The wellness industry is growing fast and bound to be a bigger part of the retail scene, according to one of the business world’s visionaries, Mindy Grossman, chief executive officer of Weight Watchers and former ceo of HSNi.
“The wellness industry is approaching $4 trillion. Healthy living transcends every product category and experience,” said Grossman, while moderating a panel on wellness Monday at the annual Financo Forum. “The idea of purpose today is so important.”
According to Grossman, wellness is growing at a 15 percent rate and lifestyle real estate will grow significantly with spa retail and fitness. “However, there’s global health crisis with obesity. Forty percent of the U.S. population is obese, 31 percent is overweight and diabetes has quadrupled since 1980.”
The Financo Forum panel included Eugene Remm of Rumble and Catch Restaurants, Kara Goldin of Hint Water, Michael Karsch of Juice Press and Marcia Kilgore, founder of Bliss Spa and most recently Beauty Pie.
“Brands are less important to people than ever,” opined Kilgore, who said her private label beauty products are made at the same factories where luxury beauty products are made and that she sells her products online and at cost. She makes her money by charging memberships for $10 a month or $99 a year, and that after a year in business, she has 20,000 members.
Kilgore said her biggest challenge is reeducating the consumer. “The beauty industry taught people that the more they pay, the better the product. That’s not the case that if you pay a lot, you have great effect. Quality and price are not necessarily aligned.”
Goldin said she lost 50 pounds after she gave up diet soda 14 years ago, and that she has developed a Hint skin screen formulated without oxybenzone, which she said led to pre-cancerous spots on her nose. The Hint brand of pure water is flavored with fruit.
Goldin said today’s consumer wants simplicity. “How do you get the message out without bombarding them?” with information. In the messaging and story-telling, the use of celebrities representing a brand can be risky, she suggested. “Celebrities are people too and they can fall off. The consumer has a lot of lenses today.”
Remm of Rumble and Catch spoke about how extreme experience and extreme convenience works. He said he doesn’t use data. It’s his gut that dictates his decisions. With celebrity investors such as Justin Bieber, Rihanna and Justin Timberlake, “When they invest, it’s been 100 percent authentic. They don’t care as much about a return in investment as about being part of a culture. They want to connect. They can’t connect just through a (movie or television) screen. That has its limits.”
Remm, considered a disrupter in the hospitality arena, has a portfolio of venues for dining, entertainment and recently started Rumble, a boxing-inspired group fitness class for training and conditioning. He said the biggest challenge is the skyrocketing costs of operating a restaurant. “You have to generate $30 million in revenue to make big money. But with exercise fitness, you just need a trainer, a front desk, there’s no cash interaction. Finding real estate is the biggest challenge. It’s easy to find talent for group fitness jobs because people do it because they love it.”
Typically, the Financo Forum has been tinged with provocative and occasionally heated discussions on such topics as the future of luxury goods and the relevance of department stores and malls. But this past forum, held at 583 Park Avenue, was more about education, specifically on wellness trends, and spotlighting a few disruptive and up-and-coming brands. That’s a reflection of the changed management at Financo, and this month’s retirement of Financo founder Gilbert Harrison as chairman. Harrison took a back seat at the event, compared to previous years where he proved adept at instigating some debate, but he was far from overlooked. John Berg, Financo’s ceo, recognized Harrison for his “passion” for the fashion and retail businesses and “persistence” in making M&A happen. “He loves working with entrepreneurs,” Berg said before recalling three of Harrison’s biggest and most successful deals, the acquisition of Marshalls by TJX Cos., the acquisition of Jos. A. Banks by Men’s Wearhouse and Hasbro’s purchase of Milton Bradley. Berg didn’t fail to cite Harrison’s extensive philanthropic activities, including founding the fashion division of the UJA. “He gives back so much,” Berg said.
Berg’s message to the crowd of 300 retailers, vendors, analysts and consultants was “to grow and morph and go where the consumer is going,” which is what Financo has been doing. The boutique banking firm has changed its business model, from being focused on footwear and apparel, to concentrating on the beauty business. Vennette Ho leads Financo’s beauty practice. Financo has also added healthy living, restaurants and healthcare services to its platform.
Berg’s opening remarks were followed by short presentations by James George, International Managing Partner at OC&C, a strategic consulting firm, and Strand Conover, partner at WME Entertainment, who spoke on the convergence of entertainment, media, fashion, retail and social media.
George said that OC&C contacts 50,000 consumers to rate 650 retailers globally. Among the findings of the research, 72 percent of the U.S. population used digital shopping to buy Christmas gifts, and most frequently in electronics, home and fashion.
Amazon was “consistently on top of the rankings” with consumers feeling that Amazon can be trusted and provides good service. But specifically in the U.K., Amazon’s range of product options is starting to create “a bit of confusion undermining the perception of quality,” George said.
With the Internet providing price transparency, service and quality are now number one and two, on consumers’ minds, said George. So are discounters, which he said “are gaining in consumer ratings driven by trust and value. “The single biggest driver is trust, trust delivers gains in ratings. Trust relates to consistency of quality, and perception that consumers are put ahead of shareholders.”
Also important is proximity, said George. Analysis of searches indicate that consumers are often online to find out where to find the nearest store of their choice is. In technology, George said he sees the growing important of voice command, artificial intelligence and chatbots in presenting product choices and advice to consumers.
Conover at WME spoke about the importance of storytelling — “an ancient tradition” — and the convergence of celebrities, influencers and brands. “Consumers expect their brands to have a voice,” he said. He noted that 30 percent of consumers bought something because of an influencer post. Authenticity was the top reason consumers gave for trusting influencers.