Trading Privacy for Personalization
A recent McKinsey on Consumer and Retail podcast episode featured three leaders of McKinsey’s recent research on the global wellness industry. They discussed the wellness offerings consumers are most fascinated by, recent changes in consumer behavior and preferences, and how companies can leverage this information.
The survey was conducted on 7’500 consumers in six countries. The global consumer health and wellness market is a $1.5-trillion market growing at about 5-10% per year. According to the survey, consumers across the globe are growing increasingly willing to spend more money on self-care products and services. The survey analyzed wellness in six dimensions: health (explicitly defined as vitamins, OTC products, some cleaning products, and other consumer healthcare products and services), wellness-oriented nutrition, fitness, sleep, mindfulness, and wellness-oriented appearance.
One of the most significant findings in the study was the surprisingly vast shift towards personalization amongst consumers. Across the globe, consumers are increasingly willing to exchange their data for personalized treatments in all six dimensions analyzed. It was recommended that global companies analyze and recognize the significant differences in consumers’ willingness to share data and what is necessary to make the products effective. The personalization strategy should respond to each market’s unique consumer needs. For example, in the US, consumers don’t necessarily want individualized wellness products so much as they desire mass customization. China was the country surveyed that displayed the most willingness amongst consumers to trade privacy for personalization.
Another critical component is scalability, which relates directly to price. Personalization has grown in popularity amongst start-ups and small businesses, but not quite so much with the big consumer health companies yet. The solution comes down to scaling personalization and creating a balance. For example, instead of creating one-to-one products, it is recommended to adopt clusters of subsegments of consumers, such as a product line intended only for women between the ages of 20 and 25.
The Influence of Influencers in the Global Wellness Market
To read more information about the survey findings or to listen to the podcast, go to McKinsey.com:
“Influencers are becoming more and more critical across categories in the wellness space. This is a new muscle that we find a lot of our clients just don’t have as much experience exercising and leveraging in a way that is cost-effective and gets them the reach that they’d like. The traditional celebrity-driven model is a lot easier for bigger companies because it is a single touchpoint, a single relationship—and it’s a little bit more straightforward. This new influencer model does require a different way of engaging in marketing and driving consumer reach, so it’s something that we’ve seen companies really focusing on and thinking about.
Consumers can sniff out from a mile away an influencer who is just recommending a product because they received money from a brand to do so. We see a much more effective and mutually beneficial relationship when companies find influencers who are a natural fit with their products or services, and therefore, even if there is an economic transaction going on for that recommendation or promotion, it is still done in a way that comes across as much more genuine and authentic to consumers. It is vastly more effective from a marketing ROI perspective as well.”
From How to Thrive In The Global Wellness Market - McKinsey & Company
Photo Source: WIX
As a consumer, how much of your private data would you be willing to give up for a personalized experience?
Written by Yellow Brick Road
January 27th, 2022