The coronavirus pandemic has radically reshaped consumer attitudes towards health and wellness. Three trends are likely to be long-term ones: a focus on better self-care, mental health and happiness, and convenience.
This provides substantial opportunities for consumer healthcare companies, but they will need to adapt to generate competitive edge in the ‘new normal’ post-pandemic.
There are four critical actions companies must consider: (1) greater customer education, (2) a review of their product portfolio, (3) reconsideration of their channel strategy and (4) more sophisticated marketing.
The winners in the new era will be taking a fresh look at their strategy and innovating now.
This Executive Insights from L.E.K. Consulting reviews these issues, providing a road map for consumer healthcare companies as they build for the other side of the pandemic.
The coronavirus pandemic continues to challenge at unprecedented levels across medicine, education, finance, business and society at large. It has radically reshaped consumer attitudes and behaviours towards work, travel, socialising and, of course, health and wellness. Some healthcare trends may dissipate once the worst of the crisis is finally over, but others will likely persist for the long term, fuelling a new era of top- and bottom-line growth for consumer healthcare companies and brands in the ‘new normal’. In this paper, we examine three of these trends: (1) superior self-care, (2) mental health and happiness, and (3) consumer convenience. We argue that consumer healthcare companies must take action now to capitalise on these dynamics, including better educating consumers, reviewing product portfolios, rethinking channel strategies and enhancing marketing capabilities. Doing this will build competitive advantage for the post-pandemic era.
Trend 1: Superior self-care
With many healthcare systems already buckling under the strain of ageing populations and increasingly costly innovative medicines, an emphasis on disease prevention and health self-management was well under way prior to the pandemic. However, there is growing evidence that COVID-19 has accelerated the self-care trend, defined by the World Health Organization (WHO) as ‘the ability of individuals, families and communities to promote health, prevent disease, maintain health, and cope with illness and disability with or without the support of a healthcare provider’. One survey carried out in the summer of 2020 across Germany, Italy, Spain and the UK showed that 65% of people are now more likely to consider their health in day-to-day decision-making, and up to 80% would do self-care to relieve pressure on burdened healthcare systems.
Significantly more consumers being health conscious has several implications for the self-care sector. Firstly, we are likely to see a continued appetite for education on health-related matters from a population with relatively low starting levels of health awareness. This could come from online sources, or more likely from pharmacists because of their perceived trustworthiness. Consumer health companies have an increased role to play too in delivering brand-agnostic disease management education and communicating about the use of their own brands. However, to avoid consumers suffering information overload or, worse, confusion and misinformation about their condition, companies should become more joined-up with government agencies, pharmacists and other industry players — coordination on COVID-19 infection control could be better.
Secondly, we can expect to see continued growth in nutritional sub-segments such as vitamins and dietary supplements (VDS), especially those for the immune system. According to a 2020 Euromonitor survey, a significant proportion of respondents now claim to take VDS specifically to promote immune-system health (rather than for beauty, skin health or relaxation purposes). It is also likely that overall sales of over-the-counter products will continue to rise. Many Europeans intend to replenish their medicine cabinets with over-the-counter (OTC) medicines as a direct result of the pandemic.
Thirdly, multiple studies have identified being overweight or obese as a risk factor for increased morbidity or mortality from COVID-19. Consequently, interest in weight management and personal fitness from governments and consumers has increased markedly in recent months. In the UK, for example, a new ‘obesity strategy’ was unveiled in July 2020 to urge people to ‘lose weight and beat coronavirus’. Simultaneously, consumer interest in physical fitness and weight management has increased appreciably. Engagement with fitness equipment (e.g. weights, fitness mats) tripled in the UK during the pandemic; fitness apparel and running shoes sales increased by up to 40%. A further notable trend has been the rise in online fitness activity as gyms closed during lock-downs and the need to self-isolate intensified. One study found an almost twentyfold increase in YouTube home workout viewership.
Use of innovative weight management apps such as Noom, with its personalised offering including meal planning, calorie counting and 1-to-1 healthcare coaching sessions, has also increased. We anticipate that although behavioural change is sometimes hard to achieve, the impact of COVID-19 makes it likely that new consumer habits will last post-pandemic. Health and fitness companies will have to update their product proposition to meet customers’ fitness needs of anytime and anywhere.
