The Next Wave of Wellbeing

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For nearly a century, retailers and other businesses have relied on television advertising to promote their products. And while advertising for some customers has been morphing more and more into the mobile device arena and streaming on demand, television still remains a useful medium for conveying marketing messages to broad segments of the population. Advertising can provide an insightful view into the consumer\’s psyche and can reveal what consumers are most interested in at a given point in time as well as current and emerging trends.

[callout]Consumers can now monitor their own health—including blood pressure, heart rate, insulin levels and more—through mobile devices, such as Fitbit or Apple’s iPhone Health App.[/callout]

Retail Intel took a deep dive into advertising, researching hours of TV programming, inventorying ads as to content, frequency and exposure. In terms of quantity, prescription drugs and other medical products and services ranked in first place, totaling 22 percent of the ads viewed in a typical evening. Food ads came in second, with 17 percent. Food also figured prominently in many non-food ads, that utilized images of food and of people eating, usually while socializing. If you include the 11 percent of non-food ads that contain images of food, then a total of 28 percent of the ads viewed in a typical evening contain images of food. Health and Food account for a combined 50 percent of all the ads that viewers see in a typical evening.

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Revolutionary Changes Underway

It is no surprise that Health and Food are top advertising categories as these retail categories are currently going through major transformative change. Healthcare, which in the past was available only at professional healthcare centers, including doctor\’s offices, clinics, and hospitals, is becoming distributed throughout national retail chains, including drug stores, grocery stores, big-box discount stores, and neighborhood walk-in clinics.

The increase in consumer interests in health has refocused our society with new priorities about individual responsibility for maintaining personal health through exercise; diet and wholesome activities; more interest in preventative medications; and other wellness trends, including yoga, meditation, and the like. In many cases, consumers can now monitor their own health-including blood pressure, heart rate, insulin levels and more-through mobile devices, such as Fitbit or Apple\’s iPhone Health App.

Likewise, food-which foods we eat, and how that food is sourced, packaged, sold, and consumed-is making a dramatic break with the past. Meal kits, with prepped, ready-to-cook ingredients, are a hit with time-starved and labor-shy millennials. Subscription services bring such kits right to the consumer\’s door, on a daily basis, and the giant wave of home delivery of restaurant meals, via Grubhub and other delivery services, is a trend that is bound to grow over time.

Positive Diagnosis for Health-focused Retailers

Since around the year 2000, small dedicated health clinics have sprung up in retail drug chains, grocery stores, and big-box discount stores, around the country. To date, CVS has 1,100 stores with Minute Clinics (plus another 9,900 traditional drug units). The chain is currently introducing a new concept called HealthHUB, with plans for 1,500 units by 2021. HealthHUB will dedicate around 20 percent of store floor space to health products and services, emphasizing ongoing health care for chronic conditions, including diabetes, hypertension, cardiac disease, and sleep Apnea, which need frequent monitoring. It will also provide home health care managers, infusion treatments and home prescription delivery. The convenience factor of accessing these services near home instead of making lengthy trips to doctors\’ offices or hospitals is of considerable benefit to patients. CVS Health and health insurer Aetna recently completed a $69 billion merger. Alliances and collaborations between retailers and traditional health care service providers is likely to be the wave of the future.

[callout]Google has contracted with the nation’s second-largest hospital group, Ascension, to directly acquire patients’ medical records, which it intends to use for its AI health initiatives to improve patient care, under its project “Nightingale.”[/callout]

Competitor Walgreens Boots Alliance, currently with around 400 walk-in clinics in its Walgreens drug stores, is also rethinking its clinic offerings, moving away from treating minor conditions and acute care to focus on chronic conditions. The Centers for Disease Control and Prevention (CDC) estimates that around 90 percent of the nation\’s $3.3 trillion in annual health spending goes for ongoing and chronic care, now mostly provided in hospitals. UnitedHealthCare Group\’s health benefits business has formed a partnership with Walgreen\’s to open Medicare service centers in Walgreen\’s stores, with the first 14 units opening in January.

