Traditionally, most c-stores tuck away personal care items and toiletries at the back of the shop, or behind the counter, while the star performers of confectionery and magazines take pride of place. But this lack of visibility could mean that retailers are missing out on some healthy profits.
Murray Bisschop, senior deodorants category manager at Unilever, says that 18% of UK shoppers do not even know that health and beauty items are sold at their local convenience store. "There is a real profit opportunity for independent retailers who sell toiletries and health & beauty products. Toiletries shoppers visit their local store more times per week and spend 30% per trip more than the average convenience store customer."
Current bestsellers in the independent sector for Unilever, says Bisschop, include Dove Summer Glow body lotion, Lynx Africa Shower Gel, Vaseline Intensive Care Hand and Nail lotion and Sure 24hr Intensive deodorant.
Competition from the multiples in this category is intense and shoppers who are used to being able to browse supermarket aisles aren't necessarily in the habit of asking for products that may be kept behind the counter.
Sandra Twells, store manager of Jacksons in Calverton, Nottinghamshire, implemented Unilever's Partners for Growth recommendations for toiletries products. It was suggested that they bring the products out from behind the counter and display them on separate fixtures. The results in terms of sales were pretty immediate. "I'd say we're about 15% up overall," she says. "Customers can see the products better and they can find what they want quickly. Shampoos and male toiletries are up in particular as these are much better positioned than before."
Nisaway category controller Yvonne Reid says that the personal care and toiletries category is also growing well for Nisa. The group has recently introduced a 'roll back' strategy that, she says, delivers low prices on an extensive range of personal care lines. And she firmly believes that paying attention to this category has a direct affect on customer spending. "A good toiletries and beauty fixture plays an important part in a consumer's perception of a convenience store. In fact, it has been shown that a good fixture can increase basket spend by about 20%."
But with all the talk of a credit crunch you might think that spending on health and beauty would be down. Yet the latest report from Verdict research says that health and beauty is set to be the UK's fastest growing category this year. Much of the reason is the fact that shoppers are prepared to pay a premium for such products, a trend that has been noted in the multiples and is now filtering down to the independents. Reshmi Ouseph, customer insights executive (Unilever skin team), says the company has seen a year-on-year increase in sales in independent grocers and co-ops. "The average skincare unit price through independent grocers has increased from £2.05 in April 2007 to £2.12 in April 2008," he says.
Spoilt for choice
However, this is a large and complex category where there is a lot of product innovation and it can be difficult for smaller retailers to keep up to speed with what to stock. There are, however, key sub-categories that are well worth keeping an eye on. These include deodorants, oral care and male grooming.
According to Euromonitor, last year the male grooming category saw impressive growth of 7% with total sales of £759bn. Compare this with haircare and bath and shower products, which put on growth of only 1% over the same period.
What's driving this growth isn't just a renewed interest in grooming, but continuous product innovation from the manufacturers. Male shoppers, it seems, buy into these claims as much as women do. This is particularly true of the razors and blades category where unit prices are increasing and sales are still strong - making up about a third of the total male grooming spend. And there's been a lot of activity from the major brands. Procter & Gamble says the Gillette Fusion brand has contributed £30m-worth of growth to this category since its launch in 2006. The company recommends that retailers create distinct 'male zones' to catch the eye of the male shopper who often just wants to get his purchase and go rather than spending time browsing. Retailers should also organise the grooming fixture by category rather than brand making it easier to navigate.
Wilkinson Sword is this year hoping to cash in with its Quattro
3-in-one wet razor, the Quattro Titanium Precision, which has been backed with a £10m marketing investment and a major TV ad campaign. It has also launched Quattro Titanium Disposables at the same time as its Quattro for Women Disposables. "The quality of disposable razors continues to improve and consumers are buying into this. The latest data shows that there has been an 18.2% sales increase in purchases of three-blade disposable razors, indicating a clear trade-up pattern," says category development controller Simon Spicer. He also thinks that convenience store retailers could be missing an opportunity in the category: "The convenience sector is under-developed, so there is huge potential for retailers."
