The word “health” means different things to different people, depending on their needs, demographics, and lifestyle. It includes dietary restrictions, either by choice or necessity and it includes lifestyle choices like veganism and vegetarianism. But regardless of the number of definitions that apply, for retailers, health means opportunity, growth, and retention among the growing population of health conscious consumers in Europe.
Currently, traditional grocery retailers are only seeing £1 for every £7 spent on organic food and beverages in the UK and with the global market set to grow to $320.5 billion by 2025, retailers need to get themselves fit and healthy to ensure that they capitalize on this growing sector.
Getting a bigger slice of the health pie
To increase the slice from £1 for every £7, retailers need to begin by understanding the health-conscious customer. They’re different. They spend more, they shop more frequently and they’re fickle. The health drive is a journey for them which begins very positively with their preferred grocery retailer – this sees their engagement increase. They then learn a little more about healthy-living and they start to look for more specialty products and when their preferred grocery retailer doesn’t provide those, they go elsewhere. Then gradually, over-time, their engagement with the retailer decreases and they spend £6 for every £7 elsewhere.
Creating a health strategy
A strategy for the health market is not just a strategy for growth and survival but it also needs to be a retention strategy to ensure that the maximum spend is retained. Understanding the health-conscious customer is key – by their very nature, they’re knowledgeable – they invest time in researching products, they care about traceability, ethics, and sustainability. But understanding their weekly customer transactions and evaluating the overall nutritional content of food purchases is the level of information that is needed to build a sustainable strategy – data-driven customer insights is the way to do this.
Some of the initiatives already in place by leading retailers are setting the standard. As an example, REWE have increased their share of sustainable products and services, and they’re offering them at attractive prices and sourcing them from developing and emerging markets. They are also working to prevent overfishing and by working with animal rights organizations and suppliers they’re improving standards in the supply chain and product offering. This is just one way to build loyalty with the health-conscious customer, but there are other initiatives that will also help to increase the share of the health-conscious wallet.
Please read my viewpoint paper, Health-Conscious Retail: Challenges and opportunities with evolving customer health and wellness needs.