COVID-19 has had a profound impact on health and wellness shopping. The pandemic was a catalyst that blurred the boundary between health and wellness, with health subsuming wellness into its definition. As a result, brands and retailers are repositioning their products and services to focus more on health. Personal care products are now personal health products, and brands are realigning their merchandising and marketing strategies to convey this messaging.
Retailers, particularly drug stores, have been reinforcing shopper engagement with expanded last-mile fulfillment, advanced analytics and digital health services since well before widespread pandemic lockdowns began in March 2020. However, the persistent labor shortage issue over the past year has negatively impacted shopper engagement, making a strong case to accelerate retail technology investments. Loyalty platforms are pivoting to optimize personalization and empowering shoppers to set and achieve both physical and mental health goals.
U.S. shopper behavior has also changed over the past two years. Post-COVID shoppers are more concerned with safety and expect not just a transactional relationship from retailers, but actual inspiration. According to May 2021 ShopperScape data, 54% of shoppers look to retail to give their lifestyles a lift with stress management tools, health and wellness resources, and rewards for making healthy choices. And retail is responding.
Key components of the shopping experience
The transformation of health and wellness across brands, retailers and shoppers is causing both the functional and the emotional foundations of the post-COVID shopping experience to evolve .
- Steer: From product availability to disruption — When COVID-19 lockdowns went into effect, retailers focused on the availability of household cleaning and sanitization products and over-the-counter medications. Global supply chain interruptions are still challenging stock levels of household essentials, but retailers are leveraging private label products and multiple suppliers to address the merchandising gaps.
However, the rules of merchandising and assortment mix have now changed. Disruption at the shelf is key. Retailers are simplifying navigation and driving incrementality by curating solution-based end-caps and aisle displays, featuring a wide selection of complementary products on a particular ailment or condition. Look at CVS, Rite Aid and Walgreens. All are creating disruptive multiproduct and multibrand mental health end-caps that showcase pillows, melatonin supplements and aroma therapy products.
Outside the drug channel, Target reinforces the link between clean, tidy surroundings and better mental health with an online health and wellness section that offers both cleaning and storage products.
Mental health is even making inroads in the pet category. Petco offers a variety of anti-anxiety and stress relief items, including CBD pain management products.
- Sensory: From shelf support to touchless interaction — Retailers are integrating voice-enabled apps and touchless displays to minimize shoppers’ concerns about contamination. They’re also using AI-enabled voice analytics to anonymously analyze ambient sounds and other in-store chatter to inform assortment and merchandising strategy.
Touchless interaction is also more widespread than it was before COVID. CVS allows touchless payments with Venmo and PayPal. Walgreens offers nationwide contactless same-day delivery on more than 24,000 products in two hours or less.
In the handling realm, QR codes have become ubiquitous on pallet displays across channels, and some brands enable digital interaction with current packaging designs. The Digimarc digital watermark is one technology that lets shoppers scan a product label with their phone for product traceability, recycling and other information.
- Stimulate: From inspiration to personalization — Drug retailers are investing in developing digital ecosystems that closely monitor shopper behavior across multiple touchpoints. Cloud migration lets retailers create shopper segments and tailored promotions via loyalty programs.
To inspire shoppers to take charge of their health, the myWalgreens loyalty program provides access to health and weight management tools. Shoppers can upload and track biometric information on the loyalty app that Walgreens then analyzes to recommend products and personalize promotions.
CVS reinforces its commitment to providing holistic health management through its Noom partnership and has expanded its HealthHub network to proactively provide health resources.
The democratization of technology solutions has lowered the entry cost of digital engagement. Dollar General, Lululemon, Amazon and Sam’s Club are all actively engaging in health and wellness with distinct offers, elevating loyalty, accessibility and the shopper experience. Walmart acquired telehealth provider MeMD to offer a suite of digital physical and mental health services.
- Streamline: From omnichannel expansion to lifestyle integration — Lifestyle integration will be the most important post-COVID driver of health and wellness success. Retailers are leveraging the power of their mobile apps, loyalty programs and ecosystems to inspire health and wellness shoppers and enhance engagement in delivering experiences. Loyalty programs now offer tutorials, workshops, tools and services to maximize shoppers’ share of life (maximizing the time they spend on a retailer’s ecosystem).
CVS recently became the first drug retailer to announce that it will be taking its footprint into the metaverse, adding a new dimension to virtual health and wellness services via augmented and virtual reality tools.
Implications to drive future growth in health and wellness:
- Optimize your brand’s in-store and online disruption.
- Elevate sensory engagement using digital touchpoints.
- Leverage advanced analytics to expand share of life.
Amar Singh is senior director at Kantar. He can be contacted at [email protected]