FMI Midwinter
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Wellness may be your best tool to fight deflation

FMI research shows health and beauty can present growth opportunities for retailers.

If you’re looking to combat deflation and set your store up to meet the demands of the future, health and beauty may be your best bet. That was the finding of new research conducted by FMI.

Take the case of Sephora and Ulta, urged Chris Skyers, VP of corporate merchandising for Wakefern, who said customers were looking for a high-end place for beauty products that they couldn’t find elsewhere. “You have to go back to moving with your shopper. Health and beauty has lacked vision of moving with shoppers,” Skyers said at a session during FMI’s Midwinter conference in January.

“Consumers think there is a better value on HBC items outside of grocery, which isn’t true,” said Lisa Paley of Pfizer Consumer Healthcare. “We need to do a better job at marketing that. Talk differently to the shoppers already in your stores.”

Changing the conversation around health and beauty items isn’t necessarily as easy as it sounds, Skyers said. “We’re first a food company, so we aren’t the experts in HB; that’s where the manufacturers come in.”

Skyers suggested retailers tap into manufacturer knowledge to help educate and market health and beauty products correctly to consumers. For example, he looked at research that shows young women drop out of sports when they go through puberty. Skyers said Wakefern is working with Procter & Gamble to help educate young girls on products that can help them during this time.

Another challenge regarding health and beauty is getting consumers to look to traditional grocery stores as their place of purchase. As Gen Z moves older their baskets will decrease and Millennials tend to shop multiple outlets for their needs, decreasing the likelihood of their purchasing health and beauty in grocery. The key is to make supermarkets the go-to place for health and beauty.

One way to ensure this is to make sure staffers working within those aisles are knowledgeable in that area. It seems simple enough, but taking a talented employee from one area of the store and plopping her into health and beauty often results in poor performance.

Skyers said retailers could take advantage of growth in health and beauty sales by employing beauty ambassadors in the aisles to help answer questions for customers.

Another challenge is simply getting shoppers through the health and beauty aisles. “Ninety-five percent of purchase decisions are made on auto pilot — just trying to get the job done,” said Jane Novak-Cool of Procter & Gamble. “In 2011 almost 50% of shoppers went down all or most aisles — by 2015 it was 40%. So how do you disrupt them to get them outside of normal sections so they know you have these items?”

Skyers also urged retailers to think about the health and beauty aisle as an extension of taking care of the community. “We know from a healthcare standpoint these consumers are facing more challenges. There are fewer doctors in community. No one has better opportunity to take care of these shoppers than grocery. We already have what they need to take care of themselves in the food. How do you take the current food portfolio you have and make it a better health portfolio?”

Wakefern is trying to stake its ground in this area by employee 140 dietitians in its stores to help educate customers on healthy diets. “The No. 1 reason for hospital readmittance is poor diet. How can grocery help educate and provide for those consumers?”

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