The Well EconomyExecutive Summary

Gyakusou collection by NikeLab, Spring 2017

The Well Economy:Executive summary

The first years of this century have yielded enormous advances in our understanding of health and wellness. As the cost of sequencing a single human genome plummets, from around $100 million in 2001 to under $1,500 today, a truly personalized approach to health seems closer than ever.

In the By Numbers section of The Well Economy, our full-length report, we use our SONAR™ proprietary research tool to look at evolving consumer attitudes toward health and wellbeing—how consumers think about health, their spending behaviors, who they trust with their health, and attitudes toward emerging health technologies.

And as research shows how our physical health is influenced by everything from exercise and mental health to gut microbiomes and personal relationships, science has given us a broader picture of what makes a healthy life.

In fact, the more we learn about health, the more it seems that health includes everything.

INTRODUCTION

Lululemon's Unroll China. Photography courtesy of Lululemon

In Lifestyle Landscapes, The Well Economy considers the growing integration of health and wellness into the lifestyle industries. Technology, retail and hospitality brands, not to mention food and beauty products, now regularly tout health and wellness benefits to differentiate themselves from their competitors.

In Healthcare Landscapes, we look at how healthcare itself is becoming more consumer-facing. Healthcare providers and services are taking design cues from hospitality, and a host of other borrowings from lifestyle industries.

In The Consumer Experience Landscape, we review how consumer expectations—for intuitive ways to communicate, on-demand services, and rapid responses to concerns—are being set by the technology industry. And finally, in Visual Landscapes, we examine visual trends in healthcare.

We hope you enjoy this free excerpt of the report. Download the full version at jwtintelligence.com.

The more we learn about health, the more it seems that health includes everything.

THE WELL ECONOMY INTRODUCTION 3

By Numbers:Sample data

The Well Economy: By Numbers

To explore consumer attitudes toward wellness, health and healthcare, in February 2017 we conducted a survey of US consumers using SONAR™, J. Walter Thompson’s proprietary research tool. The survey is representative of the general population, with a sample size of 1,007 consumers, including 250 generation Z respondents, 256 millennials, 251 generation X respondents and 250 boomers.

THE WELL ECONOMY 5BY NUMBERS

Defining health: from body to mind

Most commonly, people are likely to associate “health” with overall physical condition (77%), but nearly as many people say when they think about health, they think about mental health (75%). Even less-obvious concepts such as quality of sleep (58%) and mindfulness (43%) are still commonly associated with “health”—suggesting a broad-based, holistic view of health among consumers in general. An interesting split occurs between the responses of men and women, with women much more likely than men to consider all of the concepts listed when they think “health.”

The results of our SONAR™ survey show that people associate the idea of “health” with a broad range of concepts.

But some concepts show a wider difference than others. “Diet” shows the greatest divergence, with a 22% difference between men and women, followed by mindfulness (17%) and wellbeing (17%). Conversely, the smallest gaps occur for sexual health (8%) and energy level (11%). The results suggest that health-related concepts resonate differently with men and women, and perhaps that holistic views of health are less common among men.

THE WELL ECONOMY BY NUMBERS 6

The New Experiential Rockstars2 Lines

When I think about “health,” I think about the following…

Overall physical condition 70% 84%Avg. 77%

Wellbeing 67% 84%Avg. 76%

Mental health 69% 81%Avg. 75%

Wellness 68% 80%

Fitness 61% 76%

Being ill/sick or not ill/sick 52% 68%

Energy level 54% 65%

Quality of sleep

Diet

Mood

Sexual health

Mindfulness

None of these

Avg. 74%

Avg. 68%

Avg. 60%

Avg. 60%

50% 65%Avg. 58%

42% 64%Avg. 53%

39% 53%Avg. 46%

41% 49%Avg. 45%

35% 52%Avg. 43%

1% 3%Avg. 2%

Both genders are likely to think of these

Women are particularlylikely to think of these

Male

Female

THE WELL ECONOMY BY NUMBERS 7

New approaches to treatment

Relatively few people say they usually seek out prescription medication when they feel ill (17%). And, perhaps more importantly for pharma brands, an equal percentage say they reach for an over-the-counter medication (51%) as a non-medicinal remedy.

