SAN FRANCISCO—With emerging products such as CBD products, specialty vitamin drip cafes and organic mattresses, consumers now have access to healthier options to create a quality of life for themselves and their families. This is leading to the development of wellness-focused smart cities, where mental balance plays an important role in managing morale and stress levels, and has elevated awareness about what we eat and where we live, according to Colliers International’s Summer 2019 Retail Spotlight Report.
Wellness services are stretching beyond the fitness industry into alternative medicine, beauty and supplements, with leading grocer and drugstore retailers expanding in-store offerings. With the abundance of wellness services and advice, the idea of a one-stop-shop for wellness is appealing to the majority of U.S. consumers. More than half (56%) have stated they would likely frequent a wellness department store. Physical space of big-box retailers is well aligned for this type of one-stop wellness concept, and now is an opportune time for mall owners to craft similar wellness experiences with tenants.
“Wellness concepts are significantly growing as people are demanding to live a sustainable and balanced lifestyle, while enjoying family, friends, travel and outdoor activities,” Anjee Solanki, national director of retail services with Colliers International, tells GlobeSt.com.
She says this longevity could very well become the new fountain of youth. The question is how can we create longevity within a healthy community?
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“The wellness initiative taps many industries from healthy snacking, fitness, apparel, beauty, mindfulness, travel, sleep and mental wellness. Supporting a holistic approach to healthcare is not a trend, it’s a part of life,” Solanki states.
Indeed, wellness, is set to become the solution to some of these issues, serving as the next mini anchor to backfill vacancies and reinvent the merchandising program. With an eye on consumer trends, landlords are favoring health and wellness businesses to deliver real-life experiences that customers cannot replicate online. Although there may be a magic mirror for fitness, personal wellness begins with being present in a physical space, according to the Colliers report.
“The wellness category is a benefit to retail real estate – simply said, the majority of these concepts requires physical space. It’s the one thing that you can’t always buy online,” Solanki tells GlobeSt.com. “Sharing stories about products and brands through social media creates additional exposure for retailers. For example, Saks Fifth Avenue’s The Wellery, wellness services and product partnership are other options to increase consumer engagement, test the product and be educated on the benefits, potentially reducing fake claims,” states Solanki.
In fact, approximately 77 million baby boomers seek to outlive prior generations, with 81% planning to spend more on health and wellness products, compared to 19.4% in general retail. The consumer market is saturated with general products and there is an increasing willingness to invest in those products and services that enhance a sense of well-being. Experiential retail once believed to be only a millennial need or desire has been adopted by consumers regardless of age. Adapting this ideology of the consumer experience is something everyone can enjoy and represents a major opportunity for wellness retailers and retail properties.
“It’s no longer a generational ‘ask’ but a heightened demand by consumers for transparency around product origination and sourcing. Boomers are living longer and the younger generations are inspired to outlive that demographic segment,” says Solanki. “Now we need the educational system to embrace the holistic approach to better serve society as a whole.”
Not the Usual Mall Suspects
Consumers traditionally frequent shopping malls that feature wellness retailers, health stores, gyms and clinics but a range of innovative services are gaining traction. Many of these wellness concepts have also reported growth in mixed-use centers with an opportunity to scale business in a more formal environment.
People are looking for alternative health solutions that allow them to bypass insurance companies and astronomical medical bills for basic services. Some self-care options popping up include a New York City napping lounge where consumers pay up to $250 a month to catch up on sleep in private pods.
And for others who are feeling run down, there are IV hydration studios that provide infusions of vitamins and electrolytes. IV treatments top 2019 wellness services, representing one-tenth of the cost of an emergency room visit. Moreover, major markets have reported an increase in meditation spaces that offer consumers quiet reflection and relaxation sessions.
“We’re starting to hear more about meditation areas within larger health clubs and shopping centers,” Solanki tells GlobeSt.com. “Spas are also incorporating the concept based on demand and dealing with stress. However, we need to be mindful that the buzz does not create a pseudoscience,” Solanki states.
Fitness centers and other health-oriented businesses within a community can help drive traffic but if they aren’t in densely populated areas where consumers congregate, a category-based cluster strategy is not likely to work. Retailers should look to consumer behavior when planning locations. Consider that consumers look to add variety into their workout routines and health-oriented concepts are doing the same. Some including Soul Cycle, Barry’s Bootcamp and F45 training are eyeing spots near high schools and colleges to establish relationships with consumers’ fitness routines from the onset.
Cannabis and CBD Spending Is on the Rise
Between 2018 and 2022, consumer spending on cannabis and CBD will grow by 129% to more than $25 billion. The cannabis plant produces several natural compounds, cannabidiol or CBD and tetrahydrocannabinol or THC among them.
CBD, a non-psychoactive compound, is extracted from the hemp plant and sold in gels, gummies, oils, supplements, extracts and other topical forms with a compound that will not produce the same high as marijuana. The new generation of cannabis users prefers these alternative consumption options, all of which are higher-margin derivatives targeted to the CBD-seeking customer base with little fear of oversupply or pricing pressure.
