Nur Asri is an Associate at
Larisa Ortiz Associates
Health and wellness is no longer
characterized by illness or disease, but to a more holistic state of being that
considers the wellbeing of one’s mind, body, and emotions. According to
Jack Ma, Chairman of China’s largest e-commerce company, Alibaba, “…today’s
customers want to be healthy and happy, no matter who they are”. As a result, they are showing an increasing
preference for products, brands, and experiences that appear to promote their
overall wellbeing.
Wellness has become one of the
world’s largest and fastest-growing industries. According to
Global Wellness Institute, the global wellness market is estimated to be worth
$3.4 trillion, three times the size of the global pharmaceutical industry. The
industries measured as part of the global wellness market included fitness and
mind-body, healthy eating, nutrition and weight loss, preventative and
personalized health, spa, beauty and anti-aging and alternative medicine – many
of which we now find downtown and along our commercial corridors.
The wired and self-reliant
Millennial is particularly dedicated to health and
wellness. The group’s
disillusionment with the current state of health care costs has apparently
pushed Millennials to behave differently when it comes to taking care of themselves.
They are relying on personal networks and wider ranges of products, services,
and providers to manage their health and wellness. Many are even tracking their
levels of activity and calorie consumption on mobile apps.
Most
importantly, they are increasingly willing to spend money and time on ‘preventative
health care’ through exercising, eating right, and conscious living. This daily
pursuit to wellness and the subsequent lifestyle changes have influenced trends
in food and drink, fitness, and fashion, and as a result, the retail tenant mix
that we are seeing in our commercial districts.
Here are
some key retail categories that are growing with Millennials’ pursuit of health
and wellness:
Apparel & Accessories
Millennials
are paying more for athletic gear or what is now more commonly known as,
athleisure wear. According
to research firm Forrester, Millennials and Gen Zers account for 69% of all
fitness wearable owners. In fact, these young consumers are wearing athletic
outfits for activities other than working out and this trend has grown rapidly with
various brand apparel retailers growing their active wear options.
Popular
athleisure retailers that are growing in urban markets with higher shares of
Millennial customers include Lululemon, Sweaty Betty, Alo and Outdoor Voices –
each with its unique brand and community of followers.
Alo has built
its brand specifically around yoga. Its product offerings are designed for
yogis and its stores offer extensive yoga class schedules. Alo has opened three
stores in urban neighborhoods in California, where the wellness and yoga
movement is particularly strong.
Outdoor Voices,
on the other hand, has built its brand as technical apparel for ‘recreation’ –
which really is all-encompassing. Anyone participating in a recreational
activity, whether it’s dog walking or yoga or a fun group sport, would easily identify
with the brand and its products. The
store has opened locations across the country – from Colorado to Texas and New
York.
Fitness
Gyms have long
been tenants in many of our downtowns and commercial districts, however, in
recent years there has been a significant growth in boutique fitness concepts. According to the International
Health, Racquet & Sportsclub Association, these types of spaces now account
for 42% of the entire health club market and they range from yoga, spinning and
boxing studios to grungy crossfit facilities. In particular, the 2016 IHRSA
Health Club Consumer Report found that Millennials preferred specialized fitness
classes like kickboxing, barre, crossfit, and yoga as opposed to Gen Xers. They
love the personalized and community experience that these boutique fitness
concepts provide and are willing to pay more than the monthly average of $33 for
these classes.
Like the
athleisure stores that have grown in numbers, boutique fitness concepts have
built strong brands and communities of followers that subscribe to distinct sets
of values.
Food and Beverage stores
As part of
their shift toward holistic health and wellness, Millennials are also
increasingly spending on healthy produce. According to the Organic Trade Association, 52% of
organic consumers are Millennials. Furthermore, Millennials eat 52% more
vegetables than their older counterparts and about 12%
of this age group claimed they are totally vegetarian back in 2011. These shares
may even be even larger today.
Grocers and
convenient stores that offer organic and locally-sourced produce such as Whole
Foods, Trader Joe’s are growing fast in urban markets and in even smaller
formats. Whole Foods opened its first 365 small store concept on the east coast
in downtown Brooklyn, where the psychographic group known as the ‘Laptops and
Lattes’ has grown rapidly in recent years. This group is essentially made up of
single, affluent and well-educated Millennials with a median age of 36.9.
Food and drinking places
Even when they’re
eating out, Millennials continue to demand responsibly-sourced,
health-conscious food and drink options. Research
shows that Millennials look for food options that are wholesome and healthy.
Organic, freshly-made, and authentic foods are all important labels to
Millennials. This has led to a strong growth in quick-service juice and salad
bars across many metropolitan cities. Sweetgreen, a fast-casual salad bar that
prides its offerings on being locally sourced and customizable, started in DC
in 2008 has since grown to 85 locations across 8 states. Again, its locations
are mostly in urban neighborhoods with strong Millennial representation.
Beauty and Personal Care Services
The final retail
tenant type that has grown in many urban markets as a result of the Millennial
shift toward holistic health and wellness is beauty and personal care services.
This includes everything from spas and salons to meditation clinics. From 2007 to 2013, the spa industry grew 58%
with a 47% increase in spa locations from 71,762 to 105,591.
The truth is
Millennials want the experience of being ‘transformed’. Even department stores
like Saks Fifth Avenue are addressing that desire by introducing wellness
service centers in their stores such as the Wellery in New York. These wellness
centers offer spas and detox treatments, and even meditat