Our SONAR™ data hints at some sobering realities for traditional pharmaceutical companies, at least when it comes to over-the-counter medication.

These differences are more pronounced among two particularly important groups. Women prefer non-medicinal treatments (54%) to over-the-counter medications (51%), and so do millennials (59% favor alternatives to medication while 55% opt for OTC medicines). Boomers, conversely, prefer OTC medication (51%) to non-medicinal options (43%)—but brands can’t rely on them forever.

THE WELL ECONOMY BY NUMBERS 8

When I first start to feel sick/ill, I usually do the following…

Treat with a prescription medication

0%100%

10%

18%

21%

18%

15%

19%Male

Female

Gen Z

Millennials

Gen X

Bo..

Avg. 17%

Treat with an over-the-counter pain/flu/cold reliever (e.g.,Tylenol, Nyquil, Mucinex)

0%100%

51%

49%

55%

48%

51%

50%Male

Female

Gen Z (15-20)

Millennials (21-34)

Gen X (35-54)

Boomers (55+)

Avg. 51%

Treat with a supplement or “natural” remedy(e.g., ginger pills, Emergen-C)

0%100%

20%

27%

32%

26%

29%

24%Male

Female

Gen Z (15-20)

Millennials

Gen X (35-54)

Boomers

Avg. 27%

Treat with a home remedy (e.g., sauna, steam)

0%100%

26%

24%

32%

31%

32%

25%Male

Female

Gen Z (15-20)

Millennials

Gen X

Boomers

Avg. 28%

Treat with a remedy other than medication (at least one of the three non-medicinal options below and right)

0%100%

43%

48%

59%

54%

54%

48%Male

Female

Gen Z (15-20)

Millennials

Gen

Boomers

Avg. 51%

Treat with ingredients that you already own (e.g., honey, garlic)

0%100%

31%

29%

35%

27%

35%

26%Male

Female

Gen Z (15-20)

Millennials

Gen X

Boomers (55+)

Avg. 30%

Medicinal treatments Non-medicinal treatments

THE WELL ECONOMY BY NUMBERS 9

Lifestyle Landscapes: Sample sector analysis

As wellness becomes increasingly important to customers, brands—from those in retail to travel, food and beauty—are seeking to go beyond merely pushing a desirable product. Instead, they’re becoming mindful that their product or service has a positive impact on their customers’ wellbeing, too..

According to the Global Wellness Institute, a US non-profit organization, the global wellness industry grew by 10.6% from 2013 through 2015, to a total value of $3.7 trillion. The GWI predicts that this market will continue to grow, particularly in the US, noting that the wellness industry’s growth is “inversely correlated with economic and ‘human wellbeing’ downturns.”

The GWI predicts that more Americans will turn to alternative and preventative health measures, as US healthcare costs are forecast to rise by 5.8% every year until 2025.

“Wellness, from yoga and meditation to exercise, will become an even more sought-after antidote for an increasingly over-connected, chaotic world,” the GWI says.

Consumers are increasingly motivated to take charge of their own health, by taking an approach of prevention rather than cure, and businesses are poised to capitalize on this new mood. Here, we explore how key sectors are weaving aspects of health and wellness into their businesses, to align with consumers’ growing preoccupation with body and mind.

THE WELL ECONOMYTHE WELL ECONOMY 11L IFESTYLE LANDSCAPES

With wellness and health a priority at home, consumers aren’t willing to let it all go when they’re on the road, whether they’re traveling for business or pleasure.

Sportspitality

This particularly applies to the millennial cohort—travel marketing firm MMGY Global noted in a 2016 survey, cited by the New York Times, that almost half of travelers born between 1980 and 1998 say that access to a gym and exercise classes influences their choice of hotel. To respond to this, hotels and developers are not only ramping up their own fitness offers, but building entire brands and residences around the concept of wellness.

