Organizational Strategy / Product Development

Conscious Consumers in America

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In recent times we have seen a surge in the mobile health app market.  MyFitnessPal, just one of the popular apps used to track calories, has over 65 million users. There has also been a huge increase in the sales of fitness trackers, like Fitbits, Jawbone UPs, and Nike FuelBands.  According to the retail tracking performed by market research company, NPD Group, “The digital fitness category has grown to over $330 million.”[1] These trackers typically have accompanying apps that can be downloaded onto users’ smartphones.  I mention this digital health trend because there have been a few intriguing headlines in business publications that relate to America’s health kick.  Organizations like Nintendo, CVS, and McDonald’s (yes, McDonald’s), are taking steps to cater to health-conscious citizens.

It is no news that McDonald’s bottom line has been hurting as of late.  Comparable sales decreased 3.3% last quarter, as fewer customers came in to eat and competitors ramped up their efforts, per Fortune magazine.  In a desperate attempt to ameliorate these recurring dips in revenue, the company plans to shift the focus onto food quality, while adopting the use of digital payments (e.g., Apple Pay).  Now for the headlining story that caught my attention, CEO Don Thompson stated in late October that, “You’ll see us in some categories looking to different products, possibly organics.”[2]  It will be surprising to the masses if this fast-food giant pursues this organic product market.  The tactic has worked quite well for Chipotle Mexican Grill, whose third quarter sales jumped 20%.  Consumer research manager at Technomic Inc., Kelly Weikel, makes the point that “Younger consumers eat out a lot, and they don’t want to feel bad about their choices every day.  Eating healthy is also appealing for boomers. When they eat out, they go for a little bit healthier because they are trying to preserve their vitality.”  Perhaps McDonald’s is finally hurting enough economically to become willing to change their strategies in order to meet the demands of increasingly health-conscious consumers around the world.

According to CNN Money, “Nintendo wants to watch you sleep.”[3]  The company has just released new information about its “QOL” platform, which stands for “quality of life” and includes a line of health-focused devices, as explained in the article.  They have developed a sleep sensor that is aimed to improve restfulness.  Users will simply place the sensor on their bedside, data will be sent up to the cloud for analysis, and suggestions will be made to help improve restfulness.  Nintendo chief Satoru Iwata clarifies, “Inside the QOL Sensor is a non-contact radio frequency sensor, which measures such things as the movements of your body, breathing, and heartbeat, all without physically touching your body.  This automatically gathered data will be transmitted to the QOL cloud servers, which will then analyze the data measured by the sensor and visually represent sleep and fatigue results.”[4]  Currently on mobile app stores, you can find tools that attempt to provide the same insight into sleep.  It’s apparent that many companies, especially tech companies, are investing in health.  Nintendo has been around since 1889 as a manufacturer of Japanese playing cards, and they’ve been known to take gambles into new markets, so it will be interesting to see how this works out for them.

CVS, the giant drugstore chain, on the other hand, is pulling certain products from their shelves in order to move into other areas of health care.  In September, the company proclaimed: “We’ve officially quit selling tobacco in all CVS/pharmacy stores.”[5]  They also changed their name from CVS Caremark to CVS Health.  Executive Vice President Helena Foulkes elaborates on the decision by saying, “As we’ve been working on doing a better job integrating health plans and doctors’ offices and hospital systems, we would go in and give these great presentations, and almost at the end of every presentation, someone would raise his hand and say, ‘So why do you still sell cigarettes?’”  So, they decided to quit cold-turkey, and forgo $2 billion of its $125 billion in annual sales.  The sale of tobacco products conflicts with the primary purpose of a health care provider. The decision may have shocked the U.S. public health community and Wall Street, but seems like a sound business move that coincides with their commitment and desire to change the future health of Americans.

Brand innovation studio BBMG’s Conscious Consumer Report highlights the fact that nearly nine out of ten Americans say the words “conscious consumer” describe them well and are more likely to buy from companies that promote health and safety benefits.[6] As more and more consumers are beginning to accept responsibility for their health and become loyal customers for health-related products and services, it makes sense that companies like CVS, Nintendo, and McDonald’s would be willing to alter product lines in order to create a more health-conscious image.

Jill Walsh


Sources

[1] https://www.npd.com/wps/portal/npd/us/news/press-releases/wearable-tech-device-awareness-surpasses-50-percent-among-us-consumers-according-to-npd/

[2] http://www.bloomberg.com/news/2014-10-21/mcdonald-s-may-sell-more-organic-foods.html

[3] http://money.cnn.com/2014/11/04/technology/nintendo-sleep/index.html

[4] http://www.cnet.com/news/nintendo-takes-aim-at-quality-of-life-with-sleep-sensor/

[5] http://www.forbes.com/sites/sarahhedgecock/2014/09/05/lots-of-smoke-as-cvs-withdraws-cigarettes/

[6] https://www.fmi.org/docs/sustainability/BBMG_Conscious_Consumer_White_Paper.pdf

[7] http://handshake20.com/wp-content/uploads/6a00e54f9234088833017c34186249970b.jpg

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