For Americans, Wellness Goes Beyond Healthcare (And Unmet Needs Abound)
What market segments spring to mind when you consider the market for wellness?
To answer this question, let’s explore a constellation of market segmentation examples from three different wellness frameworks. It’s intriguing to see what is included in wellness and how American behaviors compare to wellness ideals.
Wellness Market Segmentation Example #1:
University of Pennsylvania Wellness
The University of Pennsylvania’s Chief Wellness Officer, Dr. Benoit Dube, defines eight segments of wellness:
- Physical
- Emotional
- Social
- Intellectual
- Environmental
- Financial
- Occupational
- Spiritual
Each of these segments is defined with multiple aspects supporting it. Moreover, the eight segments come together to create an overall wellness vision:
“To achieve the successful integration of competing demands that results in a state of flow.”
The Penn Wellness definition of Physical Wellness is:
“choosing things that make our body feel good – like regular exercise, proper nutrition, healthy sexual relationships, and trimming down on the things that bring us down, such as stress and inadequate sleep.”
Exploring the major facets of physical wellness reveals distinct marketplaces in each, many with unique devices and apps.
The first part of physical wellness is exercise. It’s an interesting market segmentation example, because it’s abundantly clear that most are not exercising enough. Nearly a quarter of American adults are reported to be “inactive,” defined as no physical activity or exercise other than their regular job. This varies by state. Colorado is the “healthiest,” with 17% of adults inactive to Alabama as “the least healthy,” with 32% inactive.
One study generously estimated an average of 32 minutes of exercise per American per day, despite the inactive portion of the population. Meanwhile, the definition of “exercise,” with remote work’s lack of commutes, has been dummied down to include standing.
Recognizing this gap and the market opportunity that fitness represents, there are a bevy of fitness devices and apps from well-regarded brands in the market, such as Fitbit and Garmin as well as the Apple Watch and the Samsung Galaxy Watch.
Sleep is another wellness market segmentation example. When it comes to sleep, Americans clock in an estimated 6.8 to 7.2 hours of sleep daily. CDC guidelines call for 7 or more hours per night of sleep for adults ages 18 to 60 and emphasize “good quality sleep.” While the average American is getting the required sleep, many are not. An estimated 84 million Americans don’t get the needed sleep, and between 50 to 70 million have sleep disorders.
Most of the fitness trackers provide information on sleep, and there are also several sleep monitoring devices, including Oura Ring, Whoop, Biostrap and Kokoon nightbuds. There are also specialty brands, such as Owlet for the infant market.
Proper nutrition is an aspirational market segmentation example, with at least 50% of consumers saying healthy eating is a priority, but many falling short of the mark. One study found that 46% of American adults have a poor-quality diet, while others estimate as high as 90%. Obstacles to proper nutrition include the high cost of healthy food, time, and cost, along with the real commitment and skill to prepare or choose healthy meals. While it may be disturbing, previous studies found only half of moms of children ages 0 to 12 are motivated to provide their kids with a healthy diet.
To address the consumers who are interested in improving their nutrition, there are a plethora of apps that receive good reviews, including:
- MyFitnessPal: “best nutrition tracking and fitness app”
- Noom: “best for weight loss”
- WW: “best nutrition app with meal plans”
More general wearables and apps like Fitbit and the Apple Watch include additional apps and features to track nutrition, such as logging water and food as well as weight.
Reducing stress to a healthy level is another part of the physical health wellness definition and an additional market segmentation example. 2023 research by Insight to Action finds that as many as 44% of adult Americans believe they suffer from stress as a health condition, and 54% suffer from anxiety or depression. This compares with 20% with a sleep disorder, 15% with a GI or digestive problem, and 31% who are tired or lack energy.
The Penn Wellness definition points out the positive side of stress, i.e., “stress is inevitable and can lead to opportunities for growth.” Still, 44% believe stress is impacting their health.
Most are seeking stress reduction, and stress reduction apps include:
Similarly, it’s easy to log stress levels and meditation on Fitbit and Apple Watch.
Occupational Wellness is a less frequently identified market segmentation example. It is defined by Penn Wellness as:
“our ability to achieve work-life balance, do work that is motivating and interesting, and achieve a sense of personal satisfaction in the workplace.“
With full-time working Americans averaging 8.5 hours daily working, out of 15.4 hours awake, time at work has a dominant impact on their overall wellness. Including occupational wellness makes a lot of sense. For full-time workers, this is 55% of their waking hours. Recent data suggests that weekend work is increasing, and for some, required in order to achieve life balance during the week.
Throughout my life, work colleagues both within my company, and at other organizations that I’ve had the privilege to work with, have become friends. With a common goal and shared experiences, the time we spend at work is more fulfilling. For me, time at work has contributed meaningfully to social wellness.
Social Wellness is described by Penn Wellness as:
“our ability to build healthy and supportive relationships, foster genuine connections, and offer support to others during difficult times.”
The two domains of occupational wellness and social wellness can come together in the workplace. In fact, Gallup finds that having best friends at work is important to engagement. They assert:
“Best friends at work drive outcomes because they’re more than a social connection or good relationship. A best friend at work is someone you can rely on through thick and thin. Someone who has your back and genuinely cares. These authentic friendships deepen employees’ sense of ownership for their work and enable employees to be more effective and sustainable, regardless of where or when they work.”
Today, I’m fortunate to regularly work with colleagues I consider friends who I’ve known from two to thirty years. I find these relationships healthy and supportive and enjoy reconnecting and talking through both personal and work-related questions and experiences with these friends.
I look forward to seeing these occupational friends in person and going on getaway vacations together. Since we don’t work together in the same office, we are choosing to spend time together outside of work hours.
