Winter 2002
LOHAS: Buying Goes Green

What does it mean if one of the best-selling videos at the end of the century wasn’t a Hollywood blockbuster, but an instructional yoga tape that sold more than a million copies? It means fast-forward to the future. That tape is a glimpse of LOHAS: Lifestyles of Health and Sustainability.

The new wave/next thing, LOHAS has an increasing influence on everything: day-to-day living, social issues, economics. And it’s already having a direct impact on specialty retail.

LOHAS is a point of view, a sensibility. It’s not an organization but a movement—he values, mindset and choices of a growing group of consumers coalescing into a market force. They make informed decisions and choose products that meet not just their needs but their values. It’s a quiet revolution that savvy retailers want to know about, gear up for and profit from. Some already do: The Body Shop, Trader Joe’s and Whole Foods Market, for example. They’re among the many retailers large and small that target and serve this significant market segment, this “recently identified group… that represents a $540-billion global marketplace… educated consumers who make conscientious purchasing and investing decisions,” according to the LOHAS Journal. In the US, they’re roughly 25 percent of the buying public, and a $230 billion market.

Collective conscience

Defining these consumers by traditional demographics presents problems. They cut across age groups, income and education levels, religion, geography and gender. Women make up 60 percent of the group, but men spend as much, if not more—they just shop less frequently, says Clay Garner, a Chicago new-business consultant who focuses on LOHAS. Some are married, some have children. Whether they live in the city, the suburbs or the country, “home” is high on their list of what’s important. So are the arts and the news. They’re information junkies: they read, research and question everything they see in print, online and on the air. They regularly tune in and contribute to public radio and TV, and buy numerous books and magazines. Nina Utne, CEO of the informed, upmarket Utne Reader, knows her readers are part of this group: college-educated and affluent, cross-generational, more women than men, and all with that “certain sensibility,” she says.

Paul Ray, PhD, and Sherry Ruth Anderson, PhD, coined the term the “cultural creatives” in their book of the same name to identify this consumer group. Since 1960, according to Ray and Anderson, “50 million people [in the US] have made a comprehensive shift in their world view, values and way of life—their culture.” They tend to look at the big picture and think outside the proverbial box. They are the innovators and consumers of holistic everything from psychotherapy to health care to foods, says Ray (last year’s Leadership in Business Award winner at the Natural Business Market Trends Conference). Body, mind and spirit are unified (that’s the goal, at any rate). And according to Ray, these consumers are driving the demand for products that promote or reflect:

  • Concern for the planet
  • Authenticity in life, work, business, politics
  • A spotlight on women’s issues here and overseas
  • First-person accounts (note the number of memoirs on best-seller lists)
  • Personal and societal spirituality (not necessarily organized religion per se)

Although they seek authenticity, personal growth and spiritual development, labeling them “New Age” is inaccurate. There may be some overlap for some of them, but they’re more than that and not quite that; difficult to pigeonhole. And although they’re not techies ahead of the curve with the very latest gizmos and gadgets (though many have them), they are on the leading edge of cultural innovations large and small. Think Feng Shui, Pilates, animal rights.

imageThis group is also redefining success. They place less emphasis on making money for money’s sake, and more on personal fulfillment, meaning, social conscience, and creating a better future for everyone. And they teach these values and practices to their children and grandchildren, ensuring that these sensibilities continue. Utne, an influence on this movement herself, sees it as paring down to essentials. Bottom line: they’re careful, concerned, informed consumers who know what they want, and why.

You may think you don’t know these folks or their needs, but you do. Their ranks seem to have started in the late 1960s and early ’70s—the heyday of the ecology movement (and the first Earth Day)… organic and “natural” everything from food to fabrics to make-up and soap… and the rise of complementary social and spiritual movements from amnesty to feminism to Zen. Sociologists, trend-watchers, marketing experts and others debate whether LOHAS is a continuation of that era, or something new entirely. Jim Slama, publisher of Conscious Choice magazine, is among those who see the roots of LOHAS in the counter-culture movement. Indeed, one thread that seems to run through this group is that they participated in or were influenced by the social movements of the ’60s: civil rights and feminism, anti-war and anti-nuke, and—at the top of the list—the environment. While California may be at the forefront of LOHAS, these consumers live all over, and many of those social issues are still at the heart of their concerns. According to Ray and Anderson, they’re creative, innovative, and optimistic—and they’re changing the world.

