Put personalized nutrition on the list of worries plaguing natural and specialty retailers. Nutrition Business Journal estimates that the share of supplement sales going to brands offering personalized regimens will reach 8% by 2023, and few strategies appear to keep any of those sales in brick-and-mortar retail, which means that the impending revolution in terms of how consumers approach and purchase supplements could be one more way that the physical retail world gets left behind.
Sales of supplements sold in brick-and-mortar have been in freefall for years, with online sales incrementally gobbling up a larger portion every year. Personalized nutrition, almost ironically, is increasingly an internet-only affair.
By far the biggest share of personalized nutrition supplement sales goes to survey-based brands such as Persona and care/of. Models such as these allow consumers to take a questionnaire online and fill in responses for queries such as age, diet, activity level and gender. An algorithm then suggests a particular vitamin regimen that consumers can subscribe to for delivery. The entire process happens online.
Even GNC and Vitamin Shoppe, the highest profile pure-supplement retailers in the market, are taking their personalized offerings online. Vitamin Shoppe has its Only Me program and GNC has GNC4U, which offers a questionnaire approach in addition to a DNA testing option.
Other methods include microbiome analysis, biomarker blood testing and DNA-based offerings, all of which happen through online interaction or the more hands-on practitioner model. None of those approaches have thus far found significant traction in brick-and-mortar retail.
Jay Jacobowitz, a consultant at Retail Insights, says that the obstacles to physical retail finding a foothold in personalized nutrition are formidable. One such obstacle is the opportunity and challenge of having consultants available to customers.
Square footage is a premium in all retail for starters, and space for consultants would undoubtedly be unused for most of the store's hours. Hiring professionals to take blood and DNA samples and provide these personalized recommendations could be a costly and complicated matter, too, and there is no automatic method for keeping the sales in-store.
“Retail space, especially good commercial retail space, is expensive,” he says. Taking out product to put in personalized nutrition service is a “completely different model,” but “your rent doesn’t change for that space,” he explains.
It’s not like no one has tried the model in the past. “You look at Natural Grocers and they have free nutrition counseling as part of their model,” Jacobowitz says.
The fact that nobody has figured out a model that fits the more modern definition of personalized nutrition doesn’t mean a clever scheme will not emerge soon, but it suggests that there is no easy answer. For instance, regulations that vary by location are a problem when national standards for nutrition professionals are lacking.
Jacobowitz puts it simply: “It’s going to be a state-by-state solution. It’s not going to be a one-size-fits-all model.”
Linda Shein, a brand consultant with extensive retail experience, including running a retail-focused think tank at the Wharton School of Business, agrees that retailers will need to get creative to hold onto a piece of the personalized nutrition revolution. But even with creativity, the energy required to get people in the door can be difficult to sustain.
“Innovation, early on, drives traffic into the store, because it’s interesting and it’s different. It’s fun, until it becomes a baseline, and everybody is doing it, and then what are you going to do to keep it exciting?”
Personalized nutrition could supply the kind of in-depth customer profiling that retailers dream of, but offering services is a costly endeavor, likely beyond the reach of smaller independents. Even big chains would be taking a close look at the costs, she says.
Turning those profiles into individual vitamin packs is an even bigger hurdle, she notes. It’s not like somebody is sitting in the back of the independent retailer counting pills into individually labeled Ziploc baggies. One of the biggest investments in providing personalized nutrition regimens is the machinery required to assemble the daily pill packets. The logistics are daunting–a half-dozen or more different pills, in different packets, different combinations for morning and night, meaning two runs through a costly machine for every single customer.
An easier way in, she believes, would be for an established survey-based company to co-brand with a store. There could be, she says, a kiosk with a keyboard in stores where customers could input their personal data. Even if the customer gets the deliveries at home, the store could still get a cut. There would be the branding connection and perhaps coupons for in-store purchases.
“If I’m a retailer, that’s what I’d want to do. I’d want to have somebody else, who already has all the machinery and has the whole system down, to be able to do it, but with my label.”
Back in the game
One retail chain that tried personalized nutrition in pill packets and stepped away from the model was GNC. Now they are diving back in with GNC4U, launched last year. Consumers can take two paths in the program. One is a standard questionnaire-driven program. The other includes a “Powered by Vitagene” DNA kit.
The chain’s chief branding officer, Ryan Ostrom, wasn’t with GNC in the late 1990s for the first packet experience, but he says customers are ready for it now. “We did several consumer studies, and what we found out is that there’s a huge white space in the market to have personalization paired with a known brand entity,” Ostrom says.
Perhaps the biggest difference between the late 90s and now, Ostrom says, is “the evolution of digital and the connectivity of the customer and the ease of purchasing online.” One-click buying and same-day delivery were far from expected 20 years ago.
But GNC is not giving up on making the brick-and-mortar locations part of the picture. Brick-and-mortar, Ostrom says, gives them an advantage over online-only outfits like Persona and care/of. “I think the one asset that we have with GNC is our coaches that we have in store, and they’re really knowledge about solutions for the customer,” he says.
The company is exploring ways to “seamlessly integrate” the in-store and online experiences. “I think a lot of people come into our stores to get the recommendations of what’s best for them and they can take those recommendations and shift into GNC4U,” he says.
Part of what the ongoing relationship online provides is a chance for a constant evaluation of a consumer’s progress and health status. Some of those progress reports could include a nudge to get them into a store. “I think that’s where we can really play with seeing what’s happening in the store and what’s happening online and keep that kind of back and forth to engage the customer,” Ostrom says.
Co-branded survey-driven deliveries are not on Darrin Peterson’s radar for personalized nutrition's place in physical retail locations, but those kinds of efforts are aligned with his mantra for preserving a role for brick-and-mortar in general. “We need to get creative,” Peterson says. “It’s crucial.”