Both Quattro Titanium Disposables and Quattro for Women Disposables come in packs of three, rrp £4.99.
With the summer on its way it's a good time to make the most of seasonal lines such as sun creams, tissues, wipes and deodorants. Value sales of deodorants grew by 7% to £782m in 2007 (Euromonitor). Sprays were the fastest growing in 2007, up 10% to £610m.
Unilever dominates deodorants and increased its share to more than 53% in 2007. It has added several new products to its line-up including the Dove Go Fresh range in three fragrances, a new upside-down format across its roll-on brands including Sure For Women, Dove, Lynx and Sure for Men.
Its best-selling Lynx brand has also seen some major changes. For example, if you believe that chocolate is just confined to confectionery shelves, think again. Lynx has launched Lynx Dark Temptation, which has a chocolate-based fragrance. The reason? Women love chocolate, of course.
Also new to the Lynx stable is Lynx 3. The product comprises
two individual fragrances which create a third scent when they are mixed together.
A missed opportunity
Shoppers often come into convenience stores looking for distress products. But retailers need to be sure they are making the most of such opportunities. According to Bodyform brand manager Julia Kretova, one category that c-stores could make more of is feminine hygiene. At the moment many will stock only a limited range of added-value products but, she says, there are significant opportunities by stocking a range of core products that suit more needs.
"A range covering most usage occasions will drive category sales. If a retailer currently stocks only tampons, there is a further 75% of the total intimate hygiene category value sales for which they are not offering a solution. If space allows they should aim to stock a minimum of an ultra towel, a tampon and a liner. If further space is available, a maxi towel and a bladder weakness product could be added."
The Bodyform range aims to offer good value through pricemarks. Two of the ultra towel packs and the maxi towel packs are pricemarked at £1.19 and the two liner packs are also pricemarked.
Lil-lets senior brand manager Jackie Roberts says that although the tampon market itself is relatively flat, brand and format loyalty is very strong among consumers. "The market is split 70/30 between applicator and non-applicator tampons and users are very loyal to their format. Loyalty to brand is also high, with Lil-lets having 81% loyalty. In fact, Lil-lets users would rather change their shop than their brand. So if Lil-lets aren't stocked, they could easily walk away without making a purchase. Most retailers are unaware of this fierce loyalty and therefore may be missing out on 30% of their tampon sales by not stocking Lil-lets non-applicator tampons as well as their standard applicator brand."
She also points out that this is a purchase that some women may not be comfortable with in a convenience store and this is where discreet packaging can help. "Lil-lets 10s packs are not much bigger than a box of matches and so perform really well in the convenience sector."
Toilet tissues are probably the most commonly purchased item from a c-store's personal care fixture. But even here the market is being fuelled by innovation. Consumers are trading up for more added-value brands as well as for greener products. Andrex marketing manager Carol Smith says that the premium segment of the market is showing very healthy growth.
Andrex has introduced an Andrex Longer Lasting variant to offer consumers a greener option. "We have also just upgraded our mainline Andrex offering, making it softer. This is being communicated by a pack redesign that's in stores until June. It temporarily replaces the Andrex brand logo with "Hello Softie" and features the Puppy playing with feathers to emphasise the softness improvement."
Also new is its first ever kids variant: Andrex Kids moist wipes. Aimed at 4- to 11-year-olds and their mums, Andrex Kids is a lightly moistened, flushable toilet tissue available in 42-sheet tubs and refills.
Oral hygiene continued to grow in value in 2007, up by 7% on the previous year, and manufacturers are coming up with increasingly innovative oral care products. In the toothpaste sector, GSK recently launched Aquafresh Iso-Active foaming gel which is designed to penetrate hard to reach areas, killing 25% more bacteria than a regular toothpaste. It comes in a 100ml pressurised container in shelf-ready packaging, rrp £2.99.
Oral B says that retailers must not underestimate the profit potential available in the manual toothbrush market, which is worth £128.9m and growing at more than 2% year on year. In February it launched Oral-B CrossAction Complete, a multi-benefit brush which claims to remove up to 90% of plaque as well as improving gum health.