Finally, superior self-care has also driven consumers’ increased acceptance of at-home diagnostics. The US Food and Drug Administration’s emergency use authorisation for Abbott’s BinaxNOW rapid COVID-19 test provided particular impetus in the US, as it is the size of a credit card and easy to use, requiring no instrumentation. According to one survey, up to 50% of respondents are now comfortable using at-home diagnostics, including genetic tests to identify future health risks, those for blood ‘wellness’ and infection diagnosis, and a kit for mailing stool samples to identify correct personalised nutritional choices. We expect this trend to boost use of other at-home tests such as direct-to-consumer DNA tests like 23andme.
Trend 2: Mental health and happiness
Whilst the primary focus of the pandemic has been the physical illness caused by COVID-19, there is now greater attention on the mental health aspects of coronavirus, whether as a result of ‘long Covid’, prolonged social isolation and loneliness, or financial insecurity amid a worsening economic outlook. Deteriorating mental health has been evidenced in several recent studies. One noted that three quarters of respondents in the US are experiencing distress related to COVID-19, and over 50% feel anxious and/or depressed. In another, internet users were more concerned about COVID-19’s effect on their mental health (31%) than their access to a vaccine (29%). Finally, data from Google Trends shows significant increases in searches related to anxiety and panic attacks.
There has been an unprecedented level of interest in mental health from governments and other payers, non-profits, workplaces, and the private sector. Multiple organisations have launched awareness campaigns and initiatives. The WHO, Centers for Disease Control and Prevention (CDC) in the US and the National Health Service (NHS) in the UK, amongst others, have all published guidance to help tackle a feared epidemic of mental illness caused by the pandemic. Consumer goods brands have promoted mental health resources and normalising mental health conversations on social media platforms to reach their target consumers.
Mental well-being via over-the-counter products with a ‘stress relief’ or ‘calming’ claim is being targeted in the VDS market both by larger mainstream players and smaller, premium brands. Nature’s Bounty launched ‘Anxiety and Stress Relief’, containing L-theanine to ‘support the brain’s mood centre and promote a calm state of mind’, and ashwagandha, an ingredient which is claimed to support a healthy response to occasional stress and anxiety. Other examples include De-stress + Sleep by ZzzQuil, which uses melatonin and ashwagandha to ‘manage stress and calm the mind’, and emerging and more expensive premium brands Olly’s Goodbye Stress and Hum Nutrition’s Big Chill.
Management of mental health continues to face a scarcity of in-person psychological and psychiatric resources, but consumers and patients may now benefit from innovative healthcare delivery models. An impressive initiative is a pilot in the US between the National Council for Behavioral Health, the American Pharmacists Association and Walgreens to train the pharmacy’s staff in mental health first aid. The project aims to improve overall mental health outcomes and will extend the role of the pharmacist as healthcare professional into a new dimension.
New technologies and digital applications will also continue to help improve mental health. Smartphone apps such as Moodbeam, which tracks mental health outcomes, are now readily available, as are online peer-to-peer platforms allowing sufferers to connect and receive support. Chatbots such as Woebot and Ellie are virtual counsellors that can analyse voice, facial expressions and non-verbal communication cues to help reduce symptoms of mental illness. Other digital therapeutics for mental health involve evidence-based, software-led interventions to prevent and manage conditions. Unlike most wellness apps, digital therapeutics undergo an R&D path similar to that of drug development, with tools evaluated in clinical studies and prescribed by a physician. Whilst adoption has been slow due to a shortage of specialist doctors, we envisage that the pandemic may act as the catapult needed for these interventions to be made more widely available.
Trend 3: Consumer convenience
The coronavirus pandemic has forced a radical rethink for consumers (and healthcare professionals) about where and how care is best delivered. As hospitals and primary care facilities (whether general practitioner surgeries or office-based clinics) were considered infection hotspots and constantly threatened with being overwhelmed, many patients did not go to them. They either could not be treated for their ailment because COVID-19 sapped all resources available, or they sought help elsewhere that they felt was safer or at least more convenient, often through telemedicine or a pharmacy.