The InterContinental Hotels Group launched its Even Hotels concept, with the tagline “wellness at its core,” in 2012, and the brand is now ramping up its expansion. Alongside planning to add to its six existing Even Hotels in the US, the brand will soon venture into Australia and New Zealand, in partnership with the Pro-invest Group.

THE WELL ECONOMY L IFESTYLE LANDSCAPES 12

Even Hotels by the InterContinental Hotels Group

The hotels offer myriad wellness initiatives to draw customers, such as fitness classes, health-promoting foods and bedrooms with eucalyptus fiber bedding, intended to encourage a good night’s sleep.

Meanwhile, so impassioned is the Marriott Group’s Westin Hotels brand about its wellness credentials, that in January 2017 it launched a $30 million multimedia ad campaign called “Let’s Rise,” to promote its hotels’ health-focused initiatives. The campaign highlights wellness-related services that Westin offers, such as hiring out New Balance workout gear, and its fitness studios’ new focus on cardio, stretching and strength with a wide range of fitness equipment.

Brian Povinelli, global brand leader at Westin Hotels & Resorts, described the group as responding to “travelers realigning their priorities to put well-being first” in “today’s over-scheduled and always-on culture.”

In addition to providing wellness opportunities that fit around a busy schedule, hotel groups are also tapping into consumers’ desire to immerse themselves in a restorative environment, away from the grind of modern life. Indeed, the Global Wellness Institute found that the wellness tourism market rose 14% between 2013 and 2015, to a value of $563.2 billion in 2015. The market counted for 15.6% of global tourism revenues in the 2013 through 2015 period, the institute says.

“Wellness is relevant to everyone no matter where they live.”Deepak Chopra, wellness guru

THE WELL ECONOMY L IFESTYLE LANDSCAPES 13

Swissotel Vitality Room in collaboration with Wallpaper*

As evidence of the travel industry’s belief in future demand for these experiences, in January 2017 the Hyatt Hotels Corporation acquired Miraval Group, a wellness resort and spa brand, whose properties in Tucson, Arizona and Austin, Texas promise to help guests live a “Life in Balance.” Mark Hoplamazian, president and chief executive officer of Hyatt Hotels Corporation, commented that the acquisition would help the Hyatt brand achieve “a greater depth of expertise in wellness and mindfulness.” Meanwhile, New York real-estate developer Property Markets Group has drafted in Deepak Chopra, the wellness guru who espouses the benefits of everything

from meditation to Ayurveda, to design a development called Muse Residences in Sunny Isles, Florida, basing it on the concept of biological wellbeing. Among the apartments’ health-promoting features are circadian lighting systems, air and water purification and “mood-aligning” paint colors that emulate nature.

“Wellness is relevant to everyone no matter where they live,” Chopra told Forbes in January, speaking about the venture. “The homes we live in can have a powerful effect on our physical and emotional well-being. Our residences will be the first to be designed focusing on being preventative from this standpoint.”

THE WELL ECONOMY L IFESTYLE LANDSCAPES 14

Swissotel Vitality Room in collaboration with Wallpaper*

Healthcare Landscapes:Sample trend

Healthcare Landscapes

The nation’s primary healthcare providers too often rely on outmoded technology, lackluster marketing, and a consumer experience with too many pain points. Today, however, there’s a dynamic change underway in the healthcare industry. Pressures from both within and outside the industry are causing healthcare to become more responsive to the demands of patients. And patients are bringing in new consumer expectations fueled by their experiences of interacting with 21st-century technology and retail brands. These expectations range from on-demand information to price transparency and bespoke solutions.

As wellness becomes the new buzzword across the lifestyle industries, the only sector that hasn’t kept up with the changes is healthcare.