Supplying the demand

Regardless of their true origins, one message emerges: This is a profitable group of consumers that retailers can’t afford to ignore. The growth rate of the market serving this group approaches amazing. While the overall growth rate for US business averaged two to four percent a year, many of the businesses serving LOHAS consumers grew 10 to 20 percent. Natural Business magazine and The Natural Marketing Institute conducted the largest study of the marketplace that supports LOHAS. In it they found the critical, defining element: that there’s a common thread running through the many diverse industries supplying the LOHAS market. That thread is the goods and services that are sustainable, healthful and socially responsible—the ones that LOHAS consumers deliberately seek out and buy, because those products match their values. There are two core production components serving this group, according to the LOHAS Journal: Healthy Living (consumer goods) and Sustainable Economy (energy/transportation and investments). Of interest to most specialty retailers is the Healthy Living component:

  • Natural, organic; nutritional (e.g., personal-care products; foods; supplements)
  • Personal development (e.g., meditation candles; books on spiritual growth)
  • Alternative health care (e.g., herbal products; aromatherapy; wellness books/videos)
  • Sustainable/ecological products (e.g., natural/non-toxic cleaning supplies, chemical-free pest control; recycled materials)

Retailers who don’t address these consumers’ purchasing needs are missing out now, and might never make up for it later. If you offer items produced by child labor in the Third World (or anywhere), for example, LOHAS customers will likely express their unhappiness—if not verbally, then certainly with unopened purse strings—and will avoid your cart or store ever after. But offer recycled goods, natural ingredients, biodegradable products, honorable business practices and a visible sense of social responsibility, and they’re yours.

The growth of LOHAS is also fed, not just served, by the supply side. Many of these “cultural creatives” live up to the monicker by creating and running businesses that focus on more than just the bottom line. These entrepreneurs are “walking the talk”: their companies meet the criteria, and go beyond profit as their sole reason for existence. You already know the names of some of the ones that operate on the LOHAS principles: Ben & Jerry’s, Land’s End, Tom’s of Maine, for example.

imageThe retail side began several decades ago, mainly with mom-and-pop health-food stores. Today, nationwide chains include Trader Joe’s and Wild Oats food markets—with John Mackey’s Whole Foods Market leading the pack. He opened a small health food store about 22 years ago in Austin, Texas. In an interview with the LOHAS Journal, Mackey says that for 20 of those years, people told him natural foods were a fad. Today, that “fad” translates to 117 Whole Foods stores in 20 states and Washington, DC; and this past year, the chain topped $2 billion. Whole Foods is “mission-driven, with a comprehensive values statement, stringent quality standards, and a commitment to the principles of right livelihood, team member empowerment, community service, and support for sustainable agriculture.” The stores are jammed.

Other retail chains with a LOHAS focus include The Body Shop (eco- and body-friendly products) and The Discovery Store. “Discovery Store carries a lot of LOHAS products,” says Steve McIntosh, president of Now & Zen (Boulder, CO). “For example, they sell games, stuffed animals and all sorts of products about the rain forest, [all] designed to teach people about our environment.” McIntosh describes his own company as an online and mail-order retailer “of products that embody the values of personal growth, alternative health care and environmental sustainability.” Product lines include “Affirmation Stations”—alarm clocks that lull you to sleep and wake you with personal affirmations recorded in your own voice; Zen fountains, chimes and tea sets; travel clocks with Zen chimes instead of alarm buzzers; and a host of “spirit tools” and gifts: doormats, mouse pads, videos and games with a spiritual focus. Now & Zen also sells its products wholesale to a variety of retailers McIntosh considers LOHAS-oriented.

