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Will a Wellness Push End Up Well for Target?
Target is introducing more than 1,000 new wellness-related products to support shoppers’ “wellness journey without stretching their budgets.”
The items range from supplements and hydration boosters to workout apparel, skincare, and functional beverages.
“Wellness has been redefined to encompass a more holistic way of living — and it’s also different for every person,” said Rick Gomez, EVP and chief food, essentials, and beauty officer for Target. “That’s why Target is delivering like no other retailer, offering guests the ultimate destination to support their wellness journey, whether that’s enjoying a non-alcoholic beverage from Sechey or stocking up on Bloom to get their daily greens.”
Many retailers have initiatives around the broad wellness category. Beyond drug stores, grocers have particularly played up health and wellness offerings.
Beauty brands in recent years have seen a surge in demand for emerging wellness subcategories, including sleep, sexual intimacy, and ingestible beauty — edible supplements that promote skin, hair, and nail health. Last fall, Ulta expanded its The Wellness Shop installations to 1,330 of its 1,374 locations.
However, an extensive wellness positioning for a general merchandiser such as Target is rare.
In its latest “Future of Wellness” study, McKinsey estimated that the wellness market in the U.S. has reached $480 billion in the U.S., expanding 5% to 10% per year. Among U.S. consumers surveyed by McKinsey, 82% now consider wellness a top or important priority in their everyday lives, and 58% are prioritizing wellness more now than they did a year ago. Gen Z and millennial consumers were found to be purchasing more wellness products and services than older generations.
McKinsey identified seven specific areas of growth in the wellness space: women’s health, healthy aging, weight management, in-person fitness, gut health, sexual health, and sleep.
The wellness trend isn’t necessarily leading to healthier Americans, however. An Oxford University study found that workers who participate in workplace wellness, programs such as mindfulness training, on-site massages, and meditation apps, found zero benefits.
A recent Gallup poll found rates of key physical health metrics like obesity and diabetes have increased since before the pandemic. Dan Witters, the director of Gallup’s well-being research, wrote in a post, “While exercise rates have managed to remain intact, eating habits nationally have eroded substantially since 2019.”
Discussion Questions
Does Target’s positioning as the “ultimate destination” for wellness products make sense?
Do you still see more tailwinds than headwinds behind the wellness trend?
Poll
Loading …BrainTrust
Carol Spieckerman
President, Spieckerman Retail
David Naumann
Marketing Strategy Lead - Retail, Travel & Distribution, Verizon
Beauty and health was one of the few non-grocery categories to grow for Target in 2023, so it makes perfect sense to double down on this area by pushing more into wellness. Moreover, wellness growth overall continues to be phenomenal as consumers take more of an interest in various health solutions.
If Target can replicate the success in beauty – by showcasing new and innovative brands that are interesting to its audience, then it’s on to a winner. The one thing to watch is stock levels as Target still has way too many gaps on shelves in beauty and, indeed, across all categories. It really weakens the experience.
Is Target really doing anything innovative, or just trying to position their normal operations as trendy? I’d say the latter. That’s not wrong, of course – they sell a lot of different products to a lot of people , so there’s really no limit to the number of “ultimate [whatever] destination” claims they could make – but I’m reluctant to hand out much more than a particpation medal in this case. As for the trend itself: by the time most people realize something is “hot”, it has ceased to be so.
Once again, Target is following trends and responding with alacrity. Wellness is a big and growing category with many opportunities to expand. Target continues to look for ways to serve their legion of guests, and this is yet another example. The world is getting more complicated and stressful, not less. The wellness category isn’t going anywhere, but getting larger. Target is spot-on to pursue this and I suspect that the results will speak for themselves. Smart move by Target, again.
Target is already a joyous source of retail therapy. Adding affordable, cross-category wellness products will embed Target into more consumer lifestyle habits and deepen loyalty.
Wellness is an enduring consumer value. Amid a mental health crisis and political polarization in an election year, more consumers will turn to retailers for wellness, comfort and soothing self-care.
As a retailer, Target believes it will differentiate itself from others with its “wellness” initiative. Hmm, we’ll see. But call me skeptic.
