May 12, 2020
Consumer and Health Brands Can Respond to the Need
[Co-authored by Kyle Farnham, managing partner, Global Consumer Practice, Finn Partners, John Bianchi, vice president, Health Practice, Finn Partners, and Gil Bashe, managing partner, Global Health, Finn Partners]
COVID-19 has changed the pattern of our lives in fundamental ways. Millions of essential workers brave a transformed landscape, while many millions more quarantine at home. To feed and maintain our stay-at-home existence, we’ve made it the age of Amazon and curbside access; demand for everything from groceries to medications to consumer goods has accelerated the growth of a “delivery economy.”
At the center of this delivery economy is a surging interest in health and wellness. The physical challenges and mental stress caused by staying at home during COVID-19 are forcing consumers to conduct their lives differently and are driving an era of mindfulness. From embracing healthier food to purchasing home gym equipment, consumers are taking control of their wellness in a way we have never seen before. The impact of this virus — the painful loss of human life — reminds us that doing so is in our best interests.
This shift is good, but is it temporary? Hopefully not: for years, health professionals have been urging people to adopt healthier lifestyles. It’s literally for our own good; despite advances in medicine, we’re getting less healthy as a nation. Life expectancy has dipped in recent years as non-communicable diseases such as diabetes, cancers, cardiovascular and kidney disease, and pulmonary disorders have become our country’s leading killers, accounting for seven in 10 U.S. deaths in 2018 and costing $3.5 trillion in annual healthcare costs.
Those who lead unhealthy lifestyles are most at risk for chronic diseases and, by extension, serious illness or death from COVID-19. Some years ago, as a culture, we abandoned healthy lifestyle choices in favor of pills — a more costly approach — to stave off illness. Just staying healthy in the first place would help prevent the onset of chronic conditions such as diabetes and heart disease, keep consumer and household costs down and have a spillover effect on public and private payer costs.
For two decades or more, we have been warned about these illnesses, which have reached epidemic proportions — 133 million, or roughly six in 10 Americans, suffer from at least one chronic condition; four in 10 suffer from two or more. We now also know that non-communicable diseases cause those who suffer from them to be at particular risk from COVID-19. The virus is also underscoring the socio-economic challenges and health disparities of those who want to eat better, but may live in “food deserts” or otherwise lack the means to access healthier foods.
A Tipping Point for Change
COVID-19 has unquestionably been a disaster to life and business. It’s not only a catalyst for many households to support healthier behaviors, it also demands leadership wellness brands take a stand. In addition, COVID-19 is an accelerator of technologies and consumer services such as telemedicine, wearables, home-food delivery and smart homes that have been waiting in the wings for years and had not yet seen widespread adoption until the pandemic forced the hands of consumers and communities.
We’ve seen this before: radical change in economies and societies — whether the World Wars, the Great Depression or the polio outbreak of the 1950’s — has historically forced shifts in consumer mindset and behavior. These shifts then become traditions and accepted cultural norms that also drive the evolution and adoption of new purchasing patterns.
Five years ago, leaders at FINN Partners hypothesized about how economic factors, especially market demand, were driving changes in the health system. Through the resulting FINN Futures Survey, we indeed found that consumers were putting convenience and cost at the forefront of their health decision-making. We noted at the time that consumers who had to change health insurance plans switched their primary care physicians just as often, requiring consumers to be the owners of their medical history and wellness regimens. Those findings also suggested that payers, providers, policymakers and health product leaders had an opportunity to help consumers gain greater value from their health dollar spend, with the goal of improving care and reducing cost.
The Time Has Come
Five years later, amid a health crisis of immense proportions, we are seeing just how ready consumers are to drive change. They are embracing the shift from office-based primary care to storefront health establishments, and now, to telehealth. It’s incredibly easy to access care in this way; after the crisis has passed, why would we go back to a model of care that’s less Amazon Prime-like, more difficult to access and a bigger drain on time and resources for both consumers and physicians? We truly will have difficulty forcing the genie back into the bottle.
Earlier this year, FINN sponsored the 2020 Global Wellness Trends Report, noting at the time that wellness is by nature a consumer industry that evolved to supplement what traditional medicine hasn’t tackled well, be it prevention, lifestyle change or mental wellness. The report found that wellness is a hyper-consumer, largely unregulated, $4.5 trillion market ripe for more rigorous reckoning, whether through media criticism, internal company policing, new vetting and evidence platforms or government regulation.
That time of reckoning is here. Watchdogs will need to ensure that wellness claims of all companies and providers are vetted and medically valid. To create true, customer-centric solutions, health and consumer products companies will have to shed institutionalized habits and customs, working in collaboration to reimagine what is possible and necessary from the perspective of the individuals who will use their offerings. Likewise, retail, food chains and home-exercise companies like Aaptiv, Glo and Life Time and now have the opportunity to become integral to consumers’ lives, cementing the self-care and wellness benefits they provide — first as habit, then tradition, and, ultimately, as cultural norm.
From Sick Care to Self-Care to Wellness
Companies entering into the wellness arena have many good reasons to do so. Certainly, there is now an economic impetus as stay-at-home consumers drive demand, but these companies are not only making money in a burgeoning market, they’re also benefiting from our ability to effectively help self-care. In this sense, consumer retailers, product manufacturers and healthcare providers must see that we have an opportunity to work in tandem to shift from sick care to self-care, and ultimately, to place wellness as a shared priority.
To enter the market and be part of the wellness and self-care wave, brands must ask, “Does our portfolio dovetail with consumers’ better-health needs?” Responsible brands must look at how they offer products to meet those needs now, and then review with an eye toward their portfolios passing muster in a post-COVID-19 world.