It's obvious a deodorant is not a can of tomato sauce. But perhaps supermarkets should think about merchandising deodorants like they would cans of tomato sauce or any other food product for that matter, suggests Jim Wisner, president of Wisner Marketing Group, Libertyville, Ill.
The deodorant category, which includes anitperspirants that help block sweating, is a mature personal care category that has seen better growth years. It also is a category heavily merchandised by drug stores to capture front-end sales from pharmacy customers and by mass merchandisers who promote aggressively on price.
“Supermarkets got to stop acting like supermarkets if they want to be serious about the deodorant category,” said Wisner. “Treat deodorants like a food item. Look at promotional frequency, ad frequency and merchandise against that because it is a category heavily couponed by the manufacturers.”
He suggests one way to boost business is to merchandise against coupon drops. “If you are not going to be as aggressive as the drug chains, at least be timely,” Wisner commented.
Deodorant sales, with a mere 0.27% uptick in sales so far this year, remained flat across all mass market channels, excluding Wal-Mart Stores, according to Information Resources Inc., Chicago, and unit sales declined 1.65% in the $1.2 billion volume category for the 52-week period ending Jan. 24, 2010.
Dollar sales and units in both food and drug channels were off for the year. This was perhaps due to the impact of the recession and shoppers cutting back on their discretionary spending across the board, said industry observers.
According to the latest 2008 report on antiperspirants and deodorants, from Mintel International, a leading market research company, sales concentration of deodorants is through alternative retailers such as Wal-Mart and other mass merchants, club stores and others. The alternative channel generates nearly two thirds of category sales, according to Mintel.
“As is the case in most health and beauty categories, Wal-Mart has emerged as a winner in the battle for antiperspirant and deodorant market share. Wal-Mart's powerful combination of low price and broad selection has proved difficult to beat in a category made up of well-known brands,” Mintel stated.
Drug store sales have grown nearly as fast as mass merchants with an 8% increase in 2007.
“The category fits well with strategies that CVS, Walgreens and others have implemented to drive profitable front-of-store sales by capitalizing on foot traffic generated by the pharmacy,” Mintel stated.
Meanwhile, supermarkets are losing share with the category slipping 2.5% in 2007. Mintel conjectures this may be because of a de-emphasis by supermarkets of categories that compete with Wal-Mart.
The category is expected to remain relatively flat due to high penetration it has held for years at 92% to 93% of teens and adults. Mintel places growth at roughly the pace of the population.
“With little opportunity to increase penetration or accelerate the average usage rate beyond the current 8.5 times per week, the category will continue to grow at its current slow pace,” stated Mintel, which forecasts that the category will increase roughly 3.5% per year in current prices for the next five years, and about 1% per year in inflation-adjusted dollars.
With little opportunity to expand the deodorant market, marketers have concentrated on winning greater share of market with continual line extensions and investments in promotion and advertising.
This was never more true than in 2009 when new product launches in the category increased nearly 35% over the previous year to 213 new SKUs, according to Datamonitor's product launch analytics figures.
Tom Vierhile, director of product launch analytics, Datamonitor, Canandaigua, N.Y., detailed new category product trends.
Focus on near-prescription-strength products, including Ban Clinical Defense (Kao Brands), Lady Speed Stick by Mennen Clinical Proof Antiperspirant Deodorant (Colgate-Palmolive) and others.
New products boasting “24-hour” strength, which is another way to say “extra strength” to consumers. Examples include: Right Guard 3-D Sport (Dial), Axe Dry Instinct 24 Hour Invisible Solid Anti-Perspirant & Deodorant (Unilever), Tom's of Maine Natural Care 24 Hour Odor Protection, Nivea for Men Silver Protect 24 Hour Antiperspirant (Beiersdorf) and more.
New products focusing on skin care or enhancing the skin, including Dove Ultimate Visibly Smooth Anti-Perspirant/Deodorant Solid (Unilever) and Secret Flawless Touch with Olay (Procter & Gamble).
Making scent the major point-of-difference. Vierhile said that “Fresh” appears to be a big trend and suggests that antiperspirant and deodorant products can be potential mood lifters and part of an overall aromatherapeutic lifestyle. Examples include: Dove Go Fresh Ultimate Anti-Perspirant Deodorant, Secret Fresh Effects Invisible Solid Anti-Perspirant Deodorant, Secret Scent Expressions Invisible Solid Anti-Perspirant Deodorant Stick.
Products that do not leave residue on clothing. “This is not a new positioning, but recent introductions promise enhancements,” said Vierhile. Examples are: Soft & Dri Pulse Activated Protection No Residue Solid Antiperspirant Deodorant Stick (Dial), Gillette Clear Shield Anti-Perspirant/Deodorant (P&G) and Old Spice Ever Clear (P&G).
Silver-ion-based products. “This may be one of the few relatively new trends in the market. In Asia, we have seen a few products formulated with silver ions (across many product categories) that reportedly inhibit bacterial growth. The trend is beginning to impact what is going on in the U.S. through launches like Degree Men with Silver Ion Technology Deodorant Stick (Unilever) as well as Nivea for Men Silver Protect 24 Hr. Antiperspirant.
The two major suppliers in the category are Procter & Gamble with Secret, Old Spice and Gillette, and Unilever with Degree, Dove and Axe. Together both capture over a 55% share of the market in food, drug and mass market channels, according to Mintel.
“Many other companies and brands compete,” stated Mintel, “but marketplace dynamics favor larger competitors with deeper pockets and broader product portfolios. P&G's and Unilever's category brands are part of much broader HBC portfolios. These negotiate superior shelf presence and display activity, particularly important factors in new product success,” Mintel stated in its report.
Wisner said, “It will be interesting to see where the category shakes out in terms of skew rationalization initiatives. But if you don't promote it like the drug chains or mass merchandisers do, and don't price it like them, you aren't going to succeed.”