I’m helping a young health & wellness brand raise capital.
The company has been inundated with so many growth opportunities that it’s taken a step back. Now the brand is raising money in an effort to meet the pent-up demand it’s faced.
This is a good problem to have. The company would never have been in this situation had it not set itself apart.
You see, the health & wellness market has become increasingly saturated.
The backdrop of all this? The rapidly growing global wellness market has reached over $3.7 trillion. And this goldmine has spurred waves of activity.
For instance, a steady stream of cafes have launched with health-oriented menus. Boutique fitness studios are opening their doors around the world, and we’re seeing more options in clean or non-toxic household and skincare products than ever before.
Wellness influencers are popping up as well, in addition to lifestyle blogs, health and beauty magazines, and social media stars working to launch their own wellness brands.
Clearly the market is hot—but that doesn’t mean it’s easy to penetrate. Let’s review a few ways brands can rise above the saturation and tap into the tremendous growth potential offered by health & wellness.
1. Have an Angle
The wellness brand I’m advising sets itself apart in a few key ways. Before I dive into its strategies, I want to emphasize that the company is not a generic wellness brand—it’s a luxury, top-tier health & wellness platform. It’s also worth noting that aside from the massive addressable market and growth potential in wellness, luxury is a $300 billion market (worth $90 billion in the U.S.).
Consumers in the health & wellness sector put a premium on health and experiences, spend less on clothing, and invest more money in products that can improve their overall well-being. As this overlaps with the luxury market, these consumers become even more willing to pay a premium on already-high-margin items.
Luxury isn’t the only angle here.
For example, many top health & wellness platforms—including my current client—enjoyed humble beginnings as newsletters. By building a base of loyal followers before expanding—just as many digital brands have done in recent years—the publications credentialize health & wellness brands, giving them a leg up as they go on to launch broader platforms.
2. Leverage Your Brand Strength & Value
The founder I’m helping is a global celebrity. She’s a successful model, has appeared on magazine covers, and served as a brand ambassador for some of the top companies in the world. Her authenticity, grit, and vision have transformed her company into a luxury brand name far faster than anticipated.
Her name lends instant credibility to the brand and its offerings. She has provided the company with a significant asset in building brand strength given her existing fan base, high profile, and strong media presence.
That isn’t to say you need to be a celebrity to make it in the health & wellness sector. However, companies like Goop and The Honest Co. would not have attained anywhere near the success they’ve enjoyed without their celebrity founders.
Meanwhile, apparel brands such as NoBull and BioSteel achieved success by cultivating ambassadors at the grassroots level. As these celebrity brand ambassadors grew more successful, the brands gained momentum and garnered stickiness among their loyal customers—most of whom wanted to emulate their favorite athletes.
But let’s go back to Goop for a moment, and continue to highlight the importance of a loyal following. The brand’s customers have helped to remedy a number of bumps in the road. When negative press stories came out about the company, Goop’s following actually reinforced the unique nature of the brand and brought the community of “Goopies” closer together.
3. Develop an Extensible Brand
The wellness & luxury company I mentioned earlier has great brand extensibility. What I mean is that it has demonstrated an ability to bring customers in for one product—nutrition, for example—and then sell them products from other categories ranging from apparel, to wellness and beauty. The company’s ability to cross-sell across products reinforces that a lasting brand is being built.
Its extensible brand has transformed the company from, say, a newsletter or online store, to a broad-based platform that can address customer needs throughout all elements of consumers’ lives. It provides products and services for travel, beauty, fitness, and more. Not only does this help from a profitable unit economics standpoint, but it also creates the perfect launch pad for future offerings.
As the company rolls out private label items in the kitchen, home, gym, and other areas—or as it moves from online products and services to real-life ones (at higher price points)—the extensibility and loyalty it has cultivated guarantee immediate adoption. This only enhances its loyal followers’ fascination.
4. Focus on Gaining a Captive Audience
My founder has a massive social media following. There’s no denying that this has helped to strengthen her platform.
In simple terms, she can quite literally see her customers discussing the brand’s offerings on various platforms—a great example of brand building in its cheapest and most effective form. It’s also among the most economical methods, with non-existent customer acquisition costs and high levels of stickiness.
The company started as a content site, similar to online retailers Goop and Glossier, which emerged from fashion and beauty blogs. These sites have built communities of loyal followers and learned from them—and then applied that knowledge to become even more responsive to customer needs and desires. This combination of content, community, and commerce represents the ideal trifecta of eCommerce and is virtually unbeatable.
It’s this level of grassroots connectivity and real-time feedback that allows my company to have its finger on the pulse of the health & wellness sector. In this vast market, connectivity is a key advantage that will ensure young brands’ success—especially as bigger companies are slow to make moves online, and newcomers are struggling to rise above the saturation.
Ultimately, health & wellness platforms will create significant value by differentiating—and then leveraging—their brands to sell direct (and to know everything there is to know about their consumers). Unique angles, as well as brand strength and extensibility, will ensure their long-term success in an industry poised for continued growth