Zoe Chew

March 30, 2022

D2C Wellness and the Future of Personal Health

⭐️ Premium Post

Issue #11

D2C Wellness

Direct-to-consumer (D2C) wellness space is exploding. Companies are changing healthcare by building, marketing, and selling wellness products directly to end consumers, without intermediaries. Consumers can access diagnosis, self-testing kits, clinical consultation, prescription, and medication online.

Today, we’ll examine companies that provide D2C wellness offerings for the body, mind, emotion, and social aspects of well-being. And reveal exciting whitespace where new players can capitalize and monetize.

Key trends

(1) Personalization of health:

  • Companies are catering to product needs at an individual level, rather than one-size-fits-all solutions.
  • Found prescribes weight-loss medication based on the assessment of your biology such as genetics, microbes & metabolism.
  • ZOE offers at-home test kits to analyze blood fat and blood sugar responses, and recommend diet plans.

(2) Rise of holistic wellness:

  • New companies are using a “whole-body” solution to optimize health.
  • Parsley Health offers holistic medicine healing.
  • Noom leverages psychology treatment for long-lasting weight loss.

(3) Science-based treatment:

  • Companies are leveraging science-based and research-backed wellness solutions to deliver long-term results.
  • Rise fixes sleep issues by studying sleep debt and circadian rhythm.
  • Care/of assesses your biology to find the right vitamin and protein powder that works.

(4) Authenticity and diversity in D2C marketing:

  • Consumers are no longer buying into the perfect “flawless skin” or “skinny body” model.
  • They want to see advertisements that “looked just like us” and emphasize that “we are not perfect”.
  • Take a look at the landing page of Youth To The People and Oviva.

(5) Integrating wellness services:

  • Today, D2C wellness companies provide more than just physical products.
  • Ritual sells multivitamins and helps you find the right combination of multivitamins using an online quiz.
  • Ahead provides mental health medication plus ongoing care with your provider.

(6) Natural products as a primary value proposition:

  • Companies are focusing on chemical-free, clean, safe, and environmentally friendly in categories like skincare, cosmetics, supplements, dental care, etc.
  • frank body sells clean and cruelty-free products.
  • hello sells natural and vegan dental care products.

(7) Wearable wellness and data-as-a-product:

  • Companies are integrating hardware and data into wellness products such as sleep, brain, and fitness trackers. Consumers can access insights about their daily performance.
  • Oura ring tracks deep sleep, REM sleep, light sleep, nightly heart rate, and HRV.
  • Muse offers EGG-powered meditation trackers and their premium subscription will give you post-session reports to see how your brain & body responded.

Players by categories & niches

What problems do they solve?

  • Remove stigmas and taboos especially sexual health, hair loss & feminine hygiene space. Using Roman, Hims, Hers, consumers can skip in-person doctor visits and have their diagnosis done online or products delivered discreetly to their doorstep.
  • Address targeted needs at an individual level. It’s hard to figure out the right supplements and doses without the right lab work. Most personalized nutrition solutions like Gini, ZOE, Gutxy solve this problem by providing online assessment, self-testing kits, micronutrient testing, and personalized recommendations on vitamin products or dietary programs.
  • Long-term results. Doctors often prescribe temporary solutions rather than treating the “real” fundamental problems (i.e. stress & sleep) that cause health issues. Take overweight as an example. Found and Calibrate combine food, movement, sleep, medications, and coaching to help clients lose weight using a “whole-body” solution.
  • Simplify the healthcare shopping process. Accessing diagnosis, prescriptions, and medications is done digitally. No more reading lingo on vitamin bottles or confusing languages on lab test reports. PillPack allows you to never worry about running out of your medications.

Business models

The majority of D2C health companies are layering different business models to create multiple revenue streams:

  • B2C eCommerce. Many players in this space have established an online store, sell physical products and deliver prescription, skincare, mattress, or multivitamin-in-a-box to customers’ doorstep.
  • Subscription. Deliver monthly subscription boxes or a bundle of products plus services to customers. Noom costs $66.35/month or $199/year which includes comprehensive wellness plans. Found charges $100/month including weight-loss medication products & health coaching. WeightWatchers charges membership fees for an on-demand, expert-led coaching program. Hubble charges $39/month for contact lens boxes. Parsley Health costs $175/month for 5x clinical, medical & health coach visits per year.
  • One-time fee for health programs. ZOE charges $360 per user for a variety of metabolism tests. Smile Direct Club charges $1950 for teeth aligners products, including video chats, aligner replacement, and treatment notifications. Uniform Teeth costs $2,995 to $5,450+ for a variety of teeth alignment treatment. Calibrate costs $1,620 for a one-year virtual program.

Why now?

This section explores key takeaways, where the future of health is heading and answering the “why now” questions (most important slide in your pitch deck!) for your investors:

  • Prominent signal boosts will raise investors’ interest in the D2C health space. In 2019, Amazon acquired PillPack for $753 million and entered the online pharmacy space. Roman raised $500 million at $5 billion valuations in 2021.
  • Consumers’ behaviors are changing. They want healthcare solutions that deliver on-demand experiences, provide self-diagnose tools; are transparent, authentic, accessible (price and convenience factor). Therefore, D2C healthcare is well-positioned for this shifting user's needs.
  • D2C healthcare will continue to grow as more consumers become familiar with eCommerce and online shopping. Tools like Shopify and Wix eCommerce will give rise to new D2C wellness brands as entrepreneurs can start their own platforms with little cost.
  • Opportunities to capitalize on millennials and the Gen Z market that has an increasing representation of 38.8% of the global population by 2030. The millennials and Gen Z prioritize personal health. Collectively, they spend $158 billion on wellness, particularly in nutrition and fitness.
  • Data-driven healthcare will be the next trend for personal health startups. Consumers want science-based analysis, not guesswork about their health; access digital health reports on mobile and get recommendations based on data to optimize health.
  • The next-gen of healthcare is “holistic”. More solutions will integrate consumers’ overall well-being (physical, mental, and emotional health) and provide comprehensive values through prescription, medication, consultation, eCommerce, therapy, educational programs, and online communities.

Business opportunities

  • Supergreat but for different niches. As the influencer and creator economy continues to explode, there could be a solution like Supergreat but for wellness that connects health-conscious consumers with fitness/diet/mindfulness influencers reviewing health-related products that worked, sharing their routines and shopping list through live-streaming eCommerce format. Consumers can easily purchase the products through live videos without leaving the platform.
  • D2C healthcare for the elderly. Senior citizens, those above 65 years old can access on-demand solutions for regular medication (especially chronic prescription), elderly care equipment, and emergency assistance. They could easily use voice-command or wearable devices to place an order, request consultation, or book an at-home doctor visit instead of manually going through the app.
  • Online-To-Offline (O2O) solutions for health clinics. Many brick-and-mortar health clinics (e.g. primary care, dental, weight care, psychologist clinics) are falling behind as the world shifts to telehealth providers. Create a B2B software to help physical clinics go online and attract customers to their location. There could be a one-stop SaaS to set up an online storefront, online assessments, patient booking page, appointment scheduling, payment processing, email marketing, referral marketing, recurring membership, etc.