Healthier profitability for the wellbeing market
Opportunity knocks in the UK health and beauty sector
The wellbeing market, also commonly referred to as the health and beauty sector or the health and wellness industry, is buoyant. This reflects the global trend for wellness and it covers a considerable range of products and services.
The industry encompasses the many activities which promote physical and mental wellbeing: from yoga to healthy eating, personal care and beauty, nutrition and weight-loss, meditation, spa retreats, workplace wellness and wellness tourism.
Drilling down into these broad definitional areas we can identify diverse groups of products and services, such as yoga mats and vitamins, hair and beauty treatments, and cosmetic surgery. It can also extend to gym and sports club memberships, cycling and treadmill fitness devices linked to online services, and to homoeopathy and alternative therapies.
Building on its research from 2021, in January 2022, leading US business consultancy, McKinsey, estimated the global wellness market at more than $1.5 trillion, with annual growth of 5 to 10 percent.
An increase in both consumer interest and purchasing power provides a significant opportunity as spending on personal wellness recovers after the negative impact of the Covid pandemic.
McKinsey’s research used consumer opinion to define the scope for the market and broke it down into key areas. These are health, fitness, nutrition, appearance, sleep and mindfulness.
For the UK market, McKinsey survey data revealed some noteworthy spikes within the general global trend of increasing interest. For example, market players in the UK may wish to note that health and appearance are prioritised by around 73% of the UK population.
In order to maximise market returns, this might suggest that these are areas to concentrate on. However, it may also identify the remaining areas of fitness, nutrition, sleep and mindfulness as ones that may represent the best growth opportunities for new and innovative products and services.
Embedding finance into a wellbeing online store or marketplace.
The affluence of many consumers that currently use or that may harbour aspirations to purchase wellbeing products and services would suggest that affordability is not an issue. However, the ability to spread payments and turn single large payments into more manageable instalments is highly desirable.
This makes wellbeing more affordable to those that may not be particularly wealthy, not through reducing prices, but by simply allowing payment to be spread over a set of payments.
The growing popularity of BNPL offered at the checkout of online stores and marketplaces has shown that conventional lines of credit, such as credit cards and loans, are something of an evolutionary dead-end when it comes to consumer credit.
However, BNPL is not always necessarily the best way of offering embedded finance to your customers. Some businesses may prefer a slightly different format, such as offering a credit agreement that makes a charge for providing credit.
Businesses may also prefer to use their own capital to provide the financing. This allows them to retain more of the profit from each sale than would otherwise be obtained when using a third party financial institution, such as a bank, or one of the dedicated BNPL service providers that have emerged during the last twenty years or so.
The best types of embedded finance that you can use within your webstore or marketplace often provide much greater flexibility and control while delivering better value and a richer feature set.
Take a look at how Synapi is helping the wellbeing market to thrive
Synapi’s platform lets you provide BNPL or alternative types of consumer financing and uses a rich feature set that gives you advantages such as:
Flexible loan terms - Consumers can choose to pay in 3-, 6-, 9-, or 12-month instalments.
White-label solution - Brand the loan application customer journey to your requirements.
Flexible loan repayment - As customers often must book their treatment weeks in advance, this functionality ensures that customers are only charged interest from the day they receive the treatment.
A great example of how Synapi is helping the wellbeing market to thrive is the Faces Consent digital booking system that serves as a marketplace to an ecosystem of 30,000 users, including aestheticians, salons, prescribers, insurance companies, suppliers, and training institutes.