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Last week, the health and nutrition retailer GNC announced that as part of an ongoing initiative to improve its business, the company will be closing 200 stores.
This move can be attributed to a larger narrative in retail: Companies have way too many stores and need to close down locations to scale back on costs like rent in favor of focusing on e-commerce. GNC has 8,905 stores around the world, with 3,385 locations in the US alone — and that number doesn’t even include franchise stores or the store-within-a-store partnerships it has with Rite-Aid.
But there’s more to GNC’s trouble than simply closing stores. The company’s revenue has been down over the past two years, from $2.6 billion in 2015 to $2.4 billion as of 2017. And while that’s certainly not chump change, it also doesn’t reflect the boom that the overall vitamin and supplement market is currently enjoying. There are projections that customers will spend $13.9 billion on vitamins and supplements this year, and analysts calculate the overall global market will hit $220 billion by 2023.
With such promising projections, why isn’t a company like GNC reigning supreme? Especially given that it has advantages like a huge retail footprint, as well as an 83-year standing in the category. The disconnect lies within the burgeoning, lucrative, and largely unregulated sector of wellness.
It’s fair to point to Gwyneth Paltrow for this one: Wellness has become a booming economy. A study from Women’s Marketing found that between fitness, beauty, health, anti-aging, and mindfulness, products in the wellness sector bring in $3.7 trillion annually. This study also found that women in the US invest in $40 billion worth of alternative medicine like supplements.
Wellness has become a status symbol, and it directly correlates to how people view vitamins and supplements. Wellness has created an opportunity in which “individuals among high socio-economic and upper-middle-class income groups are expected to perceive the nutraceuticals including dietary supplements as the alternatives to prescribed drugs,” a report from Grandview Research found.
The sector has lead to a fresh crop of supplement companies. There are now hundreds of new vitamin companies that tout aspirational messaging and glossy imagery, and many of them have found success on Instagram. Vitamins aren’t just being sold with the claims that they can fight colds: They now say they can give you back the energy of your youth, calm you down when you’re feeling anxious, and give you “shinier hair, stronger nails and firmer skin.”
Whether these companies peddle products that are safe or legitimate is a discussion for another time. What’s clear, though, is that they’re taking a huge bite out of GNC’s business by using aspirational marketing and imagery, and by bolstering all of it with the promises of wellness. GNC doesn’t have particularly strong branding or imagery, and while it did have some Kardashian sponcon circa 2009, the family has since moved on to shinier supplement and vitamin brands like SugarBear Hair and teatoxes.
GNC isn’t alone in this: Other legacy vitamin retailers have been struggling too. GNC’s biggest competitor, the Vitamin Shoppe, recently hired turnaround advisers to study its business amid slumping sales, according to the Wall Street Journal. Last September, Vitamin World filed for bankruptcy, and later in the fall it shared plans to close 124 of its stores and sell off the rest.
These vitamin retailers have identities that are worlds away from the newcomers. There’s no beautiful, high-end packaging that entices shoppers; there’s no lustrous, enticing imagery that’s simultaneously seductive and health-adjacent.
Compare GNC’s sterile store atmosphere to the sleek, minimalist design of vitamin companies like Care/of, Ritual, Olly, or Goop and it’s easy to understand why shoppers excited about wellness are finding “fixes” for beauty, weight loss, or nutrition elsewhere.
“The way in which GNC retails is out of step with what modern consumers want,” says Neil Saunders, GlobalData’s retail managing director. “The stores themselves do not fit in with the wellness trend. They don’t feel calm or relaxing but rather are a bit overwhelming and, for those not familiar with the category, can be stressful. Crowding in loads of product puts off occasional shoppers, and it means it is hard for GNC to easily showcase new innovations or ideas in health.”
The average GNC product is also associated with the macho, ripped bodybuilder image, Saunders adds, which can be isolating for customers interested in this sector as wellness becomes a bigger category: “There is also something of an inclusivity issue. GNC is a very masculine brand and sells in an environment more suited to men with a deep interest in fitness. As it does not appeal across the spectrum, it misses out on a large slice of the female wellness market and from some males who are not into extreme fitness.”
When it comes down to it, Saunders continues: “GNC should be thriving in a society more concerned with wellness. That it isn’t comes down to the way in which it sells.”
The potential good news for GNC is that wellness isn’t going away anytime soon. There’s still time to capitalize on the trend, whether by revamping its branding aesthetic, giving its stores a much-needed facelift, or perhaps even starting to stock these up-and-coming Instagram vitamin brands.
This pivot isn’t actually all that far from the retailer: GNC’s tagline just so happens to be “Live Well.” Seems like this might be a shift that was meant to be.