare Summit will take place October 3 through October 7 at the JW Marriott in Indianapolis. For more information or to attend the summit, visit www.selfcaresummit.org.

Mark Mechelse is vice president of insights and communications at GMDC|Retail Tomorrow. He can be reached at mmechelse@gmdc.org.


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