New ideas, new concepts, and new offerings get retailers enthused and excited, but momentum never quite builds, or a different trend emerges. Each time, new changes occur again and again.
Target is probably the best marketer of its brand among all retailers. Their wellness program targets a certain market and demographic, but is that demographic a good match for their brand, and the markets already owned by Target? While time will tell, it seems slightly off balance, almost as much as CVS pharmacies inside the store.
Natural, homeopathic, and other alternative types of health alternatives have large market bases. Target might take some business from small health stores, supplement stores, and vitamin stores if it can build a reputation for offering that type of assortment. One stop shopping.
What I wonder most is this. In order to accomplish such a large undertaking, other parts of the store and other shelves must be reduced, or eliminated. How will that work? What will happen to the real estate presently occupied by CVS in-stores?
Even though Target’s wellness push is on-brand, it feels very late to the party. Walmart, dollar stores, and even pet retailers have been putting stakes in the ground on health and wellness for several years (we’ll see if Walgreens’ attempt to own wellness sticks in the wake of last years’ CEO ouster). Target has every right to make bold category claims, yet it faces unprecedented competition on the wellness front.
Whoever coined wellness as a category should get recognized somehow. The term makes you feel healthier before you buy anything…so I love what Target is doing here, and the messaging and repositioning opportunities are close to endless.
Now we just need people to take it seriously, since 74% of the population is overweight or obese…
Heath and wellness continues to be a trending priority for shoppers, especially the younger generations. It is a smart strategy for retailers to focus their messaging and product offerings on health and wellness. While not all products at Target are healthy, the positioning and messaging on health and wellness may make shoppers feel better while shopping at Target.
Target is building on their strengths here. They already have strong credibility in the market for wellness and value. Adding depth in assortments will allow them to grow market-share in a trending category.
Target’s breadth of product categories puts them in a great position to tell a well-rounded wellness story. And since the article points out the lack of progress we are actually making towards better wellness, then Target’s bigger value add could be in helping customers actually realize better results, versus just applying various feel good bandaids.
I’m interested to see how far Target takes this trend.
Many of us know Nicole Leinbach of Retail Minded, and have heard about STIMULATE, her latest venture.
STIMULATE is the nation’s only B2B sexual wellness trade show. It incorporates STIMULATE+ Educate to provide business education to an underserved market, and STIMULATE+ Awareness, a charity focused experience to bring awareness to causes close to the sexual wellness community.
I attended STIMULATE’s inaugural show in 2023 and was impressed with what I saw, and how elegant the show floor was. Yes, the things you are thinking about right now were there, but there were also plenty of wellness items and companies that focus on health care for both men and women.
So let’s see what Target does. Wellness products are currently displayed in various places throughout its HBC department, and that isn’t going to cut it. If Target is serious then wellness items need a dedicated department that is staffed by people who understand what they are selling.
Target’s venture into wellness could be a double-edged sword for the retailer. On one hand, tapping into the growing wellness trend could attract health-conscious consumers, diversify their product offerings, and drive sales. However, success hinges on Target’s ability to differentiate itself from competitors in the saturated wellness market and deliver genuine value to consumers beyond just product availability. If they can effectively integrate wellness into their brand identity and offer personalized, authentic experiences, Target stands a chance to thrive. Otherwise, they risk diluting their brand and falling short of consumer expectations, potentially leading to missed opportunities and diminished success.
Wellness products have always been part of Target (and Walmart, Amazon, grocery stores, etc.). The decision to broaden the line and promote it more is really the question. If there’s a tailwind, and I believe there is, then take advantage of it.
Target’s push into wellness is a good idea. However, many wellness ideas like exercise work better in a group. Individuals like to start wellness programs but quit after a short period of time because they do not like to continue on their own. In these areas, Target should develop a relationship with Apple for online programs or local fitness people to be able for their customers to enroll in group programs. While this will take more effort on Target’s part, it will keep customers returning as Target will then be more recognized by consumers as a wellness destination.
Being associated with wellness is a good brand play. It’s aspirational. So people will spend money on wanting to look and feel better. And margin on wellness related products are often higher. It’s also a differentiator in their space. And with more and more emphasis from insurance companies on the economic value of preventative self-care, I think they can ride a bit of a wave in this space for a while.