The future of consumer health: What and how to serve consumers | Deloitte US has been saved
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By Carly Allen, manager, and Laura Grayling, senior manager, Monitor Deloitte Consumer and Life Sciences
(This blog was recently published by Deloitte’s UK Centre for Health Solutions/Thoughts from the Center)
Imagine a world where you exist as much online as you do in real life. All your interactions, from the products you use to the services you seek, are built for you and automation makes your time and productivity go a little bit further each day. The alarm goes off on Monday morning and your stomach starts to rumble for breakfast. You know from your wearable tech that your body is low in potassium this week, but it is synced to your meal app, which has already recommended a vitamin-enriched banana smoothie. The only catch—you are out of Vitamin D. Your digital home assistant has already ordered supplements that are on their way.
Not everything in the future will be different, but, as we explore below, technology is accelerating consumer health expectations. We have identified some of the key trends shaping the consumer health market and consider two competing undercurrents: How to serve consumers and What to serve consumers, providing some provocative reflections on the health-conscious mindset of future consumers.
How to serve consumers
Consumers are increasingly comfortable with digital interaction, and willing to share their health information, including data on blood pressure, heart rate, cholesterol, and body fat with retailers.i Moreover, the world is speeding up and consumer technology is increasingly on demand, helping us to be more efficient and effective as our knowledge and insights improve. This is creating a number of trends:
1. Hyper-personalized service: Imagine if your shampoo didn’t only make your hair extra glossy but was also customized with nourishing supplements personalized to your body’s needs? Hyper-personalization for wellness is already here. Personal care and beauty technology are fusing with medical research as evidenced by companies using a consumers’ genetic composition or customers’ DNA to design personalized products such as supplements and skincare. Research shows that consumers believe hyper-personalized products are worth premium prices even though the true benefits are as yet unknown.ii Will consumers in the future see a difference between consumer health and beauty? Or will they expect their health products to go above and beyond in meeting their needs?
2. Ultra-fast service: Grocery shopping has already been heavily disrupted by the shift to online delivery.iii Throughout and after the pandemic, start-ups competed to be the next unicorn in the last-mile delivery space, bringing these online orders to the consumers’ door in minutes, powered by the gig economy. But what if this went a step further? It is plausible that all non-perishable products from haircare to cleaning products could be tagged and resupplied by subscription when running low. In this future, consumers won’t want to think about running errands, but will expect everything to be available on demand, all the time. Combined with other trends, such as hyper-personalized services or personal health data, this could create an opportunity to increase customer loyalty.
3. Experiential moments: The time of traditional consumer engagement with brands has passed. Consumers with disposable incomes want dazzling experiences that cut across physical and digital spaces and are tailored fully to their needs.iv Growth in access to concept stores is providing consumers with alternative options to a traditional store front. This is exposing consumers to personalization, customization, seamless physical and digital experiences, and in doing so, changing consumer expectations. For example, stores such as Colette in Paris and Story in New York use their retail space to continually surprise, innovate and tailor their products and experiences to consumers.v So what does this mean for the future? Does a physical shop need to sell? Or is it a means to experience something unique, to build brand affinity and memorable moments?
What to serve consumers
Advances in technology and use of data also have a flipside with consumers increasingly liberated to take a slower, more conscious, and thoughtful approach to consumption in consumer health.vi
1. New working models transforming daily life: As we emerge from the COVID-19 pandemic, hybrid working models appear to be here to stay and will be a key focus of innovation to optimize the employee experience. The change to working models, namely working-from-home, has been driven both by employee preferences and by companies themselves. Working from home can present challenges for consumer and consumer health care brands. Some consumers who work from home have fewer usage occasions for beauty and personal care products such as skincare and shampoo.vii As changes to usage frequency, habits, and occasion continue to fluctuate, companies will need to continue to adapt their offerings and positioning and potentially focus on fewer, more premium products.
2. Prioritizing self-care and wellbeing: Alongside new working models, adults are increasingly self-prioritizing, elevating their focus on self-care and wellbeing and subsequently adjusting the structure of their daily life. Products and services that target exercise such as at-home equipment and classes, sleep and meditation apps (such as Calm and Headspace) and digitally-enabled models of care for mental health have soared in popularity during the pandemic with services tailored to be integrated easily into everyday life.viii, ix Whilst long-term evidence on the effects of this re-prioritisation are currently unavailable, early studies have found that people who were more engaged in conscious health efforts did benefit from improved mental health during the pandemic.x Given the interdependencies of health and wellness, as well as the likely release of further data supporting the benefits of self-prioritization, there is an opportunity to expand communication of newly proven product benefits. Benefits can extend beyond what products do and how they make you feel, into the tangible positive health outcomes they can provide.
3. Rapid access to personal health data: Consumers are increasingly adopting next generation wearable tech and the trend is set to continue. Between 2021 and 2028 the global wearables market is forecast to grow at a 15.4% compound annual growth rate (CAGR) to $114 billion.xi Despite natural concerns around data privacy, consumers have shown that they are increasingly willing to share their health data and in turn lay the foundation for the future of consumer health. As consumers share more data, they are likely contributing to further research and development of consumer health care products and offerings. As well as supporting product development, rapid access to personal health data allows consumers to make informed decisions about their health, supporting overall wellness and preventative health approaches. In turn, this can affect their purchasing behaviors with respect to consumer health and wellness products, and shape future product portfolios.xii
4. Conscious and sustainable consumption: While environmental responsibility is becoming a norm and not an afterthought, what does this mean for consumer health brands?xiii, xiv The number of UK consumers who have adopted a more sustainable lifestyle, including increasing their focus on making conscious sustainable purchasing decisions, has risen in the past year, but cost is proving to be a barrier for those wanting to make more sustainable and ethical purchasing decisions. Consumers recognize what makes a product sustainable and want to consume clean products consciously and thoughtfully. However, the cost of living is an impediment, with 28% of consumers not adopting a more sustainable lifestyle in the last 12 months because of current economic uncertainty, including the impact of rising prices. With additional calls for greater transparency, especially across supply chains, and a need for brands to help customers and consumers trust their sustainability efforts and commitments, it is clear that consumers expect the brand to do the legwork .xv
What might 2023 look like for consumer health?
Whether it is responding to increasingly on-demand shopping experiences or keeping up with desires for more conscious consumption, 2023 is set to be another tumultuous year. For consumer health businesses to ride this wave successfully, they will need to translate these macro trends into precise actions and interventions for their consumers; consumers who are also reacting to the supply and demand challenges of increasing costs and discretionary spend pressures that lie ahead.
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