The art of the appeal

One of those retailers is Hoypoloi, which Ron Hoy, owner and president, describes as “uncommon galleries of art.” With stores in Disneyland (Anaheim), Downtown Disney (Orlando), and Chicago’s Chinatown district, Hoypoloi’s merchandise includes jewelry, candles, books, garden products, home décor and gifts, many of them objets d’art, and many with a spiritual focus. Hoy says 15 to 20 percent of the merchandise focuses on Zen spirituality. He hadn’t heard of LOHAS per se: “Does Hoypoloi exist as a retailer that specifically targets [that] segment of the buying public? No. But I very much consider that type of customer to be our customer,” he says. For example, he estimates that half his many customers interested in Feng Shui bring their Feng Shui consultant with them to the store.

And he mentions this important point: so-called LOHAS merchandise can be successfully marketed to non-LOHAS customers if the products are presented the right way. “We can take a Buddha, for example, and a [mainstream] customer who’s not necessarily into Eastern philosophy… can appreciate the Buddha for their own reasons, maybe artistic reasons, and buy it.” His stores also carry Judaica—art, jewelry and home décor. “We display [them] in such a way that it’s art. Christians come in and [get] interested in that merchandise, and oftentimes they’ll buy it.”

Being “green”

Beth Hollenbeck, owner of The Eco-Store in Orlando’s College Park neighborhood, appeals to LOHAS customers who have more of an environmental rather than spiritual focus. A self-described “environmentally and socially conscious merchant,” Hollenbeck has operated The Eco-Store for about 10 years. “The store’s basic concept is lifestyle products,” she says. Her lines include minimum-impact, eco-friendly merchandise for home and garden—some 2,500 items including products for cleaning, pest-control, and energy-and water-conservation, plus clothing and gifts made by environment-conscious manufacturers, local artists, and Third World craftspeople.

“We very deliberately research our products, try to remove our support from [manufacturers] whose values don’t reflect our own, and just as deliberately try to redirect that support to newly emerging ‘green’ industries that are having a hard time getting established in the mainstream marketplace.” Hollenbeck cites one example: “Fair-trade, shade-grown, organic coffee bought from a co-op that gives the indigenous people the chance to maintain the integrity of the local ecology—while they’re actually paid good money for their coffee beans. And it doesn’t go through Folgers or Procter & Gamble.” This is directly in line with the LOHAS market’s sensibility, and she says LOHAS customers are “definitely the core consumer” at The Eco-Store. In fact, says Hollenbeck, “our customers are the cream of the crop of LOHAS customers.”

If 50 million LOHAS consumers are spending big bucks, why is it that most retailers don’t know about them? Slama blames the mainstream media. “[They] don’t get it,” he says. “There was a New York Times Magazine article on the organic industry… they know the demographics. [But] they’re still unconvinced people will pay more for value and health benefits.” Ray concurs. “If you form your impressions from the mass media, you’ll never guess [LOHAS consumers] are there.” Most mainstream ads don’t offer clues, either.

According to Ray, other factors contribute to this group’s lack of visibility: one of them is the nature of market surveys themselves. He says surveys collect opinions, which can change, and not values, which evolve slowly and go deep. Another factor: these consumers haven’t named themselves as a group, at least not so far; and the mainstream doesn’t have a uniform name for them, either. But Ray believes they’re at the “tipping point” (a term popularized by Malcolm Gladwell’s book of the same name): a point, seemingly “overnight” sometimes,”when a creative minority can get the leverage to really make a difference,” resulting in social change. Usually that change is the creation of a fad, like the revival of pastel Hush Puppies that Gladwell explains in the book. If a fad grows and migrates into the mainstream, it may mature into a trend. But sometimes the change that’s created is a palpable, lasting shift in values, perceptions and behaviors.

