Building and maintaining a profitable health and beauty section within a c-store can be tricky. That’s because many retailers face stiff competition from the grocery multiples who are able to offer numerous promotional deals to tempt shoppers.
However, there’s still a large number of people who rely on their local shop when they’ve run out of key items such as shampoo, toothpaste or shaving foam. So it’s important to maximise this opportunity and not let your health and beauty shelves become a neglected section in your store.
The largest sales category within health and beauty is haircare, with a 23% share of the £4.6bn total. It’s obviously essential that c-store retailers stock a decent range of haircare products.
Male toiletries, oral care and personal care products such as shower gels, bath foams and soaps each have a 15% share, closely followed by skincare, (13%) and deodorants, (12%). Feminine care is also a section worth stocking, with a 6% share. (source IRI Nov 2004, Euromonitor, MPB 2005 - P&G report).
It’s clear from the figures that sales are spread fairly evenly across the sub-categories - which is why retailers need to stock a complete range rather than just a few products.
Spar trading controller, Tina Hird, believes a few key merchandising rules can make all the difference between success and failure when it comes to selling toiletries: “It’s vital to offer a full range - it’s not worth selling razors without shaving foam or gel, for example.
“It’s also important to stock the major brands rather than own brand or tertiary-branded goods in order to maximise consumer purchases in sales and profit,” explains Hird. “Retailers should also offer sensible retail prices as regular shoppers will know the usual cost of their favourite toiletries.
“Block merchandising makes shopping the section easier and high value items shouldn’t be hidden behind the counter. Instead, to minimise theft, ensure the toiletry section is in clear view of the checkout. The fixture should always be kept clean, attractive and tidy at all times - they are personal care products after all,” adds Hird
Nisa Today’s trading controller, Nigel Ashton is also adamant that a c-store’s health and beauty section is well worth investing in.
“The health and beauty category is extremely large, consisting of products people need everyday,” says Ashton.
“It is important retailers give it the attention it deserves. One of the key things to remember is to stock the brand leaders. Promotions can work extremely well in c-stores and it is still possible to offer some of the same deals as the major multiples.”
Ashton believes manufacturers are currently putting a great deal of effort into extending their brands but at the same time they’re simplifying products such as shampoos and conditioners.
“Companies are trying to make it easier for customers to find exactly what they want on the shelf, with all the technology and science stripped out,” he says. “That’s been the trend this year - to get back to the basics. This can be seen with the Sunsilk shampoo range, which clearly states what type of hair each product is designed for.”
Sunsilk launched its new Colour Collection in the summer. The range has three variants - deeply brunette, lively blonde and passionately red - and it caters for people with both dyed and natural hair colour. Ashton says the same ‘back to basics’ approach is now true of traditionally-technical brand, Pantene Pro V, which has introduced variant names such as smooth & sleek, repair & protect and radiant colour.
Making products simple to understand is something Ashton believes will continue across major brands into 2006.
“Brands are constantly changing their identity and learning from each other. Retailers need on-shelf vibrancy and that is what is driving the category. It’s definitely worth testing the water on new product design and brand extensions to entice customers to the fixture. If people see something advertised in the media they expect to find it everywhere.”
He also highlights the development of men’s products in recent years, adding: “The male market over the last three or four years has absolutely boomed. Companies are looking for more and more brand recognition with the likes of David Beckham and, more recently, Gavin Henson being used as role models. The market will probably latch onto another sporting hero - maybe one of the Ashes stars such as Kevin Pietersen with his distinctive hairstyle. There is definitely a trend for more men buying a greater range of products as many items are now not viewed as being so girly.”
This view is echoed by Gillette anti-perspirant and deodorant senior business manager Nicola Roode who comments: “The personal care category is going from strength to strength with a change in purchasing habits as people become more health and beauty conscious. Men in particular are increasingly interested in their personal hygiene with male grooming products becoming more innovative and beauty-focused.”
One of this year’s innovations was the introduction of Gillette’s Total Protection vertical spray applicator on Right Guard, Right Guard Xtreme and Gillette Series Cool sprays. The company believes innovations such as these are ‘must-stock’ products, which offer good shelf standout for retailers.
Roode adds: “This trend of innovation means that the men’s deodorant market, in particular, is full of activity with new product variants, new packaging and new spray application methods all competing against each other for shelf space. Brands have to work hard to maintain loyalty.”
Another category which has seen change is oral care. Its largest sub-sector is toothpaste.
Although there is not much opportunity for sales growth through new users, many shoppers are trading up to premium toothpastes that offer extra benefits such as whitening or anti-sensitive agents. While general pastes are relatively static, sales of all-in-one and premium pastes are up 16.9%. (source IRI 2005, GlaxoSmithKline Oral Care Category Report).