Several friends from Booz Allen, Wharton and the Cambridge Group along with Insight to Action colleagues get together for annual mini vacation as well as regular Zoom calls. The Vistage CE chief executive group gets together socially on a monthly basis and also takes a retreat annually.
Financial health and wellness is a topic that is commonly identified in the context of budgeting and financial planning, but not as commonly as a part of a broader wellness definition. It makes for a somewhat unexpected market segmentation example. The Penn Wellness definition is:
“Financial Wellness encourages balancing our perspectives about money and budgets, productive ways to handle stress related to finances, and practical techniques to manage, earn, spend, and save money.“
Another illustration of how the wellness domains interact is the finding that financial worries are significantly associated with higher psychological distress. There are a number of well-reviewed budgeting apps to help address financial wellness, such as Mint, YNAB and Simplifi.
Wellness Market Segmentation Example #2:
McKinsey Wellness Study
The second wellness market segmentation framework comes from McKinsey, who valued the wellness market at $1.5 trillion globally, growing at a healthy 10 to 15% annually.
Their survey of over 7,500 consumers identified six wellness market segments:
- Better health (extends beyond medicine and supplements to include medical devices, tele-medicine and remote healthcare services, as well as personal trackers)
- Better fitness
- Better nutrition (part of wellness, now consumers want food to help them accomplish their wellness goals in addition to tasting good)
- Better appearance (primarily wellness-oriented apparel “athleisure” and beauty products like skincare and collagen supplements)
- Better sleep (sleep medication, melatonin, app-enhanced sleep trackers, other sleep-enhancing products)
- Better mindfulness (meditation focused apps and meditation-oriented offerings)
McKinsey identifies the top wellness spending category is health, at 50.1% of American’s reported spending. This category is more than double the size of the number two category of appearance at 20.1%. Fitness ranks third at 13.8% of spending, followed by nutrition at 9.2%, mindfulness at 6.3% and sleep at just 0.6%.
When asked about importance, Insight to Action research finds that 50% of Americans consider the McKinsey wellness market segments are important. Shown below, with some additional aspects, the tiers of stated importance among American adults are:
- Top tier: 70%+: physical health, mental health, sleep
- Second tier: 60%: managing stress, fitness, nutrition
- Third tier: 50%+: mindfulness, appearance
- Fourth tier: 40%+: relationships and social connections
Comparing the Penn Wellness definition to the McKinsey definition, there are both differences and similarities.
Both frameworks include physical health, fitness, nutrition, sleep and mindfulness.
Penn’s definition of spiritual wellness overlaps with McKinsey’s mindfulness in the area of meditation, but it is broader.
The Penn definition of Spiritual Wellness is:
“promotes living a life that reflects our deepest values and beliefs by finding meaning in life events, developing individual purpose, and creating time for spiritual practices, like meditation, journaling, and prayer or personal reflection.”
The McKinsey framework identifies appearance as a wellness market segmentation example, capturing 20% of consumer spending in wellness. This is supported by the fact that 50% of Americans believe better appearance is important. The massive $344B US apparel, beauty and personal care ($91B), hair salons ($50B), $5B from barbers and $70B+ cosmetic surgery industries demonstrate the appearance market segment is a high priority.
And, like other markets, there are apps. For instance, the Beauty filter apps help with the goal of taking our best selfie, including:
- YouCam Makeup
- Beauty Plus
- Camera360
By comparison, Penn Wellness is generally the broader framework, as it includes social, intellectual, environmental, financial, and occupational.
Comparing the stated importance to the stated difficulty (see chart), sleep emerges as both highly important and difficult for many Americans. Other market segmentation examples that are quite important and moderately difficult are fitness, nutrition and managing stress. Though important, most find appearance, mindfulness and relationships relatively less difficult. Since none of these market segments were considered unimportant, the bottom row is blank. A different approach to this assessment would be to look at stated importance compared with derived importance.
Wellness Market Segmentation Example #3:
Consumer Interviews
At Insight to Action, we recently questioned over thirty working consumers across the country about their overall priorities and challenges in their daily weekday routines as well as on weekends. In the conversation, they also shared how they think about taking care of themselves and achieving wellness.
Many of the themes from the McKinsey and Penn Wellness models came through loud and clear as priorities for their daily lives. We’ve abstracted these findings to protect client proprietary information.
- Family and relationships (e.g., providing for family, relationships with kids, partner and other relatives, friends)
- Time for self
- Physical health (the ability to participate fully in life both today and in the future)
- Mental health and well-being
- Exercise and fitness (often to reduce anxiety and maintain energy)
- Appearance (e.g., having a revenge bod after a breakup)
- Career and occupation (e.g., balancing work-life to achieve in career without working excess hours and becoming stressed)
- Financial (e.g., wealth accumulation, reaching goals)
- Hobbies and interests (e.g., traveling, crafts)
- Nutrition (often eating better during the week and less well on weekends)
While it’s likely implicit in the physical health definition of wellness, these consumers are very interested in remaining active and physically capable for as long as possible.
Timewise, a significant impact on Americans’ wellness is seven hours a day of screen time. While screen time can be relaxing or productive, some consumers are spending multiple hours a day on social media and believe that this is contributing to anxiety.
These three frameworks and their market segmentation examples show varied and surprising aspects of wellness identified by American consumers. Opportunities for brands to help solve problems abound, even though there are already many products, apps and programs from which to choose.
For additional market segmentation examples, learn about the first-time parents market or the plant-based beverage market. Explore more approaches at the Customer Segmentation Resource page and the Market Segmentation Resource page. Or, join us at an upcoming office hours.
