Is Alt-Health Retail’s Next Big Growth Opportunity?


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Ness may represent a legendary monster in Scotland, but it’s also waking a slumbering need in healthcare, and it’s a need retailers might want to set their alarms to.

Ness, a financial-tech company, has developed an app that issues reward points to users for healthy lifestyle choices, from working out to getting a wellness checkup. But it also aims to reduce healthcare costs to individuals. Ness ultimately plans to launch its own credit card that rewards users for healthy lifestyle choices, and add medical benefits and health insurance. 

And it’s getting attention: So far, participating brands include the fast-casual salad chain Sweetgreen and the gym Barry’s Bootcamp.

Workarounds to traditional health insurance are expanding – think GoodRx reduced-price prescriptions, discounters, such as WellCard Savings and lower-cost plans like Oscar. Retailers that become players in this industry have a good chance of boosting sales, and not only through new customers seeking less-expensive healthcare options. Here’s why.

Alternate Health Is Getting A Workout 

Tech-based wellness startups are growing beyond a cottage industry. Revenue from fitness apps alone is projected to reach $16.6 billion in 2022, according to Statista. So folding in alternatives to standard health insurance is a logical next step. 

Just consider these related fitness ventures: 

  • Optimity, a rewards-based app that seeks to bridge consumers’ needs for healthier lifestyles with the interests of retailers and insurers. Optimity does this by guiding users through micro routines designed to gradually improve their understanding of all forms of wellness, including financial health.
  • The credit card Paceline, launched in fall 2021, rewards users who achieve 150 minutes of weekly exercise.
  • The running-app STEPN rewards its users with cryptocurrency tokens for their fitness activities. It recently partnered with sports brand Asics on nonfungible token (NFT) sneakers.

Ness plans to take these models a few steps further by adding medical benefits to its planned credit card. It wouldn’t be the first – the AARP Essential Rewards Mastercard (Barclays) rewards its holders 2% back on medical expenses. 

Retailers should give these ventures close examination. For starters, most retailers have access to a wealth of shopper insights through their reward program platforms that can sharpen their wellness offerings specifically to what their customers want.

Here are five other key reasons why:

  1. Healthcare is a consumer product, and consumers want options. The average annual premium for family health insurance coverage in 2021 was $22,221, according to the Kaiser Family Foundation. Employers covered nearly 73% of that, meaning a family would have paid nearly $6,000. That same year, U.S. consumers spent an average of $1,650 in out-of-pocket healthcare expenses each – for many, that was on top of their premiums. Healthy side effect: As a result, more customers are shopping for alternate healthcare options from retailers. People spend nearly $1.5 trillion on health and wellness products and services now, and the figure is projected to climb 5% to 10% a year.
  2. To reduce employee expenses. Retailers can extend the rewards incentives of their healthcare platform partnerships to their workforces, to reduce their own expenses (and improve profits). Let’s refer back to those premiums and related expenses: In 2021, employers paid an average of $16,253 in health insurance costs for each employee with a family, and $6,440 for individuals. Healthcare premiums rose 22% over the last five years and 47% during the previous 10 years. There’s no indication these costs will subside, unless competitors offer viable consumer options. Healthy side effect: In addition to saving money, healthcare partnerships could provide a retailer a competitive edge in the field of talent recruitment and retention.
  3. To revive tired reward program models. Healthcare-focused reward platforms invite members to earn rewards in a different way – and it is a way that is gaining value to many, fast. This can serve as an elixir to engaging (or re-engaging) reward members – more than half of whom are likely inactive in the program. Customers are, however, becoming more active themselves – 42% consider wellness a top priority, according to McKinsey & Company. Healthy side effect: Loyalty programs that recognize members for the healthy choices they make elevate the experience beyond ho-hum legacy models (think two points for every $1 spent), not only by offering a different kind of reward, but also by coaching and educating members through suggested healthy options.
  4. It’s lower risk, and yields good insights. Becoming a partner in a rewards-based brand network would be less expensive for a retailer than launching its own wellness-based reward program, and its leaves the operations to the experts. This makes it less risky. Healthy side effect: Retailers that collaborate in these programs can potentially have access to a broader scope of their customers’ activities, beyond what they gather from their reward programs. And not just insights into wellness activities, but also of how their customers shop with other retailers, services and brands. These more-detailed insights will help retailers better anticipate shopper preferences.
  5. Because the competition is doing it. CVS, Walmart and Walgreens all operate retail health clinics (and CVS owns insurance provider Aetna). Supermarket chain Hy-Vee features in-store fitness equipment showrooms in partnership with Johnson Fitness & Wellness. Nordstrom is partnering with the smart home gym brand Tonal, adding the concept to 40 locations so customers can try out the pieces. Healthy side effect: While these services do not reward customers the way loyalty platforms would, they are evidence of the consumer’s embrace of retailers as wellness providers and even advisors. The growth potential is whatever retailers want to make of it.

Retailers, Can You Afford To Ignore This?

The financial-tech company Ness is essentially the answer to a call for affordable, more accessible wellness. While it’s a startup, the challenge it seeks to address is growing old. Creating partnerships with retailers and brands can afford a platform like Ness’s to offer the rewards that would matter to its target customer, which could be everyone. 

Affordable wellness shouldn’t be a legend. Retailers have found ways to make all kinds of goods accessible. They can rise to this challenge.

This article originally appeared in Forbes. Follow me on Facebook and Twitter for more on retail, loyalty and the customer experience.

Bryan Pearson
Retail and Loyalty-Marketing Executive, Best-Selling Author
With more than two decades experience developing meaningful customer relationships for some of the world’s leading companies, Bryan Pearson is an internationally recognized expert, author and speaker on customer loyalty and marketing. As former President and CEO of LoyaltyOne, a pioneer in loyalty strategies and measured marketing, he leverages the knowledge of 120 million customer relationships over 20 years to create relevant communications and enhanced shopper experiences. Bryan is author of the bestselling book The Loyalty Leap: Turning Customer Information into Customer Intimacy


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