“The consumer of the future is more educated, more knowledgeable, more demanding,” said Michael Dowling, CEO and president of Northwell Health, at the Health Tech ’16 conference. He added that consumers will require things to be done their way—“the patient,” he explained “will say to the doctor ‘this is what I want and how I want it.’”

Even in the healthcare system, a premium experience goes a long way toward building loyalty. While providers may never compete with the allure of wellness spas or fitness festivals, the industry is taking important steps to elevate the experience. In today’s healthcare system, the “patient” is the new “consumer.”

HEALTHCARE LANDSCAPES THE WELL ECONOMY 16

The New Experiential Rockstars2 Lines

Consumer trends stand to shake up a static corner of healthcare: the pharmacy. Startups selling vitamins and supplements are already showing how lifestyle branding can reinvigorate stagnant categories, particularly as growth in health and wellness explodes.

“I went into a vitamin store and it was just overwhelming,” says Craig Elbert, co-founder of vitamin startup Care/of and a former VP of marketing at menswear company Bonobos. “It felt like the opposite of the experience that we wanted to build at Bonobos, which was something delightful. There is really some science behind this, but it gets lost in this bad consumer experience. How do we build something delightful? How do we build something that has trust?”

Care/of drew from retail lessons in ecommerce, direct-to-consumer marketing and personalization to build a new customer experience. For roughly $30 per month, Care/of delivers personalized vitamin packs with ingredients determined via algorithm.

Pharmaceutical design

THE WELL ECONOMY HEALTHCARE LANDSCAPES 1 7

Care/of

Ritual vitamins

As for its competitor, the millennial-friendly Ritual, a focus on transparency and colorful branding helps to build brand trust and awareness.

“There’s definitely a broken experience in the pharmacy of large chains, with people not getting the attention they used to get,” Elbert explains. “I’m from Des Moines, Iowa, and we had the local pharmacies where you know the pharmacist and they know your challenges. I think there is a big opportunity in pharmaceuticals in general.”

THE WELL ECONOMY HEALTHCARE LANDSCAPES 18

Care/Of

A handful of new upstarts are also taking on the pharmacy world. Launched in 2016 in New York City, Capsule is a digital-only pharmacy that delivers prescriptions on demand. And PillPack, launched in 2014, has upended daily medical treatments by shipping prescriptions in crisp packaging, with pharmacist support available via text.

As traditional healthcare providers begin to shift toward consumer-focused models, industry outsiders are racing ahead. A raft of startups is eager to bring technology-based change, improving healthcare experiences while capturing a small slice of the ever-growing market. "There’s definitely a broken

experience in the pharmacy of large chains."

Craig Elbert, co-founder of Care/of

THE WELL ECONOMY HEALTHCARE LANDSCAPES 19

The Consumer Experience Landscape:

Sample trend

The Consumer Experience Landscape

“Healthcare [in the US] is a $3-trillion industry with massive potential for innovative companies to make a positive impact,” says Kris Gale, co-founder and CTO of health insurance startup Clover Health. “In addition, consumer dissatisfaction with the dominant players has created an opening for new entrants to develop alternative approaches and gain market share.”

New players are finding ways to disrupt the consumer experience, from contacting doctors to finding insurance, at nearly every point.

HEALTHCARE LANDSCAPES THE WELL ECONOMY 21

Amino mobile app showing cost estimates

Transparency in information

Amino joins a handful of companies, including BetterDoctor and SmartDocFinder, looking to disrupt the process of selecting a treatment provider. For consumers, Amino’s online search and booking processes feel like a natural extension of online services like Yelp, Expedia or even OkCupid. “The users are clearly making the connections with these other consumer domains that they like to use to make decisions,” says Shah.

Doctors themselves are also becoming more transparent, with a small but vocal group broadcasting procedures on Snapchat and Instagram. According to Shah, it’s this transparency that will keep innovation moving forward.

“Trying to understand our market in 2013 versus what we’re looking at in 2017, there are already huge increases in the number of people using the web in the course of making care decisions,” she says. “Consumers will become more sophisticated in making these decisions.”

