Marc Brush, former editor of Nutrition Business Journal and a principal in the consulting firm Natch LLC, said the gathering of personalized data is not only a way for companies to potentially do better for their consumers from a health standpoint, but also to get to know them better so as to better retain their business.
Retail landscape in turmoil
“Everybody is predicting the death of traditional retail,” Brush said. “A lot of companies have reacted by launching new strategies for brick and mortar retail as well as online.”
Brush said the industry seems to be bifurcating into value platforms which are increasingly moving online, and the traditional health food store channel, which is still defending its niche within the industry.
“That is a mode of very ‘high touch’ retail where you really get to know your consumer,” Brush said. “ You have the best educated sales staff. But what you typically don’t have in that scenario is a mastery of the data.”
On the flip side are online supplement sellers. At the top of that heap are the Amazon private label brands, of course, but other brands are popping up with dizzying speed, he said.
These companies have data built into their DNA, which makes the incorporation of a personalized nutrition approach far easier, Brush said.
“There are all these agencies that are all about figuring out how people shop and helping provide tools to get in front of specific consumers,” he said. “The digital commerce play is where the upstarts can really shine.”
“The market is moving pretty aggressively toward digital. It’s easier to do if you are built that way from day one versus trying to learn how to do it after having been in business for 50 years,” Brush said.
BuluBox CEO: Personalized nutrition just one more set of data points
Paul Jarrett is cofounder and CEO of sampling and data mining firm BuluBox. His company started as a way to help supplement and functional food companies make more informed decisions about new product launches via a more sophisticated sampling mode. But as the company has gained traction in the marketplace, it has become a data powerhouse as well.
Jarrett concurred with Brush that personalized nutrition platforms are part of an ongoing shift in the marketplace. The new tools that are available are in one way just more data points that retailers can use to understand their consumers.
“I view it as just another way of collecting data. It’s no different from collecting your e-mail address. A lot of smart companies are just making that part of building a consumer profile,” he said.
Jarrett said BuluBox was built from the ground up in the way Brush described. When the company first started to send out its subscription boxes with a variety of product samples in them, it incentivized its subscribers to provide more personalized health data.
“When we created BuluBox we were collecting all of that information. When you signed up you had to provide all of that health info if you wanted to get into a preferred level where you earned more ‘points,’” Jarrett said.
Big project with GNC
BuluBox has been working with GNC on a project for several years, Jarrett said. GNC is one of the retailers struggling to navigate the shifting landscape. For a number of years the company had been generating high sales numbers by relying on traditional retailing loyalty programs. But the approach had grown stale.
BuluBox is helping GNC refine what it calls its ‘Pro Access’ plan that provides customized boxes to consumers. The goal is to figure out how far customization based on personalized nutrition data and other consumer factors can be taken without making the whole thing too costly.
“There is a proprietary way that we slice and dice the data and use that info with GNC,” Jarrett said. “GNC has assembled an awesome data team. We are working out a way to create a box that can be customized to each person individually. We are working out what makes the most sense in regard to covering the most customers without breaking the bank,” Jarrett said.
Calculating the costs of personalization
This drives to part of BuluBox’s expertise, that is, in figuring out how to make these individualized approaches work at the end of the business where products are actually going out the door. Some personalized nutrition approaches might still he constrained by what can actually be achieved in a warehouse situation, he said.
“In the GNC project we broke consumers down into eight basic segments,” he said. “The more individualization you have, the more touches you have on any product, and that costs money.”
“I recently saw a presentation by an MIT expert on robotics. She said robots are still a lot dumber than people give them credit for,” he said.
Jarrett said this problem is far from insuperable. He just hasn’t seen a definitive answer yet.
“When we first started leveraging that data with BuluBox we were going out and building our own vitamins and supplements and healthy snacks,” he said. But the approach proved to be too costly in the end.
“When I look at what some testing firms are offering in the market, there are some super cool products out there. Like Quest Diagnostics, and their Blueprint for Athletes product. It’s incredible to see what they can collect and how easy it is using blood, hair and urine,” he said.
“But it’s kind of like how NASA develops something and then it takes a company like Tempurpedic to turn it into a bed. Nobody yet has really put this all together,” Jarrett said.
Solution likely to come from online brands
Brush said that solution is likely to come about quickly as online brands rapidly run through potential approaches.
“In a traditional supplement company, you take a year to figure out what new products to launch and another year to build out a supply chain. You can compress those cycles when you go online,” he said.
“There is a whole new wave of supplement brands being launched digitally. These brands typically have a top tier website with a very strong e commerce platform connected to that. A lot of these developers are coming out of the consumer products space so they are typically branded very well,” Brush said.
“They launch products in small batches, see if people click on it, and if they do they can devote more effort to it,” he said.
Healthy Aging event
Marc Brush will be one of the panelists participating in NutraIngredients-USA’s online Healthy Aging event taking place on October 25, 2018. For more information about this FREE event, please click HERE.