Telemedicine is defined by the WHO as ‘the delivery of health care services … using information and communication technologies for the exchange of valid information for diagnosis, treatment and prevention of disease and injuries, research and evaluation, and for the continuing education of health care providers, all in the interests of advancing the health of individuals and their communities’. The advantages of telemedicine for patients are clear: the evidence suggests it is convenient, cheap, saves time, reduces spread of disease, promotes easy follow-up and ultimately reaches more patients. It is not surprising that adoption rates increased dramatically, almost overnight (see Figure 2). In 2019 just 11% of US consumers used telemedicine, but this increased to 46% by 2020. Providers in the United States are seeing between 50 and 175 times the number of patients using telemedicine than before the pandemic took hold.
Telehealth convenience trends do not even necessarily have to involve human interaction. Artificial intelligence (AI) powered chatbots are on the rise for multiple reasons: they ensure 24/7 availability, reduce human errors, respond to commonly asked questions, and direct customers to relevant services, products and people.
Pharmacies provide another more convenient route to access healthcare products and services. Their position in the healthcare ecosystem is continuing to be elevated, in large part because they are the most widely distributed and therefore potentially accessible healthcare facility. In Europe there are 160,000 community pharmacies, and upwards of 46 million people visit one every day. Recent surveys have shown that almost half of individuals now plan on asking pharmacists for advice more often when dealing with minor day-to-day problems. Pharmacies could also increasingly perform and interpret point-of-care diagnostics and, depending on country-level regulations, play a significant role in the COVID-19 mass vaccination plans.
There has also been an acceleration in the move to online pharmacies such as Pharmacy2U, the largest online pharmacy in the UK, driven in particular by self-isolating consumers turning to e-commerce for ease of access. Other advantages of online include home delivery, broader product choice, potentially lower prices as a result of reduced overheads associated with physical premises, and the alleviation of pressure from pharmacy stores. We expect that the pandemic will accelerate use of online pharmacies as first-time users during the pandemic transition to become repeat customers.
Adapting to the ‘new normal’ in consumer healthcare
COVID-19 has transformed some consumer healthcare needs and behaviours. To succeed in the ‘new normal’, B2C healthcare companies will have to rethink the ways they engage their consumers, and market their products and services directly and via healthcare practitioner channels. We think the following four actions are critical:
- Educate consumers – The pandemic has increased consumers’ desire to take control of their health. They continue to seek reliable information sources to make better and more informed decisions. Consumer healthcare companies could educate their customers more effectively, both in disease awareness and management, as well as about their own brands. They could improve their education sessions with pharmacists and enhance their social media and other digital channels for end consumers.
- Review product portfolio – Consumer healthcare companies should review portfolios for products and services that will serve the near- and medium-term zeitgeist. These include prevention-focused products such as immune-related VDS or categories that alleviate the anxiety and stress-related effects of the crisis that are likely to persist economically even when the pandemic is under control.
- Rethink channel strategy – Given its enormous impact on our daily lives, the pandemic has brought into sharp focus the way consumers access products and services. The rise of remote (digital) healthcare delivery and the increasing reliance on primary care settings outside of a typical doctor’s office (e.g. pharmacies) are two important examples. Given the normalisation of e-commerce that has accelerated through the pandemic, we are likely to see this trend translate into consumer healthcare generally, and possibly into OTC products, too, where levels of online purchasing are still less than 5% of total sales. Companies should build online capability to meet the greater demands of customers.
- Enhance marketing capabilities – Better digital marketing skills and multi-channel communications will be required to attract, engage and drive loyalty from both B2B and B2C audiences. The competitive advantage prize is substantial given the plethora of digital channels now available and the pre-existing challenges in capturing significant share of voice.
The winners will be those companies that take a fresh look at their strategy and innovate now, rather than waiting until the worst of the pandemic is over. In one survey, 40% of business executives highlighted changes in consumer behaviours as their greatest priority post-pandemic. We think that is a low proportion.
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