New technology is bringing with it radical changes in the level of transparency consumers now expect from service providers. In health, the trend is playing out in patient choice.

Amino is a new platform that helps individuals find healthcare providers by using a massive built-in database of US consumer healthcare data, including information on nearly 900,000 doctors; it offers five billion healthcare interactions to calculate consumers’ best matches.

“The underlying hypothesis was that if you had a large enough data set about what’s happening in American healthcare, you could create a transparency tool that could help consumers better make decisions about their health, whether that’s connecting them to the best doctors for their specific needs, choosing facilities, making cost-based treatment decisions or understanding treatment options,” says Maudie Shah, co-founder and head of UX at Amino.

THE WELL ECONOMY HEALTHCARE LANDSCAPES 22

Visual Landscapes:Sample visual trend

THE WELL ECONOMY 23VISUAL LANDSCAPES

New wellness standards

The new standard draws from scientific and medical research to set guidelines for any structure that advances health and wellbeing.

Architects are beginning to take cues from the WELL standard, incorporating natural materials, optimizing outdoor lighting, and providing spaces that offer comfort. The warm and friendly environments are paving the way for future design innovation in the healthcare industry.

Forget cold and clinical interiors. Thanks to the global WELL Building Standard, introduced in 2014, architects are putting societal wellbeing at the forefront of wellness building design.

“WELL fosters a holistic formula for better health and wellness outcomes, leading to improvements in things like employee productivity, engagement and retention,” comments Randy Fiser, CEO of the American Society of Interior Designers, on the WELL standard’s site.

THE WELL ECONOMY VISUAL LANDSCAPES 24

In Dublin, architecture firm Urban Agency redesigned a dental practice to offer a very different environment from the usual dental clinic. Patients enter a bright and airy space with curving walls of pale wood paneling, and the dental treatment rooms have floor-to-ceiling windows overlooking a verdant garden. The design aim is to allay potential anxiety and offer a sense of calm.

In Japan, two medical centers—the Hirano Clinic and the Asahicho Clinic—take the concept a step further, with inviting, house-shaped buildings that blend in with the surroundings and offer a familiar and home-like setting.

1 + 2. The Templeogue Dental Practice Surgery in Dublin

3 + 4. Hirano Clinic designed by TSC Architects, Japan

5. Asahicho Clinic designed by HKL Studio. Photography by Tetsu Hiraga. Japan

1

5

2

3 4

THE WELL ECONOMY VISUAL LANDSCAPES 25

Contact:Lucie GreeneWorldwide Director of the Innovation GroupJ. Walter Thompson Intelligencelucie.greene@jwt.com

EditorShepherd Laughlin, the Innovation Group

Visual editorEmma Chiu, the Innovation Group

WritersMary Cass, the Innovation GroupNina Jones

Picture assistantJaime Eisenbraun, the Innovation Group

About the Innovation GroupThe Innovation Group is J. Walter Thompson’s futurism, research and innovation unit. It charts emerging and future global trends, consumer change, and innovation patterns—translating these into insight for brands. It offers a suite of consultancy services, including bespoke research, presentations, co-branded reports and workshops. It is also active in innovation, partnering with brands to activate future trends within their framework and execute new products and concepts. It is led by Lucie Greene, Worldwide Director of the Innovation Group.

About J. Walter Thompson IntelligenceThe Innovation Group is part of J. Walter Thompson Intelligence, a platform for global research, innovation and data analytics at J. Walter Thompson Company, housing three key in-house practices: SONAR™, Analytics and the Innovation Group. SONAR™ is J. Walter Thompson’s research unit that develops and exploits new quantitative and qualitative research techniques to understand cultures, brands and consumer motivation around the world. It is led by Mark Truss, Worldwide Director of Brand Intelligence. Analytics focuses on the innovative application of data and technology to inform and inspire new marketing solutions.