Views on cannabis and CBD have changed dramatically during the past 10 years. The vast majority of U.S. consumers (76.5%) are either indifferent or welcoming of medical cannabis and CBD shops in malls. However, there are still groups of consumers who object strongly and integration into public spaces will require care and consideration, according to the Colliers report.
One of the major concerns with consumers new to CBD or cannabis is about the uncertainty of how to identify trustworthy purchasing outlets and where to obtain products. This represents an immense opportunity for retailers and property owners to engage reputable and credible brands to offer formalized shops and services within portfolios.
When building a brand in an emerging retail category, it helps to have support and expertise from some of the best, brightest and seasoned retail executives in the business. Green Growth Brands, a nascent retailer in the CBD space has this type of backing and then some.
Led by Peter Horvath, its executive leadership team holds the key to securing leases based on trusted, long-standing relationships with some of the nation’s leading retail properties, specialty retailers and brands. The wealth of retail knowledge and expertise represented by Green Growth Brand’s leadership team comes from a vast experience among leading consumer brands, both domestic and international, including American Eagle Outfitters, Bath & Body Works, Calvin Klein, DSW, L Brands, L’Oréal, Luxottica, Proctor & Gamble, Tommy Hilfiger and Victoria’s Secret. Green Growth Brands’ powerhouse team has been the contributing factor to its acceleration with nearly 900 locations for the consumer: a reminder to retailers everywhere that building a solid brand starts with a dream team.
“I was surprised at the number of SKUs within Green Growth Brands CBD products! Our feature article within the report looks at Green Growth Brands. They have 10 different brands that are aligned with different audiences and different phases within your life,” Solanki tells GlobeSt.com. “The core team of Green Growth Brands are ex-retail industry experts, i.e., L Brands, L’Oréal, Victoria’s Secret, Proctor & Gamble.”
Wellness Retailers: The Perfect Balm for What’s Ailing Shopping Centers
Health and wellness retailers are providing in-demand products and services that support healthier lifestyles for everyone with convenient community-based locations and one-stop shops. Health and wellness tenants complement the move to more experiential retail offerings, and although not a full “miracle cure,” offer retail centers welcome support and vitality.
Since opening its first brick and mortar store in February 2019, Green Growth Brands has been on a strategic growth track to scale its retail concept. Partnering with the Simon Property Group and Brookfield Properties, it plans to open 100 branded shops by the end of summer 2019. Preferring indoor open-air locations in central hallways, the company leans toward “evolved malls” or ones that offer personal care services and entertainment with brand tenancies that are properly aligned to the consumer’s interest and lifestyle.
“The demise of brick and mortar locations is a myth,” Horvath says. “The top shopping centers are evolving and growing year-over-year. These are the centers we have chosen to place our Seventh Sense shops in.”
The 200 square-foot walk-in kiosks are designed with a thoughtful and intimate layout for trained associates to introduce Green Growth Brands’ line of Seventh Sense Botanical Therapy CBD products to consumers. Seventh Sense provides botanical therapy CBD-infused personal care and beauty products promoting a natural healing system inclusive across age and gender. The bath and body therapeutic line offers nearly 100 SKUs at an affordable price point.
Seventh Sense Botanical Therapy is the first Green Growth Brands to launch in the market and there are plans to expand its consumer offering later this year. Its mission is to provide CBD products that are consumer demographic neutral, focused on the emotional connections driving individual consumption. For instance, Green Lily, which will premiere in stores this fall, appeals to women at each life stage.
“Green Growth Brands continues to explore new products to launch, tailored to specific demographics; mental wellness and that appeals to women as well as men,” Solanki tells GlobeSt.com. “They’ve segmented their products and with more than 100 SKUs, at least one of their products will appeal to someone.”
As of late, Green Growth Brand’s CBD products were available in 41 states, across tier 1 American shopping malls, e-commerce sites and wholesale partnerships. Its recently inked distribution deals are with specialty retailers such as Abercrombie & Fitch, American Eagle and DSW.
In addition to the CBD retail segment, Green Growth Brands also manages a network of cannabis dispensaries. Its recent partnership with Moxie, a marijuana extract producer and distributor, aims to expand Green Growth Brands’ operations coast to coast, solidifying it as a major player in the cannabis category. With this level of national coverage, it appears Green Growth Brands may be preparing itself for the holiday shopping season. As for the future, Green Growth Brand is riding the waves of its self-created momentum, monitoring consumer engagement and the demand of return customers, potentially for a subscription model.
What Does the Future Hold for Overall Wellness?
Solanki says companies such as PepsiCo, Kellogg’s and Campbell’s will jump on the bandwagon to invest more in healthy snacking and develop organic beauty products. This innovation will lead to more M&A activity, “well-known corporations are acquiring smaller companies in this space to scale quickly,” she says.
“Wellness is not going to disappear but rather grow and expand in different verticals and specialization,” Solanki tells GlobeSt.com. “We look forward to the continued positive shift towards self-care coupled with a healthier lifestyle.”