Build it and they will come. Wellness isn’t a trend—it’s a movement driven by values that are central to consumers’ purchasing decisions. The space is growing and dynamic. The wellness category is now a $4.2 trillion global industry that is growing at a historic rate and that is double the global economy, according to the Global Wellness Institute.

Consumers clearly care about the category, but living out the wellness principles they value isn’t always easy in overscheduled busy lives. For this reason consumers embrace innovations that incorporate wellness benefits embedded in their features, and retail destinations that provide context to the expansive wellness landscape. Brands like Goop and Bandier are creating experiential retail destinations that are becoming ground zero for the coveted wellness consumers. By offering the right environment, experience, product mix, and merchandising strategies, consumers feel the difference in these stores. The result is a destination for health and wellness rather than just a store to simply purchase products.

These retailers are exploring the business potential of wellness by creating experiential platforms across categories that address key drivers of these consumers while simultaneously overcoming the barriers of the category. The fast-growing space is attracting the attention of private equity and venture capital. Bandier recently completed a $34 million funding round led by Eurazeo’s $25 million investment, while Goop has raised a total of $82 million in funding to date.

Bandier has a total of six retail stores, but the new 4,600-square-foot SoHo flagship “Bandier 2.0.” is an evolution of the five-year old activewear brand. They’ve created a hybrid connected by wellness that incorporates athleisure, beauty, and in-store experience to convert customers. “We’re going to double down on the lifestyle portion of our business,” the brand told Business of Fashion. “The whole concept of that is community.”

While the bulk of Goop‘s sales are still online, wellness-themed stores and pop-ups are driving much of Goop’s growth according to Kim Kreuzberger, Goop’s chief revenue officer. Goop recently opened its second permanent store, Goop Lab, in New York, selling apparel, accessories, and beauty products, with a kitchen that hosts cooking demos and events. Goop has more stores and pop-ups planned. “Whether it’s fashion, beauty or wellness, our job is to simplify and curate her lifestyle … helping her make every choice count,” said Kreuzberger. “We aren’t just throwing more product at her. We’re being strategic and thoughtful.” Goop has also shifted the financial paradigm on retail with sponsored partnerships that cover operational and buildout costs.

Getting the wellness equation right can pay off handsomely, as Bandier and Goop have proven. What these brands have at their core is an understanding of what drives this wellness consumer as well as the barriers that still exist for other consumers that are yet to be converted.

Key Health and Wellness Drivers:

In order to cater to the demographic you need to truly understand the drivers of the movement. A white paper from the Global Market Development Center identified nine macro-trends that are influencing consumer attitudes, motivations, and behaviors. Understanding these trends and their impact should be foundational to any brand strategy in the wellness space.

- Exercise – Consumers are exercising three days a week on average - Healthy Diet – 63% are trying to eat healthier, and 44% eat more at home - Label Readers – 45% read product labels to make healthier choices - Doctor Visits – 85% have seen a doctor at least once - Shop Local – 48% of consumers shop local for natural/organic - Mobile First – 45.7 million consumers use their phone to search for health and wellness solutions - Baby Boomers vs Millennials – Baby boomers spend 42% more on health and wellness than millennials - Self-Care Shift – 1 in 2 Americans are shifting from health care to self-care as a result of rising costs - Supplements: 8 in 10 consumers are using vitamins and supplements to enhance their wellness

Barriers to Overcome:

There are the wellness devotees who have fueled the growth of the space, but future success will require collaborating with consumers who want to lead a healthier lifestyle but aren’t quite there yet. The top challenges for these consumers are confusion caused by prohibitive cost and commitment, conflicting information, and lack of convenience.

- Time -45% don’t have time - Confusion – 42% say there is too much conflicting information - Cost – 40% say it costs too much - Effort – 32% say it requires too much effort

Bandier and Goop seem to have unlocked the wellness retail equation. They build assortments and experiences using their unique POV to curate product and experiences that differentiate them in the crowded landscape while creating value for consumers beyond a single transaction.

1. Point of View: Both the brands and the product assortments have a unique POV while entering the wellness conversion from different angles. Bandier approaches the category from fitness/athleisure, while Goop has a lifestyle approach that leverages founder Gwyneth Paltrow. Where their approaches converge is a curatorial merchandising strategy across wellness categories. 2. Exclusive Product: There are 90 brands carried at Bandier that make up 60% of the business; however, the company creates differentiation through collaborations and exclusive product. This gives consumers a reason to shop at Bandier versus their competitors. 3. Beauty: A significant part of Goop revenue comes from the beauty category. They sell 250 third-party brands online, with 100 of them being sold in-store along with Goop-branded beauty products across skincare, supplements, and fragrance. Bandier only entered the beauty category last year and currently carries 18 brands with products priced from $10 to $300. 4. Branded Product: Both Goop and Bandier have used insights from the sale of third-party brands to inform the creation of private-label brands and products. The margins on branded product are significantly higher, and both brands sell their products to other retailers like Net-a-Porter to create more brand awareness and additional revenue streams. 5. Pop-Ups: These brands have different but intentional pop-up strategies. Goop creates fully immersive experiences as audience development tests. If a pop-up does well, they extend the run into a permanent location. Pop-ups also cause a lift in traffic to the content and commerce portions of their website. Bandier on the other hand has set aside spade in the Soho flagship for brands to stage pop-ups. 6. Consumer Engagement Outside the Store: Engaging consumers outside their stores is an important part of creating value for their consumers. Goop does this through summits and conferences while Bandier also operates a fitness studio in New York called Studio B.