How grocery retailers can put their best face forward with health and beauty - SmartBrief

All Articles Food How grocery retailers can put their best face forward with health and beauty

Sponsored

How grocery retailers can put their best face forward with health and beauty

The Health and Beauty Care (HBC) category represents a major opportunity for grocery retailers to increase the amount shoppers spend on each trip, according to a study completed by Acosta and the Food Marketing Institute.

4 min read

Food

Market-Ecommerce-Conad-Supermarket-Expense-2158692

(Image: Max Pixel)

This post is sponsored by Acosta.

The Health and Beauty Care (HBC) category represents a major opportunity for grocery retailers to increase the amount shoppers spend on each trip, according to a study completed by Acosta and the Food Marketing Institute. The HBC category in the US is valued at $89 billion annually in brick-and-mortar retailers, and sales grew 1.5% in 2017 compared with the previous year, the study found. However, the grocery channel is losing out on many HBC sales to drugstores and online retailers.

“The HBC category is complex from a purchasing perspective since most shoppers fulfill their HBC needs at a wide range of retailers and/or channels — including e-commerce, which continues to be a strong competitor for brick-and-mortar retailers,” Senior Research Manager of Acosta’s Center for Shared Business Intelligence (CSBI) Kim Adoerre said.

“While shoppers give a lot of their total spend to grocery, the share of their [general merchandise] and HBC spend in the channel is disproportionately low,” Managing Director and Senior Vice President of Acosta Strategic Advisors John Clevenger said. “Yet at the same time, these shoppers are in grocery stores more than other channels and want to buy these products, so we just need to convert them.”

The grocery channel stands to gain $1 billion in sales by gaining just one share point of the HBC category. Here are some key strategies Acosta recommends for boosting health and beauty sales in grocery.

Compete on price

There are many factors that shoppers consider when deciding which health and beauty items to buy and where to buy them, but price is a top consideration. In fact, 62% of shoppers who don’t buy HBC items at grocery stores said pricing was the key reason, and 91% of shoppers surveyed by Acosta said they agreed to some extent that competitive pricing could encourage purchases.

Grocery retailers can compete with other channels by matching prices with drug stores and online merchants and offering lower prices than other grocery retailers.

Expand assortment, focus on attributes

In addition to pricing, assortment is also a key factor for many HBC shoppers, particularly millennials.

Shoppers value assortment most in the cosmetics, facial skin care, fragrance and hair categories, so retailers would do well to offer a wider selection of those items. Emphasizing product attributes can attract shoppers looking for products with a certain pedigree. More than 70% of shoppers said they view cruelty-free, natural and hypoallergenic attributes to be “somewhat to extremely important.” Paraben-free products are also in demand, with 64% of shoppers identifying that attribute as important.

Drive awareness with promotions

Reminding consumers that their grocery shopping trips can also be an opportunity to stock up on health and beauty items emphasizes the convenience aspect, which is a key factor when deciding where to shop.

“HBC categories are usually contiguous to each other, so the strategy is to turn the department into a destination — through tactics like end caps, easily accessible locations and promotions,” Clevenger said.

Retailers should run promotions often to remain top-of-mind with consumers. Awareness should be the main goal of these campaigns, which shouldn’t necessarily rely on discounting. Regimen-based or thematic promotions can increase awareness and promote the purchase of multiple products.

For example, an oral care endcap could display toothpaste, toothbrushes and floss, while a flu season display could comprise various medicines, cough drops and tissues. A “pamper yourself” promotion with cosmetics and skin care products could spark the interest of shoppers who don’t normally associate the grocery channel with beauty items.

For more insights on boosting HBC sales in the grocery channel, check out Acosta’s full HBC Snapshot.

________________________________________________________________________________________________________________

If you enjoyed this article, sign up for FMI dailyLead to get news like this in your inbox, or check out all of SmartBrief’s food and travel newsletters as we offer more than 30 newsletters covering the food and travel industries from restaurants, food retail and food manufacturing to business travel, the airline and hotel industries and gaming.