Senior business manager at Oral-B Chris Gaskell comments: “Growth in the oral care market is primarily driven by innovative, premium new product design and a change in purchasing habits. Retailers mustn’t underestimate the profit potential of the manual toothbrush market. Consumers remain loyal to the manual toothbrush either out of preference or because they use both power and manual toothbrushes, depending on their circumstances. The need to regularly replace toothbrushes means that this sector offers retailers good potential for repeat purchase.”
So according to the experts, the health and beauty sector seems set for a bright sales future and with a bit of forward planning, c-store retailers can tap into this growth.
Health and beauty products might make up a small percentage of many c-stores’ sales but the value of providing what the customer wants and expects to find when they’ve run out at home, can definitely be worth the extra effort.
The average shopper spends more than £100 a year on toiletries
Toiletries shoppers visit their local convenience store more times per week, spending more than 30% more per trip, than the average c-store customer
Shampoo is the fastest growing area by value within the men’s toiletries market, with year on year growth of 99.9%.
Source: TNS Superpanel 2005, HIM Spring 2005/Unilever
Husband and wife team Priya and Del Patel have managed their Londis store in Kettering for 15 years. A store refit two years ago saw the couple double the shelf space dedicated to health and beauty products; a section which provides them with a monthly turnover of around £2,000.
“We provide quite an extensive range for a c-store and stock a wide selection of shampoos as they are the biggest sellers. Pantene, Alberto, Dove, L’Oréal and VO5 all sell well. Deodorant also does well as it’s the kind of thing people will suddenly run out of. Other popular products which are definitely worth us stocking are shaving products and hair gels.
“We’ve found that customers will often take something else if you do not stock the exact brand they are looking for, as people use us for emergency top-ups and on those occasions might not be so picky.
“We’ve certainly improved our health and beauty offer and the turnover of the whole shop in our time here. We had a refit two years ago and extended the section from one metre to two metres. We’re now able to sell more products and it has definitely improved our profits.
“Over the years we have got to know what sells well. We often put products that aren’t selling that well on promotion. The ‘two-for-one’ deals do well but as soon as they end people look for something else that’s on offer.
“You need to know what you can and can’t sell. For example, it’s not worth us stocking something like hair dye as we would need to include the whole range and there is a limit to the space we have available.
“We display health and beauty products right at the front of the store for security reasons, as the range tends to include some of our more expensive items.
“The average age of our customers is middle to old age and that determines what we stock. We get more women coming in to buy health and beauty products than men. Although women require more choice for that kind of product, they usually find what they want in the range we stock. In an emergency they’re just glad to be able to get something similar to what they usually buy.”
Merchandise it Right
Proper merchandising of a good product range ensures that lost sales from poor ranges and out of stocks are minimised.
30% of any category range will account for 70% of sales. Make sure that 70% of your space is dedicated to the best sellers - too many lines can cause customer confusion
Keep shelves full, and double-face the best-selling lines
Ensure signpost brands are given the most prominent position within the category.
Get all the price and product labels on the fixture under the relevant products
Make sure any special offer cards are up to date.
Source: P&G Brand Power
Dee Patel, runs an independent Budgens store in Clacton, Essex. Situated between a number of large holiday camps and the town centre, his customer profile and their typical purchases can vary dramatically with the seasons.
“Because we’re right next door to a pharmacy we don’t offer an extensive choice of health and beauty products, although we have to carry the basics and the necessities like toothpaste and tampons,” explains Dee.
“We have a space of around six foot in length, with seven shelves. The section includes dental, feminine care, soaps, shower & bath products, deodorants, men’s products, haircare and accessories and baby products. We place the products near the checkouts. This is partly a security issue, as some of the products are quite high value.”
His customer profile is a major factor in what he includes in his range. “Obviously, it’s important to match your range to your local customers and think about their needs. We have a lot of elderly customers here, for example, so it’s important to have products like talcum powder and traditional hairspray brands like Harmony, for the older ladies.
“On the other hand, you have to be clued up on changing trends. Take soap - we’ve noticed a huge switch from bars to liquid soap and shower gels.”
Dee says men are definitely easier customers when it comes to health and beauty. “They don’t require such a wide choice as women, they’re not so brand conscious and they don’t tend to compare prices.
“Because of where we’re situated, health and beauty purchases tend to be of an impulse nature. For a start, we’re next to the pharmacy and, secondly, we’re open very early in the morning and late at night.”
The summer saw Dee add certain seasonal items to his range such as sun lotion and after sun: “We’ve sold masses this summer, and the weather hasn’t even been particularly good.”
Tipple Makes a Ripple
You might be aware of the advantages of a glass of red wine with a meal but how about a drop or two appearing in your health and beauty aisle? Research from Mintel suggests we are likely to see wine appearing in more cosmetic and skincare products as the new natural antioxidant ingredient.
Director of GNPD Consulting, David Jago explains: “The benefits of red wine are already widely understood, but its advantages have been taken one step further and are no longer confined to the wine glass. In recent years there has been a real trend towards using more natural products and even organic ones, not only in food and drink but also in a wide range of cosmetics and toiletries.”