As consumers choose to grow their “wealth” through experiences over material goods, healthy living might become the new form of luxury.
“People are treating themselves, their mind and body, through more and better things. Luxury doesn’t have to be expensive. It’s more about the richness of the experience than the cost of the experience,” said John Berg, chief executive officer of investment banking firm Financo Inc.
Berg also believes that the consumers’ need for engagement through experiences is more than just a passing fancy. “Things come and go. Trends get hot; trends die. There is an ebb and flow. I think because this is partly generational — the raw numbers in the up-and-coming generations are so large — that this shift [in mind-set] is pretty profound,” the banker said.
Because healthy living is a philosophical movement, Berg opines that it “literally transcends every product category and experience everyone could have. I don’t care what category you are in. People will be bringing more of an angle of health and wellness into their business some way, somehow. It will matter more and more, whether next year or over the next five years.”
That thinking led to the theme for Financo’s 28th annual CEO Forum slated for Monday. The event, at 583 Park Avenue, will feature a panel of leaders in the wellness industry. Mindy Grossman, chief executive officer of Weight Watchers, is set to moderate the panel discussion. Other panelists include: Eugene Remm, Rumble and Catch Restaurants; Kara Goldin, Hint Water; Michael Karsch, Juice Press and Marcia Kilgore, founder of Bliss Spa and most recently Beauty Pie. James George, international managing partner at OC&C Strategy Consultants will provide a short presentation. In addition, Strand Conover, a partner at WME Entertainment, is slated to make a presentation on the convergence of entertainment, media, fashion, retail and social media.
The banker believes 2018 will be a good year for consumer spending as the tax cuts will “put more money in people’s hands.”
But while true luxury firms will likely see healthy spending, Berg doesn’t believe the growth rates will be anywhere close to where they were a few years ago. That’s due to a “confluence of events” that include the discovery of other experiential opportunities. Beauty will continue to be strong as younger generations focus more on self-care.
The not-so-good news is that there will be less spending on apparel and footwear overall. Financo’s practice was initially focused solely on retail and apparel. Over the last few years those sectors comprise just 20 percent of the investment banking firm’s focus. However, retail is still a big component of what Financo does.
“There’s always been an interplay of different channels of distribution. It’s critical for companies to reach their customers however they want to be reached in the best way possible. Brick-and-mortar is not going away, but there will be more and better experiences and companies will have to find other ways to drive traffic to their stores,” Berg concluded.
Monday’s program is expected to touch upon the effect of healthy living in the retail space.