Nonetheless, “retailers are ignoring it,” says Slama. “They’re not offering [LOHAS] products… They think they’re too expensive.” Hollenbeck agrees: “There’s a well-entrenched myth out there that [LOHAS] products cost more, but they do not,” she says. “When the ‘green consumer’ was [first] recognized as a market niche, a lot of phony buzz-word, overpriced items started showing up in health food stores and other stores, exploiting that market niche and definitely reinforcing the perception in the public’s mind that these products come at a premium,” she says. “It just isn’t so. [Consumers] can actually save so much money on the real thing if they’re able to determine what ‘the real thing’ is. A picture of a tree and the words ‘Earth-friendly’ on something mean nothing.”

Getting the business

There’s no question that the LOHAS perspective is moving into the mainstream. Hoy sees it: “There’s more of a [consumer] consciousness now, more people into Feng Shui and things like that… That consciousness has become more mainstream in a natural evolution.” Hollenbeck sees it, too. “People are coming in droves to the organic farmer’s market [in Orlando], which tells me that people now ‘get it,'” she says.

Garner advocates centers where people can gather, because “it’s a boutique mentality. To attract the LOHAS buyer, you have to build a sense of community and get the traffic.” Farmer’s markets fit the bill. And so do companies like Whole Food Markets, which is headed in this direction; and even some mainstream chains are very much there, like Borders Books with its books-music-café-events combination, he says. Walk through any mall and you’ll easily recognize the chains that serve the LOHAS market—The Body Shop and The Discovery Store, as mentioned, plus Store of Knowledge, Nature’s Table and more. Numerous small specialty retailers do, too. And so can you.

The fact is, it doesn’t have to take lots of money or a new identity or a revamped business plan to do it. Start with what you already have and adapt your retail operation to whatever level you’re comfortable with. No need to upset the proverbial apple cart: use some of the ideas below to take aim on the LOHAS target. Start with the first one to get an overview of your position in relation to this market. Then try some of the others that appeal to you, and track your results and observations as you go.

Analyze your current product lines. Note the features of each item or category that appeals to LOHAS customers. Then display those products together to create a stronger LOHAS appeal.

In those displays, provide product information that mentions the environmental, health, spiritual or social-consciousness features of the product or its manufacturer. Use whatever is available: product brochures, ingredients lists, etc. Or create your own: simple, descriptive pamphlets or placards printed on attractive recycled paper or card stock.

Make your inventory-buying decisions with LOHAS in mind. Are there products similar to what you already stock, but with more LOHAS appeal?

Offer environment-friendly products as much as possible—eco-products for the home, recycled paper products, pure fibers for clothing, etc.

Find books, CDs and tapes that have LOHAS appeal and will fit in with your existing lines. Add a selection of them to your mix. Books can include how-to’s (like Feng Shui, alternative health, macrobiotic cooking); philosophy and meditation; poetry and other literature. Other possibilities: how-to videos (like yoga); taped presentations by speakers like Deepak Chopra or Caroline Myss; and music CDs (New Age, world, environmental).

Create a LOHAS “halo effect” for your existing products by displaying them along with your LOHAS-oriented items. Examples: macrobiotic cookbooks with kitchen items, or New Age music CDs with candles and bath-and-body.

Train your staff on your products’ LOHAS features, so they can be knowledgeable when dealing with customers.

Educate your suppliers. For example, information or displays for their LOHAS products don’t capture that slant. Ask if the text can be changed to help you and other retailers zero in on LOHAS consumers—and remind the suppliers that this will benefit them, too.

Start a mailing list of LOHAS customers so you can contact them by postcard, phone or e-mail (their choice) when new merchandise of interest arrives. While you’re at it, make notes on specific products they ask for.

Hold a “Green Day” or “Spirit Day” (or whatever fits) to feature LOHAS products. Display them prominently with info on features and benefits. Have a drawing for one of the items. You’ll add to your customer database and enhance your image at the same time.

Donate a portion of profits and/or get involved in charitable organizations or community activities with a LOHAS focus. Publicize your involvement by sending press releases to local newspapers and TV stations.

Manufacturers and retailers need to be “more creative and aware,” says Slama. Specialty retailers who use their creativity, awareness and business savvy to serve the LOHAS market are likely to benefit not just by increasing their sales, but by helping to promote worthy values.

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