The world\’s largest retailer, Walmart, has just opened its first 10,000 sq. ft. \”Walmart Health\” center in Dallas, Georgia (near Atlanta). The new concept will replace the retailer\’s current in-store Care Clinics and will offer expanded services, including primary medical care, dental care, optometry, X-rays, EKGs, laboratory services, and behavioral and general health counseling. An Essentials PetCare clinic is also included, which will provide basic, non-emergency pet care. Walmart says it will provide \”low transparent pricing\” for health products and services.

Technology companies including Apple, Google and Microsoft are aggressively pushing into the health arena as well, with innovative products, health tracking devices, virtual physicians, and even online testing. Google has contracted with the nation\’s second-largest hospital group, Ascension, to directly acquire patients\’ medical records, which it intends to use for its AI health initiatives to improve patient care, under its project \”Nightingale.\” (Since it is currently doing this without the involved patients\’ knowledge or permission, privacy concerns are an issue. Google claims the program meets all current privacy laws.)

Not Your Grandfather\’s Grocery Store

Amazon\’s entry into the grocery sector with its acquisition of Whole Foods Market in 2017, served as the catalyst for a wave of change throughout the grocery industry. Kroger, Publix and other large grocery chains, as well as big-box discount stores Target and Walmart, are rushing to re-think and improve their food offerings and services as they are being forced to enter the more competitive field of online shopping. BOPIS (order online/pick up in store), increased from 4 percent of all e-commerce orders in 2017 to 11 percent in 2019, according to estimates by Nielsen, and BOPIS, including curbside pickup, is especially popular in the grocery sector. According to research from Brick Meets Click, this year, online grocery sales increased by more than 15 percent, year over year, and now represent 6.3 percent of all grocery spending in this country. Even more competition is on the way, with Amazon announcing that it will soon be launching a new grocery format in Los Angeles in 2020, separate from the Whole Foods concept. And European grocer Aldi has committed to massive U.S. expansion, expecting to have 2,500 stores by 2022.

[callout]The increase in consumer interests in health has refocused our society with new priorities about individual responsibility for maintaining personal health through exercise; diet and wholesome activities; more interest in preventative medications; and other wellness trends.[/callout]

To encourage customer engagement in-store, some grocers have installed more in-house dining options, including coffee shops and bistros or wine bars, and now offer cooking schools and demonstrations, as well as dedicated kids\’ areas. Technology is also being incorporated to make the in-store shopping experience easier; with mobile shopping apps that inform of special buys and help locate goods within the store; with shopping carts that automatically tally purchases; and with educational videos that plan menus, provide cooking instructions, and help pair wines. While the convenience of online grocery buying appeals to many, the in-store shopping experience is still hard to beat, filled with savory smells, tempting free samples, and visually-stunning arrays of seasonal offerings. But most importantly, now customers have options to shop however they like.

Not all is smooth sailing however. Recent customer complaints have arisen related to BOPIS. In some stores, aisles become clogged with employees, filling boxes with items snatched off of shelves and rushing to meet pick-up or delivery deadlines. Using store inventory to fill orders instead of warehouses, runs the risk of inconveniencing and irritating in-store customers, who are trying to complete their shopping in a timely, organized, and pleasant manner.

As the demand for home-delivery meals increases, some businesses are exploring the feasibility of delivery-only freestanding regional kitchens, that take online orders and provide no options for on-site dining. Kroger is currently exploring this concept, called Kroger Delivery Kitchen, in a few cities, as a joint venture with ClusterTruck, a specialty software platform. The danger of such ventures is that mass-produced food, hurried out the door, may become subject to pressures of profit and time, and devolve to \”commissary\” standards, such as seen in schools and institutions, instead of maintaining a chef-prepared cachet.

With top-of-mind advertising positioning and retailer adaptation and innovation, the health and food categories are positioned for major change and major growth over the next few years.

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