The CEO and founder of the LifeSeasons supplement brand dreams of an ambitious role for brick-and-mortar stores in the delivery of personalized nutrition. LifeSeasons already has their own in-house integrative health clinic that’s “full service with an MD and everything.”
If CVS has its MinuteClinics with nurse practitioners and physicians’ assistants, there’s no reason natural retailers couldn’t offer similarly scaled ideas, he says. All the tools of alternative intervention—healthier food, supplements and natural personal care products—are on site. “I see the day when the health food stores become the new pharmacies and the new clinics of the 21st century,” Peterson says.
Some of those services would include personalized nutrition analysis, Peterson says, including interpreting DNA tests and taking blood samples for nutrient biomarkers.
Peterson believes the supplement industry owes it to retailers to bring them along in the evolution toward personalized nutrition. Competing on price looks like an obvious dead end for the retailers who helped build the supplement industry. “If the health food stores remain in a commodity driven business, they’re going to fail because Amazon’s going to kill them at that,” Peterson says.
Service is a different matter. Natural retail excels at service, and personalized nutrition offers them an opportunity that the supplement industry can help them realize. Helping put professional services in retail locations works for both sides of the retail/brand equation, when more customers are looking for a bridge between medical and natural care.
“As we step up our game as an industry, how do we bring those two worlds together? What better place to do it than in a trusted place,” Peterson says. “They’re already going to the health food store.”
Retailers could certainly use the help, says Mike Sammons of Mike’s Health Collection in McKinney, Texas. Sammons says one of the most common questions he gets from customers is about finding professional advice. “They literally come in every day saying, ‘Do you guys have a doctor you can refer me to,’” he says.
Customers, he says, respond eagerly to brands that offer in-store education in the form of brochures and other materials. More personalized information would be an even stronger draw. “If we had DNA testing, I think it would go over really well,” Sammons says.
But there is a cost factor for independent retailers, Sammons explains. He had a computer-based system that provided instant nutrient assessment, but the provider “started jumping his prices so much that we just gave it back to him.”
Bringing a nurse in for blood draws would be even more expensive, he says. Supplement companies would have to get behind retailers to make something like the CVS model to work in natural retail. LifeSeasons’ clinic is not far from McKinney, and some of those services could happen in stores, Sammons says. “We’re already sending people out to their facility.”
Gena Kadar is dean of nutrition at the Southwest College of Naturopathic Medicine, and she says the students’ education can’t stop at the science of personalized nutrition. They also need to learn how to find opportunities to provide that care, and n atural retail could be a perfect platform.
“It really improves that access to the availability of care. It makes it so much easier. It’s eliminating a lot of those traditional barriers,” she says. “In today’s world, convenience rules.”
Immediacy is important, too. Practitioners wouldn’t just give patients a shopping list, they could take them shopping. “I can be there as an expert to guide you when you’re making that decision, not just tell you, ‘Hey, take an omega-3 supplement,’ but actually show you what options are available.”
Kadar sees opportunities to not only reach patients face-to-face in the stores but also through telemedicine programs that could employ a screen in store that would allow a practitioner in a remote location to interact with customers in multiple stores.
Patients are already showing up in naturopaths’ offices with 23andMe and blood tests results. There’s no reason the personalized recommendations derived from those tests couldn’t be delivered through interaction in a store or via an in-store video booth, Kadar says.
Without a practitioner in house, however, sample collection gets complicated.
The laws around taking samples, even cheek swabs, are far from intuitive. It seems obvious that a blood draw would require the presence of a licensed medical professional, but what about a finger prick? It turns out that, in some cases, the FDA regards both as “invasive” medical tests, says Neil O’Flaherty, a regulatory lawyer at Amin Talati Wasserman.
The agency can get technical about something as seemingly simple as a cheek swab for a DNA test, he says, explaining that something perceived to have penetrated the mucus membrane can be labeled invasive. Home tests kits for blood and DNA get evaluated on a case-by-case basis, with a specific collection method for a specific test. For stores the safest approach would be to have medical professionals on site. “I haven’t seen them back away from their definition of invasive,” O’Flaherty says.
The one thing that is clear about personalized nutrition is that it is moving from theory to practice in ways that might fall short of the futurist dreams the nutrition industry has gotten used to hearing at trade shows and science conferences. That 83% of personalized nutrition is survey-based might be disappointing news to people who had envisioned gleaming labs and DNA-driven precision regimens.
Of course, nobody is likely to be more disappointed by the evolution of personalized nutrition than retailers.
For Nutrition Business Journal's first Personalized Nutrition Special Report, NBJ Senior Analyst Claire Morton Reynolds conducted market sizing research to determine sales volume and market share for each of the personalized methodologies. No detailed discussion of sales channels is included in the report because, so far, only one channel appears to matter. We can assume that some customers are looking at their DNA test results and taking their shopping list to Whole Foods, but for the vast majority of users turning to these services, the sales are going to happen online.
That’s the nature of the subscription era, when everything from shaving cream to dog food shows up every month with no store trip required. It’s especially true for personalized nutrition where a set of pills in a plastic packet makes the sorting easy.
Peterson is passionate when he says the supplement industry cannot leave retailers behind in this new evolution. Retailers helped build the industry, and he’s convinced the brick-and-mortar channel has a vital role to play in building out personalized nutrition. The LifeSeasons clinic is a laboratory to see how the pieces fit together. He sees a network of stores and a network of practitioners working with supplement companies that fund the clinical studies that help nutritional interventions find acceptance as healthcare.
“That’s kind of the bigger vision,” he says. “I just can’t get there fast enough."